Personal Finance in Your 20s & 30s For Dummies by Eric Tyson

Author:Eric Tyson [Tyson, Eric]
Language: eng
Format: epub
ISBN: 9781119805458
Publisher: Wiley
Published: 2021-05-11T00:00:00+00:00

Investing in individual stocks

Who wouldn’t want to own shares in the next hot stock? Few things are more financially satisfying than investing in a stock like Apple or Amazon that multiplies your money many, many times over the years.

But investing in individual stocks entails numerous pitfalls:

You may fool yourself (or let others fool you) into thinking that picking and following individual companies and their stocks is simple and requires little time.

When you’re considering the purchase of an individual security, you should spend a significant amount of time doing research. You need to know a lot about the company in which you’re thinking about investing. Relevant questions to ask about the company include: What products and services does it sell? What are its prospects for future growth and profitability? What companies are likely to provide the strongest competition in coming years and how will that affect this particular company you’re considering? How much debt does it have? You need to do your homework not only before you make your initial investment but also on an ongoing basis for as long as you hold the investment. Research takes your valuable free time and sometimes costs money.

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