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Old 01-01-2008, 10:52 AM   #14
QuikSand
lolzcat
 
Join Date: Oct 2000
Location: Annapolis, Md
If your total amount of investment is something like $1,000, then you really aren't well suited to get into individual equities. Buying and selling stocks involves some level of transaction charge - even if you do all the homework yourself (which is not that difficult to do) you're going to pay in the neighborhood of $10 every time you buy or sell. If you split your $1,000 into, say, five stocks, you'd be paying at least $10 every time you buy or sell $200 worth of stock, and the transaction costs become at that point really too high to bear. If you chose to follow the advice above and go with a full-service broker, you may find yourself paying $30 or $40 a trade, and they will (1) have you as just about their lowest-priority client due to your portfolio amount, and (2) have a permanent incentive to keep you trading, rather than making one or two wise purchases and holding them.

It's your call what you want to do. For lots of people, the wisest investment for the long term is mutual funds, or even ETFs as mentioned above. If what you want is to engage in the challenge of picking equities and "playing the market" then you won't get any of that sort of reward by this sort of "hand it over" strategy. You need to make the call with what you want to do... realizing that there are some practical impediments to some options just as a function of transaction costs.

Last edited by QuikSand : 01-01-2008 at 10:53 AM.
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