Most of my holdings are in ETFs but I’ve over the past year or so I’ve invested small portions in a few individual companies that I believe will do well, like 1000 each or so. And they have done well- climbing 40-70%. But this material ‘success’ ends up being a few hundred dollars. Whereas if I had invested 10K in that company it would translate to thousands.
And so while I’m happy that I had the conviction to make that good investment, it doesn’t feel impactful. Is there a point to investing small amounts in individual companies? Or if you’re going to invest do you pretty much need to go bigger for there to be any worth to it?
Is there any point to investing in company stock if you’re not going big?
byu/idkwhateveryea instocks
Posted by idkwhateveryea
14 Comments
Don’t forget the same thing can be said for downwards too. If you go big and it drops big you will bite your a$$
1000 is actually low tho. You get more ripped off commissions than actually invest. You need to balance invest a good amount is different based in your total net than going big. A rule of thumb up to 12% of your total portfolio in company stocks. 5k for someone might be 30k for another one, still investing less than 3k is really low until you plan to average down more if it falls
You should be thinking in terms of % of your portfolio, not raw numbers. Depends on your risk profile but maybe allocate 20% of your portfolio to individual picks, and the rest to ETFs.
It comes with more risk. So yeah if you put 10K you’ll make more but you also might lose more.
You should never allocate more than 10% of your portfolio into one single company stock. So it really depends on how much money you already have invested.
Depends on your risk appetite. Would you have been this enthusiastic about adding more to individual stocks if they were in the red currently?
Yeah it’s so that you don’t spend a decade trying to recover from one company shitting the bed. It’s about long term financial security for me, not going to the moon tomorrow. It’s more likely that I’ll end up behind Wendy’s that that I’ll be a billionaire, so I’ll just mitigate that risk.
Let’s say you invest 10k in a company instead of 1k. Then you need to ask yourself if you would be able to sleep well at night if the stock goes down heavy.
I never invest more than 3k (my monthly salary) in a single stock personally. That’s my limit.
If you are going to own 1000 stocks might as well buy an ETF because you are essentially doing the same thing but more work and will probably under perform
Small things can become big.
(At least that’s what I tell my wife)
I bought $1,800 of Tesla in 2010 and it turned in to a half million.
Bought $5k of NVDA at $12. Bought NFLX for almost nothing, sold that way too early after a 10X, was a nice vacation.
Buy individual stocks but do it with relatively small % of your overall portfolio and do it with long term conviction.
If you’re going to invest $500 only because your buddy or a Reddit post said to, then you’ll just churn your portfolio and will have too many mediocre names to follow.
I own 7 stocks. None of them is below 5% of portfolio. If a stock is worth owning, I should be willing to put at least that much into it.
Investing is not gambling. You can invest with small amounts of capital. If you hold large-cap stocks, you should engage in swing trading.
I got scammed with my work buying my options since they said oh we are doing the next valuation so lock in the no valuation that is even by exercising your options before it goes up. 15 years later and $60k out of pocket I am sitting on 300,000 shares of a company stock that the founders are paying themselves huge salaries a million plus so they can retire instead dog selling the company. But they own all the shares they don’t care.