Stock Market

Schneed10 · 12-20-2006, 09:31 AM

Unless you're uber rich and can afford to own shares of tons of companies on your own, investing directly in stocks is a fool's errand in my opinion. Experts tell you that you should never have any more than 5% of your money invested in any single company. The exposure to risk is too great - all it takes is for that one stock to tank and you're effin screwed.

Mutual funds allow you to buy shares in a "portfolio of companies." You can put $3000 in a S&P 500 mutual fund, and you will effectively own a small piece of all those companies.

If you wanted to try to buy stock in each of those 500 companies, you'd need millions (not really, but you get the idea). You can't just put say $100 in a single stock, there are investment minimums - usually in the $1000 - $3000 range per stock.

12-20-2006, 09:31 AM	#10
Schneed10 A Dude Join Date: Feb 2005 Location: Newtown Square, PA Age: 46 Posts: 12,458	Re: Stock Market Unless you're uber rich and can afford to own shares of tons of companies on your own, investing directly in stocks is a fool's errand in my opinion. Experts tell you that you should never have any more than 5% of your money invested in any single company. The exposure to risk is too great - all it takes is for that one stock to tank and you're effin screwed. Mutual funds allow you to buy shares in a "portfolio of companies." You can put $3000 in a S&P 500 mutual fund, and you will effectively own a small piece of all those companies. If you wanted to try to buy stock in each of those 500 companies, you'd need millions (not really, but you get the idea). You can't just put say $100 in a single stock, there are investment minimums - usually in the $1000 - $3000 range per stock. __________________ God made certain people to play football. He was one of them.

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