Last I did some research Google shares cost $569.74 a share for non-voting members. There was a time they cost $1000 so it's a significant drop or maybe the $1K price tag was for members who had voting rights [ I don't know]. Google sure does make huge profits consistently but supposing you had only $10K or less to invest would buying a few shares in Google or any other company whose stock is pretty expensive be worth it? Would you get good returns on your investment or would your money make more if you invested it elsewhere?
I follow a 5% rule - I generally put no more than 5% of my money into any one stock - often less. But if a really good company I really like gets up to a little higher % of my portfolio through growth of the stock, it's no biggie. I do like google, and it remains relatively cheap with very good earnings and is a very well run company. One share for someone with $10k - who understands the risks associated with buying individual stocks, is willing to take at least a little investment risk and shortterm risk of fluctuation, who isn't planning on necessarily selling the share anytime soon, and who doesn't see needing that $ any time soon - wouldn't be excessive concentration IMO.
That 5% rule seems pretty good JR, very wise. It's a more specific version of "don't put all your eggs in the same basket". I completely agree, buying a single stock would be very risky, even considering you won't need the money any time soon.
I like the 5% rule, thanks for the tip. I do not have the funds available at the moment to spend more than about $100 on any one stock, but I would be nervous anyway to invest a great deal into one egg basket. The stock market is still very uncertain and the economy does not seem to be improving very much and so I would be afraid of losing money. At least with a smaller stock, you would not be losing as much money.
It is all risky business, you could spend alot of money on buying stocks and end up loosing or gaining, so just take the risk ,since it is not guaranteed.
Thanks JT Ewing for the 5% rule. I will definitely follow it the next time I invest. Right now, I'm pretty tight on budget.
