Late last week I reopened one of my trading accounts and started putting money into stocks again.
You always need to remember to buy enough shares to make it worth your money.
For example if it costs $7 to buy and $7 to sell (as it does on Scottrade), you need to make $14 on your shares before you start to actually make money.
So if you buy penny stocks, you’d need to buy thousands of shares to make enough of a move to earn that money back.
A good example is Apple. If you buy only a single share, at $120, you need it to go up to $134 before you begin making money.
On the flip side, if you buy 9 shares (costing you $1,080 before trading fees), the shares only have to go up to $121.50 (or so) before you start to make money.
Yes, you obviously have to have more money to throw into it, but you have potential to make a lot more money, not just because of the more shares, but also because you make up your loses a lot faster.
The flip side of course is if the stock goes down…you have the $14 lost + whatever the difference in the shares are.
I know that I go in multiple times a day to see how my shares are moving, and it drives me crazy.
And being that I am promoting buying multiple shares of things, I only own a few different companies at this time, since $ plays a key factor in buying more!