Number of Shares to buy

[bdelgaud]

When starting a position in a stock, what is a good number of shares or amount of a stock to buy? Best way to avoid high costs. Looking to buy a few stocks and hold them for years.

[disneysteve]

That is an unanswerable question.

It all depends on how much you have to invest and the share price of the stock you are buying. I've bought as few as 3 shares and as many as a couple hundred.

[bdelgaud]

Cant Say i have alot to invest at the moment. Going to save up before actually buying.

For examples sake: if there was a stock that had a stock price of 50.00 or 100.00. What would be an adequate amount of shares to buy? I plan on holding these for a long time so wont be trading often at all

[KTP]

Cant Say i have alot to invest at the moment. Going to save up before actually buying.

For examples sake: if there was a stock that had a stock price of 50.00 or 100.00. What would be an adequate amount of shares to buy? I plan on holding these for a long time so wont be trading often at all

Spend less than 1% of the purchase price in commissions. If you don't have much money, open an account at OptionsHouse and get 100 free trades (but you only get 60 days I think to use them).

Thus for a $100 stock with $4 commissions, you want to buy at least 4 shares at a time in my opinion.

[disneysteve]

Spend less than 1% of the purchase price in commissions. If you don't have much money, open an account at OptionsHouse and get 100 free trades (but you only get 60 days I think to use them).

Thus for a $100 stock with $4 commissions, you want to buy at least 4 shares at a time in my opinion.

I agree that you need to base your decision on the commission. I know I got a certain number of free trades when I opened my Scottrade account (it wasn't 100 but I didn't need that many so it was fine).

The point is that if your commission represents a significant percentage of your investment, it cuts into your return. If you have to pay $4 to buy and another $4 to sell, the stock's value needs to rise enough to cover that, taxes, and still leave you a nice profit.

[bdelgaud]

thanks guys!

[KenJackson]

I've been advised to not invest more than 1% to 2% of my total portfolio value in any one stock. But it's OK to go higher on ETFs and mutual funds, because they already spread the risk across a number of stocks.

If you can meet that limit and still invest in 100 shares, it's convenient to invest in multiples of 100 shares so you can sell call options on them. That way, you not only get the increasing value of the stock, but you can collect premium cash from some other investor who wants a guarantee. True, if you sell a call and the stock does really well, you'll end up having to sell it at the strike price, but you still get some profit and you've been paid too take that risk.

[disneysteve]

I've been advised to not invest more than 1% to 2% of my total portfolio value in any one stock.

I think that's probably overly conservative. The number I've always heard was 5-10%. Definitely stay on the lower end if it is your company stock since you don't want both your income and your investments overly dependent on the same company. This is what wiped out a lot of Enron employees as well as IBM employees years ago.

[Dale09]

When starting a position in a stock, what is a good number of shares or amount of a stock to buy? Best way to avoid high costs. Looking to buy a few stocks and hold them for years.

Its depends on the size of the investment and value of shares you want to purchase. If the stock price is overstated than you should avoid to purchase that stock.