Rabbit
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First, you don't have to buy in full blocks (100 shares) anymore, unless you are planning on selling options off of them, but that is too advanced for beginners.
Here's a link to a BusinessWeek list that is interesting. I got my start in stocks by trading seasonal stuff like Fedders and Pulte (back when it was cheap and there wasn't much building going on in winter). Some of them seem like pretty good reasons, but do your own checking.
Pool Corp (POOL) is going for about $38.71, so figure on about 10 shares (2000/5=400, -$7, at least that's Scottrade's commission, is $393, so buy 10 shares, $387.10). The company makes a profit and even pays a 42 cent dividend periodically (but you are just trading, right?)
Jarden (JAH) is about $43.18. It recently had a run up, so if you had gotten in at the start of last month you'd already have a profit (on paper, of course). So get about 9 shares of it ($392.62 with commission).
Airlines have been picking up recently, and there's the summer travel, and expensive gas, so consider Southwest Airlines (LUV), going for around $14.66. You could buy about 26 or 27 (counting the rounding from the other trades) shares. (26 is $388.16, with commission).
Folks buy a whale of a lot more soft drinks in summer than they do winter. The folks at BusinessWeek think that Pepsi (PEP) will have the profitability edge over Coke (KO). I'm not so sure, but say we go with Pepsi, at $67.42 (it was about 5 bucks cheaper three weeks ago) you could get about 5 (maybe 6, depending on what you did with the rounding of numbers and if $2k was a firm figure) shares ($344.10).
Finally, Home Depot (HD) is their best bet for the summer house and such fixings work. Like with the soda pop, the obvious alternative is Lowe's (LOW), but I think I'm tracking with BusinessWeek on this one, what with the number one company being beat down on the market and with a new boss, there's good hope for it to regain ground with consumers as well as the market. At $38.92, your budget would allow for about 10 shares ($396.20)
So you would have some fair diversification, some super seasonal prospects, and your choices would cause you zero embarrassment when you told family and friends what you invested in, good companies all. Unless I figured wrong, that is about $1908.18 (your prices won't match these exactly except by weird fluke), so you could (before you punch the buy button) figure an extra share or two somewhere as I mentioned before.
Remember, it is seasonal, so around August or September you might want to be shopping for replacements, okay? |
Carlos R
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A number of companies let you buy their stocks via a DRIP - dividend reinvestment plan. So if you have only $2K, you need to spend conservatively, so a DRIP might be a very good idea for you.
Look at Procter and Gamble (PG). It's a large, global, solid company, in business for many years. Good products; good management.
Beyond consumer discretionary items, I'd also look at financials. Maybe a bank, like Wachovia (WB) or Suntrust. Or a credit card company, like Capital One.
Don't let the price of the stock drive your decision. A $50 stock could be better for you than 10 times as many shares of a $5 stock. It's about value, not price. |
somebody783
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Lots of good advice on this thread! Most brokers today allow you to buy partial shares of stocks. For instance, if I want to put $500 into a stock costing $53.62, the brokerage will purchase 9.325 shares of the stock for me (minus the commission, of course.)
You can't really tell stock's value just from looking at the price. I usually look for a P/E ratio that is under 20 or so.
I agree that ETF's (exchange traded funds) are better for inexperienced investors than stocks because of the instant diversification they give you.
Check out this site: finance.yahoo.com/etf
If really you want to be a stock investor, I have found that a basic level accounting course can open the door for your understanding of how companies work and how to read financial statements. |
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