# How Many Shares of Stock Should I Buy?

outstanding stock represents shares of stock that This is a topic that many people are looking for. star-trek-voyager.net is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, star-trek-voyager.net would like to introduce to you How Many Shares of Stock Should I Buy?. Following along are instructions in the video below:

“Lewis so you ve done your research nand. You have a stock that you want want to buy. But now you don t know how many shares of nthat stock should buy i m dylan lewis from the motley fool in this faq. We re going nto break down how to decide the right number of shares to buy nthere are a couple of factors to consider when trying to determine position size or nthe number of shares of stock that you ll buy one of the best places to start is figuring nout how many shares you can buy meaning.

How many shares you can actually afford if you nalready have a dollar amount in mind that you want to put towards a stock determining nhow. Many shares you can buy is pretty simple look up the current price of one share. Using nthe stock s ticker divide the dollar amount you wish to invest by the current share price nand. If your broker allows you to buy fractional shares.

Only a few do this is how many nshares you can actually afford if you can t buy fractional shares round. The result of nthe calculation down to the nearest whole number for example let s say i want to invest in walmart. Nand i have 1000. In cash in my brokerage account we ll assume that i cannot buy fractional shares.

A quick google search shows. Me that nas of taping walmart is trading for just under 120 per share dividing. 1000 by 120 ngives me a result of 833 rounding that down tells me that i can buy neight shares of the stock now for some nuance. Say you don t have a nlot of money on hand can you buy just one share of a stock.

Absolutely and actually nit has become far more practical to do so than it used to be now that most major brokers nhave done away with trading commissions. It s feasible for you to start investing with very nlittle money 50..

Even 100. If you use one of the few brokers that are still charging ncommissions the cost of trading should be taken into consideration when deciding if nit s practical to buy a certain number of shares for example. Let s say you want to invest in general electric s stock. Which currently ntrades for around 11 as of november 2019 if your broker charges.

A 7 trading commission. Nand. You buy 10 shares with buying and later selling you re probably paying about 11 nin transaction costs in the form of commissions now. If you buy 100 shares this drops to n1 in other words.

The more shares. You buy the less of an impact commissions will have non the other hand. If your broker doesn t charge commissions go ahead and buy as few nor as many shares of stock. As you want if your broker.

Does charge commissions. You may nwant to consider switching to a broker that does not charge for transactions nastute viewers may have thought about the remainder from our walmart example. And thought n. Have started to allow customers to buy fractional nshares of a stock.

Schwab is one example of a major broker that allows investors to buy nstocks on a fractional basis. And there are several newer brokers that are also allowing nfor this it may seem silly to buy a quarter of a stock..

But it s a huge benefit for investors nfor a few reasons first investors who don t have enough money to buy a full share of stock ncan still invest if they can buy just a fraction of a share for example. If you only have n 500 to invest and want to buy amazon s. Stock which as of taping is about 1700. You re nout of luck.

Shares of amazon stock right away instead nof having to save up for the full 1700. Second investors who buy more than one share ncan put all their money to work in our. Walmart example i would be able to buy. 833 shares with my 1000.

Nif my broker allowed for fractional share investing there are a couple other considerations to keep in mind. When you re deciding how many nshares of stock to buy namely. Diversification diversification is probably one of the most ntalked about entry level. Investing topics and that s because it s incredibly important nand can save newbies from catastrophe.

We generally advise folks to work to a portfolio nwith at least 10 to 15 stocks in it the reason for that is you don t want to have your success ndecided by one or two companies. If you own two stocks in equal amounts and one of them ngoes down by 50 your whole portfolio will go down by 25 ..

But if you own 10 stocks nin equal amounts and one of them gets cut in half your portfolio will only drop 5. . Ndiversification is particularly important for new investors. Because just like being nnew to anything as an investing rookie you re going to make mistakes.

And it s helpful to nhave some guardrails in place to keep those mistakes. Small now how does nthat play into deciding how many shares to buy well say you have 1000. Nto invest. It s often better to buy several stocks in small amounts upfront.

Say 250 nworth of four different companies and then buy more of each over time rather than simply nbuying 1000. Of one stock right away doing things that way will give you some diversification nin terms of what you own and it ll set you up to diversify within each stock over time nthere s a concept in investing called cost basis. And if the average cost you paid for nthe thing that you own buying the same stock in several spaced out purchases. Allows you nto avoid having your costs tied to one moment in time you might be thinking.

But my stock is going to go up in the future nwhy would i want to buy more later. When it will be more expensive apple now. If you bought your shares in nlate. September of 2018.

You bought shares nin january. Of 2019 you. d be up over 75 . So you know i m not just cherry picking one ndata point buying apple in early may of 2019 would have you up about 25.

But if you bought nthe stock later in the same month. You d be up 50. Now the point is that even wildly nsuccessful businesses experience setbacks along the way as an investor. It s nice to nbe able to view those as chances to buy more rather than scary events that crush your portfolio nbuying in small chunks over time allows you to do just that and with commissions going naway.

It s never been easier or cheaper to do it i personally do this with every stock ni buy knowing that if i continue to think that it s a good company. I ll likely buy nit again three or four more times in the future. There s no one size fits all answer to this nquestion. But to sum it up investors should consider how much money you have available nto invest commissions you ll have to pay if any and the diversification of your portfolio nboth in what you own and when you buy it if you keep those things in mind nyou.

ll be doing just fine thanks for watching this video viewers. We nwant to know what stocks you re interested in drop them down in the comments section nbelow. If you enjoyed the video please give us a like and subscribe to the channel nit sounds crazy. But those little things help ” .

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