NYSE (New York Stock Exchange)
Asked on 17 Jun 2020
I have done my due diligence of the company stocks.
When we invest, we buy a portfolio of stocks. An analogy will be like the portfolio is to a garden and the plants are to your stocks.
When a plant is growing well, we keep it.
Meanwhile, those that are no longer bearing fruits, giving you problems or drag the other plants down in the garden (e.g. the pests go to another plant), we chop it down and then plant another one.
Overall, the garden is still lush and flourishing.
If you have a portfolio, even if you sell one bad stock, you can put the money returned from the bad stock into a good one. When more stocks are good, the overall pool of money will still grow.
If one only has 1 stock and its fundamentals have changed, when it goes down... want to cut but can't because all the capital is bet on this one company.
Case in point is when you look at funds, these professional fund managers who do this for a living, don't put everything into 1 stock, even they have confidence in a company.
The world is a fluid place. Unexpected things happen all the time, and you will want to protect your downside as much as possible, while balancing to get the best possible return. Diversification of risk is key.
If you want to see how a portfolio looks like, you can visit Kyith's portfolio at investmentmoats.com.
Better do it with U.S. passive indexing ETFs, single stock investing will not work (better) for the retail investor.
I would assume you are still in school and are looking to invest. Just keep in mind of the following before considering investing:
Setting aside an emergency fund. Would personally recommend 6 months but given current economic climate, may wish to consider 9 months or more. This fund should be able to fund your typical expenses for the set duration of time.
Repayment of tuition loan(if any). If you have taken up a study loan or used your parents' CPF for your tuition fees, you may need to start planning your repayment schedule(e.g X amount per month over X years starting from X)
Ensure adequete insurance coverage. Make sure you are adequetly covered with the key insurance policies such as health insurance, term/whole life as well as critical illneses.
Getting a job/regular income first. The graduating class of 2020 is definitely having a hard time securing a job.The job environment is definitely a tough one for fresh graduates this year. If you're a fresh grad, you may want to take more conservative approach to spending/investing and prioritse getting a job first.
17 Jun 2020
17 Jun 2020
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