Asked 2w ago
How does long term stocks works? if I'm looking to buy and hold it for long term (30 years), from time to time, if share prices drop below buy-in price, do I need to have extra cash to withstand it? Does it work like day trading? Will it start to deduct money from my accounts if the shares fall below buy-in prices? Or is it a 1-time buy-in thing? If I were to buy 50K worth of Amazon shares, I will lose 50K at most if the stock crashes? How does one lose money, buying long term and holding it?
To add on to the other answers, there is a minimum commission paid to the brokerage when you buy and sell, so it is often not worth it to just buy/sell 1 share.
In addition, brokerages actually hold your foreign shares on your behalf so they will also charge a monthly custodian fee (couple of dollars).
The minimum you can buy is 1 stock for U.S exchanges. Buying stocks is the same all around the world, you don’t have to have extra money to cover losses, as there will be no “Margin Call” if you buy with 50k in cash. Also I’m going to assume that the 50k is in USD, with that at the current amazon stock price of USD 1784.92, you can only buy 28 shares which is 1784.92 x 28 = USD 49,977.76 (excluding fees), so you will have some money leftover as stocks can only be bought in whole numbers. Also you can only lose the exact amount you have invested unless you buy the shares on margin, which is basically buying shares on borrowed money. Also if you hold it for long term, it will depend on how the stock performs, if the share price goes up, you can make a profit, vice versa. Hope this makes it clearer.