How Much Do You Invest?

A question that people often ask is "How much should you invest in a particular stock?" My short answer is a lot.

During a lunchtime conversation with a co-worker, he announced that he was buying 100 shares in company that makes jeans that happen to be popular with his daughter and her friends. In my mind, that is not investing; that is what some people call "playing in the stock market". And I would never do that. True stock investing requires far more fundamental research.

When deciding on how much to invest, you should push yourself to the edge of your comfort zone. The actual dollar amount depends on how big your portfolio is, and how much trading experience you have. What is comfortable for one person might be a stretch for others. But, by pushing toward the end of their comfort zone, investors are forcing themselves to more thoroughly consider their investment.

PFS

Disclaimer: This material is for general information only. It is not intended as an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any security or fund.