So walk me through this: The stock price of a company is the

Say you buy one share of stock at $10. It goes up a dollar, so it's worth $11. If you sell it at that price then you made a 10% profit (minus taxes and fees, but we're ignoring that for the example.)
Doesn't seem like a lot of money does it? That's true, it's not. But 10% of a larger sum can be a lot.
What if you owned 1000 shares and the price went up a dollar? Well, that's a 1000 dollar profit if you were to sell at $11 per share. Now we're getting somewhere.
But what if you owned 100,000 shares and the price goes up by a dollar? For you that's a $100,000 increase. That's an annual middle class income and you got it for doing almost nothing. Crazy, huh?

>>1686491

you remind me a lot of some guy I know. I was explaining how I was going to be buying and leasing a very small apartment, but would get a decent return on investment. His thinking is "why would you spend $80k to just make $4-500 after tax?? its barely anything..."

if you expect to just triple your money in 1 month, go into a casino and do it that way. You forget all the many months you sit around and do nothing, your money could be earning for you, with little actual effort on your part.

you just sound like youre impatient

>>1686494
You need a lot of money to throw around. If you have $100000, then you can look at $100 shares. If you have $10000, look at $10 shares. If you have $1000, look at penny stocks.

t. experience. I've made good calls with stocks -- bought Tesla at $200, sold at $250 -- bought a truckload of stocks after the mini-crash in January, but I'm buying stocks I can't afford, per se. EG I bought 4 stocks of Tesla at $200. Held em for a year and sold at $250. So $800 became $1000. Minus $10 in commissions is a tidy $190 profit, but that was a very good call and $190 for that % rise is very modest. I just don't have a ton of cash to play with, so I should've never looked at Tesla.

I'm doing modest research into $10 stocks as well as penny stocks now.

>>1686491

when you invest in a company, that company is doing things with your money, growing their company, and growing your investment.
If you left your money in a savings account instead, the value of your holdings would be eaten up slowly by inflation.

>So why invest when the profit you gain is so meagre?
what else are you going to do with your money?

>>1686827
>If you have $100000, then you can look at $100 shares. If you have $10000, look at $10 shares. If you have $1000, look at penny stocks.
Terrible logic.
Those stocks are not equal to each other in any way, shape , or form. Why would you allow your amount of capital to dictate the kinds of companies you buy stock in? Or buy shitty unlisted crap stocks because you "only have $1000".
This is a sure way to go broke in the market.

>>1686852
Any stock is going to be a high risk investment. If you're going broke, it's because you're an idiot.

You can only play stocks if
1. You have no outstanding debt
2. You are good and well on your monthly bills, etc.
3. You have anywhere from 3-6 months salary emergency reserve of cash
4. Your retirement funds are maxed out (preferably in index funds)

So yeah, I've only got $1000-$2000 left after accomodating for all that.

>>1686864
>4. Your retirement funds are maxed out (preferably in index funds)

if you're young then taking bigger risks can be worthwhile. a successful gamble will give you a bigger base to start saving for the long term, and assuming your career is on an upward trajectory, the money you're making now probably wont mean much to you in a few years even if you lose.

>>1686864
What does any of your post have to do with buying shitty penny stocks if you have under a $1000?
By your own "rules", you shouldn't be buying stocks at all if you have that little.

>>1686864

>any stock is going to be a high risk investment

there are highly varying levels of "risk" in the marketplace. Buying a company like Apple does not expose you to the same level of overall risk that buying a junior miner, or some OTC penny stock will get you.

>>1686491
Historic long term average stock index returns are about 10% per year. This won't make you rich in a single year but can compound to make you wealthy over the course of a lifetime.

Legitimate enterprise has surprisingly meager returns. Absurd levels of profit attract competition. If you expect to make 100% per year, go deal drugs.

>>1686866
>a successful gamble will give you a bigger base to start saving for the long term
I don't buy this line of thinking. Small mistakes early can set you back far when you consider the future value of your funds. Say you lost $1,000 on a gamble at age 25 instead of investing in index funds. 40 years later compounded at 9%, that $1,000 would be worth $31,409

>>1686895

Good luck getting 9% returns without risk in your portfolio

>>1686827

This is some advance stupidity.
You made 25% profit. Now the absolute return you get depends on the absolute number you invest, but your % profit is exactly the same. Doesn't matter if 100$ stock, 10$ stocka or penny stocks

Do people even know basics maths and finance in here

>>1687118
No. That's why they sit here.

File: 1479419087134.gif (2MB, 230x230px) Image search: [Google]

2MB, 230x230px

>>1686827
>I don't understand how units of stock are priced: the post

>>1687014
You can throw all of your money in bonds for just a %5 return, the fuck are you on about?

I found this guide on a site I browse (not reddit). Does this look like a good way to make money?

"You should set up a 2nd Grade Portfolio. If you're an info junkie just google it and you'll find a ton of stuff. Alternatively you could buy this book (i did):

[ame="http://www.amazon.com/Second-Grader-Beats-Wall-Street/dp/0470375949/?tag=obliviousinvest or-20"]Amazon.com: How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn (9780470375945): Allan S. Roth: Books@@AMEPARAM@@htt p://ecx.images-amazon.com/images/I/51aCXR3stmL.@@AMEPAR AM@@51aCXR3stmL[/ame]

Here is the asset allocation:

60% Vanguard Total Stock Market ETF (VTI)
30% Vanguard Total International Stock ETF (VXUS)
10% Vanguard Total Bond Market ETF (BND)

You might be thinking "what? Huh?" It is way simpler than it looks.


Ok here goes:

1. Set up a sharebuilder account.
2. Put your $500 in your sharebuilder account.
3. Go to BUY.
4. Search for the first asset- VTI. That is the abbreviation for Vanguard Total Stock Market ETF.
5. Buy VTI at 60% of your total investment. What? Ok look- 500*.6= 300. Right now its selling for 64.25 so with the 300 you have you can buy FIVE shares.
6. Buy VXUS at 30% of your total investment. What? Ok look- 500 * .3= 150. right now its selling for 43.5 so with the 150 you have you can buy THREE shares.
7. Buy BND at 10% of your total investment.

That's it! You now have a fully diversified investment portfolio.

Here is the thing- whenever you want to put more money into your portfolio just buy at those set percentages. If I was you I would try my best to buy in every three months. It's a good habit to start and years down the road, YES this is something you can and should keep for YEARS, you will be very very happy you did."

>>1687422
do it on robinhood to avoid fees.

>>1687467
1/10 bait

>>1687477
why not robinhood?

>>1687485
Do you know anything about robinhood?

>>1687486
Not really, I barely know anything about investing

>>1687490
There's a whole thread about them here.
They'll tell you all about it.

>>1687477
if you are only going to put in $500 you may aswell go with robinhood to get started. Commission will eat up a portfolio that size so quick even if you are investing for years you are still paying commission
kys

>>1687497
>if you are only going to put in $500
bait harder

>>1686864

do you seriously believe the PRICE of a stock is an indicator to the level of risk it carries? seriously?

I...just picture you filtering stocks by price and saying `well this one costs $10 more than this one, therefore the cheaper one is a better choice for me`....all without looking at any of the technical details or trends

you should just give me your money because you clearly arent educated enough to handle it by yourself

>>1687502
Wait just a minute there.
Are you saying that you DON'T need to make your money in penny stocks before you can buy $5 ones?
And that you don't need to make more with those before buying $20 ones?
Because if that's true, I have been misled by the fine gentlemen on this board.

>>1686864
he fell for the mr money moustache meme

>paying off debt w/ lower % than index

>>1686491
>For most companies, the price only floats above $10 on a good week.
Dude wut. The actual dollar price does not matter, all that matters is how many shares you own.

>why invest for such meager profits
Keep in mind that you potential loss is "meager" too. Whereas if you started your own business with your money you could loss your entire life savings just like that. The likelyhood of all the S&P 500 companies going brankrupt is so incredibly small by comparison.

And it should be obvious, but any profit, no matter how microscopic, is still greater than zero. 0.00001 > 0. So it is an obvious decision, if I gave you a choice between $10,000 and $10,002, would you any sane person on the planet actively choose the smaller amount just because $2 isn't that much? Everything remaining equal, you would choose $10,002 every single time.

To answer your question, Yes, the stock market IS a long term game, not a short term game. That time is going to pass anyway, no matter what you do. It doesn't need to be a short term game because nobody invests their life savings just to make a year of money and then proceed to spend their entire net worth. Are you really going to spend all your money in such a short amount of time? Chances are you will always have savings throughout your long term, 70 year life. We don't need no stinkin' short term gains, at the end of that short term you are still going to own that equity so it makes no sense to sell it all off, it makes much more sense to keep it going. What else are you going to do, live the next 50 years of your life with inflation destroying your life's work?

>>1686499
>0.06% return
That dude was right, why the fuck would you spend 80k to make 500, you would be better off buying a fucking bond. You would have more much more reward and much less risk.

>>1687422
Seriously dude, lipstick alley .com?

Fucking lipstick alley .com?

>not understanding the very basics of the stock market/investing/math in general

stock price doesn't matter, market cap matters, dollar amount doesn't matter, percentages matter

Sad thread

>>1687534

wait what? Im talking about a p.a return on the initial investment. 6000/p.a. after deductions is a good return on 80k...I have no mortgage to pay on it and no loan repayments.

and also at the end of the day I will still own the apartment which should at least hold its value or increase.

you sound exactly like him, thinking in the immediate short term. think about the yearly ROI. 7.5% is pretty solid for minimal stress on my side.

>>1686871
>yes goy please pump my stock, holding most if your savings in US equities definitely isn't risky enough already

>>1687544
yeah wtf is this shit thread

I have a stupid question.

When you buy a share, you aren't buying from the company, you're typically buying from someone else who bought the stock. Therefore the money you paid for the stock doesn't go to the company...

How does the company benefit if a load of people suddenly invest if the capital isn't going to the company, but to investors?

Why does the stock price actually matter if it doesn't relate to company profits, only the profits of shareholders?

>>1687541
I'm a black female that browses lsa and 4chan. I was reading up their version of biz, what's the big deal? They are probably more informed than this place.

>>1688059
Because companies can issue more stock or buyback their own stock to benefit from fluctuations in their stock price.

>>1686491
Instead of looking at the stock price, look at the market cap. Stock price depends on the amount of issued shares and market cap, so the stock price can artificially look high or low. When looking at market cap, you get an authentic number that describes the value of the company.
As to your point about "meager profits", it's all about perspective. Say you had $1,000,000 and you made only 10% return on your stocks. That's $100k of you not putting any real labor in, if you enjoy investing.

>>1688059
When the share was originally bought (pre-IPO), it was purchased from the company. They got the money then, and it really doesn't matter how many times it's exchanged after that.

>>1687557
I thought you were saying $500 a year. That makes a lot more sense, kek.