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Anonymous
Hypothetical Question 2017-02-07 10:57:12 Post No. 1782810
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Hypothetical Question 2017-02-07 10:57:12 Post No. 1782810
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I'm trying to understand this shit..
Let's say I have $1000 to invest.
What would be the best way to optimize returns by choosing either Stock A($200/share) or Stock B($30/share), or a combination of the two?
The numbers are just pulled out of my head. Would it be wiser to buy the lower priced stock since you can own more of it?
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>>1782810
Stock A you'll have less but it's worth more
this is a kg of feathers.
just take your profit.
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>>1782810
a good first investment would be buying a book and reading it
doesn't matter which book. Just read any book.
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>>1782836
got me there
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warren buffet said something along the lines of 'buy value and hold forever".
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>>1782810
$/share does not matter. 5 shares of Stock A or 33.3 shares of Stock B are both $1,000 investments. Put $500 in each if you want to be equally diversified between the two or just buy the one you think will perform better.
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>>1782810
Buy a options contract instead, costs a bit more but you have a chance at getting better returns than just a couple dollars
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>>1782877
What this guy said.
Or better yet, diversify into more than 2 stocks, please.
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>>1782810
Buy ETFs
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>>1782810
price of the stock is irrelevant, the company behind the stock is.
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>>1782877
>$/share does not matter
Stop giving advice
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>>1783816
in what case would it matter?
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>>1783816
It doesn't matter. Companies can control the number of shares outstanding, which directly controls the stock price. Amazon is trading around $800/share now. The board could decide do a ten-for-one stock split tomorrow and your one $800 share turns into ten $80 shares. You still have an $800 investment in the company, your percentage ownership interest didn't change and the market cap of the company didn't change (aside from any normal market fluctuations unrelated to the split). Price per share doesn't matter.
>>1783850
I'd guess this is true for penny stocks (trading at <$1 per share) and maybe for stocks trading under $5 per share, but I'd guess once you get to above $10 or so, the correlation between price per share and volatility goes away. So in OP's example ($30 share vs $200 share), I don't think this correlation would really be a factor.
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