Financial Freedom: First Stock
My last article on stocks generated lot of interest in the readers, so I am doing this follow up article to talk a little more about, what you should look in your first stock. But before we get into that I want to clear one basic principle about investing and why its so important.
Why Invest?
I live in US and here inflation is close to 3%. So if a pair of sneakers cost 100$ today, they will cost 103$ next year and if I don't invest my money this year, I won't be able to afford same things next year. This the bases of all investment. Your investment should not only grow your money, it should grow it more than the inflation. In developing countries, inflation is usually around 15% per yr. which is a lot. With this basic understanding, we will move on to how to invest your first 1000$.
Your First Stock
It is absolutely essential that you make money on the first stock that you buy. Its a physiological thing. If you lose money on your first buy, you will probably not return to the stock market for year. For this, you should buy a very safe stock. A moderate dividend stock. Something that can beat the inflation and keep your money safe. You won't make lot of money on these stocks but you will not likely lose either.
Here are 2 examples of such stocks. They have low dividend but they have never lost money to investors. I know how the crypto space feels about Visa and MasterCard. But I am an investor and I have no feelings, only maths. Stick to the numbers when making a investment choice and it will do you good.
I hope you find this information useful and get into stocks.
Disclaimer : Only invest what you are comfortable to lose. This is true for any investment. This post is my personal opinion, do your own research before making any investment decisions. If you make any trades after reading this post, it is completely your responsibility. I am just a guy with an opinion like everyone else on the internet.
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If I remember correctly last year visa was trading around $99. This is a stock that I have watched somewhat closely. So we can possibly make gains on the shares moving up in value as well.
Also mastercard did a stock split about two years ago. These are solid stock picks.
What is the annual dividend payout on visa and mastercard?
Its around .5% but their growth is good too.