Which Is Better: Owning 10,000 Shares at $1 Each Or Owning 100 Shares at $100 Each?
You can own one share at $10,000 for the exact same prize. Chances are that smaller priced shares will fluctuate more and many even drop out of the market with a complete loss. When choosing what company shares to purchase my best advice is when you find a product or service that impresses you, find more background details such as owners, subsiduaries and stock listings. If you are pleased with something, chances are that others will be as well and popularity will encourage growth. Shares should be looked at as a medium to long term investment and the stock listing price is a medium for guide purposes. Example :- if a share is listed at $1.00 and you want to buy some, the stock broker fee's will cost you around $1.03 AND if you own the shares and wish to sell at the $1.00 price you will probably get around $0.97 per share. There are many good stock broker companies and a little research into the financial newspapers or main search engines should help.
I would also suggest not putting all your cash into the same sector and try to cover four or five different areas.
Wishing You the Very Best of Luck.
Well in theory it is the same thing either way obviously as your shares have the same immediate value.
However, I think what you are getting at is the question:
"If you have very little money to invest in stock, is it better to buy small cap penny stocks for more volume, or large cap stocks for more security"?
The answer is just that simple. Neither option is better or worse, but it depends on your long term, short terms goals, and tolerance levels.
The penny stocks, typically will have much more risk, because if a stock is that cheap there is obviously a reason. Either the company is a new company that could go bankrupt, or it is an existing company fallen on hard times for it's company. Either way your risk is typically thought to be much higher on penny stocks. Although all those so called "SAFE" mutual funds that FA's hyped for years are now worth squat so who knows.
The large cap stocks, are typically thought to be more stable, more secure for the long term. However that doesn't mean that a $100 share can't turn into a $200 share just as easily as a $1 goes into a $2.
The important thing to remember is your not focusing on the dollar amounts, or share amounts. YOU ARE FOCUSING ON THE % ROI, or your CAP RATE.
If you can consistently make at least 10% annual ROI you will be doing fine. In my opinion however, ditch the stocks, and let's buy some real estate=)
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