It never fails.

Anytime a new investor wants to get started investing, they always want to buy stock.


Doesn’t matter that they’ve never invested before.

Doesn’t matter that they have no idea what makes a good stock.

They just know that guys like Warren Buffet made a killing by buying stocks and they want to, too.

Even worse is when they want to buy a penny stock. >>>PLEASE<<<< don't do that. If you think you're ready to buy some stock, watch this video first.


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Comments | 2 Responses

  1. SimpleRyan says

    Great advice Jeff!
    More people DEFINITELY need to hear this. I have many friends who do exactly what you mentioned. They buy a stock because their aunt or uncle or lawyer told them it’s a good company to own….they made 40% over the last few months…and they tell them to get in now as the price is just going to keep on going up.

    Sadly enough – they listen. Get burned. And like a person having a bad experience with one car manufacturer – they write off the entire stock market and say “all stocks are bad. They’re risky! Don’t invest because I lost all my money in this one stock”

    People need to use more common sense when it comes to investing. The same way you wouldn’t jump into the deep end if you don’t know how to swim is the same way you shouldn’t jump right into stocks if you don’t know how to invest.

    Everyone wants to hit the home run without going through batting practice. It just doesn’t work that way in life or with investing.

    Do your research. Become familiar. Review the company’s Income Statement & Balance sheet. If you want the truth. It’s all in the numbers right there for you. With that information, you’ll be well equipped to make an informed decision.

  2. says

    Absolutely true, Jeff.

    In fact, most people don’t know enough to pick out good mutual funds or know whether they should be invested in their company 301k, let alone individual stocks. Think of all those people at Enron!

    Buying individual stock (and often mutual funds other than the general index funds) is at best partially speculative. It is safer to keep your basic investing in a solid Roth IRA and look at any other investing as a fun game with extra money.

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