Buying Your1st Stock

You Have the Money What Now?

Now you have the funds saved up to buy your first stock.  I did not tell you your goal last post, but your goal should be 5 to 10 thousand dollars. 

Your account is set up with the right to sell calls and puts.

You are not sure what to buy, but would like to get started, but don’t have lots of spare time to do your investing right now.  Buy a boring stock.

Yes something that does almost nothing, doesn’t go up doesn’t go down much.  Just sits there and watching it would be like watching paint dry or grass grow.

You may be wondering why?  Your fist goal should be to make money but not lose much if any!  Not jump on the next hot stock and ride it up.  I have learned the hard way what shoots straight up, with time will go out of favor and shoot straight down too.  You will be like a deer in the headlights and freeze.  Trust me!  Ask the people who had Enron. 

The first things I purchased and made money on were boring.  I bought a food stock Kraft (KFT), a toy company Mattel Inc. (MAT), and a store Kmart (no longer traded).  Not growth stocks.  Made good money on all three. 

So for you I would recommend a boring food stock.  I would recommend one, only one you need to stay diversified, of these 4.  Kraft (KFT), HJ Heinz Co. (HNZ), General Mills (GIS) or Kellogg (K).  Of the 4 Heinz is the most safe and boring.  It stays between $50 and $55.  Kraft and Kellogg will need you to watch a more and have some things good and bad happening.  General Mills trends a bit to the upside very slowly (at least for now). 

Now the way to do it is to buy 100 shares of the stock and sell a covered call for a higher strike price about it.  You will need to be set up with your broker to do this and get your brokers help to code it into the screen as you do it.  Make 4 sure you set it up as reinvest dividends. 

Food companies are good because you have to eat right?  Recession, Depression or Boom you are buying food.  These 4 seem safe, and they all have a high again seeming safe dividend.  

Coming in later posts is a way to make money if the stock stays in a range, automatically buy more if it goes down or automatically sell it if it goes up. 

Also a recommendation on a second boring stock in a different industry so you are diversified if all food stock drop for some reason like commodity costs going up.  We can address growth stocks at a later date.