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.
Good recommendations! Thanks for these insightful posts!
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