How Many Shares Should You Buy?

The Small Investor

One of the best pieces of advice I ever got in a book came from J.D. Spooner’s Do You Want To Make Money Or Would You Rather Fool Around ?,  Spooner pointed out that a big mistake many people make is not buying enough shares of a stock they like.  They may do great research, pick a great stock, and buy at the right time, but they buy so few shares that what should have been a big winner turns into a nice but modest gain.

For example, they may buy 100 shares of XYZ corporation at $20 per share.  If XYZ does really, really well it might be at $60 within a year.  Our investor picked a great stock – up 200% in a year!  And yet, our investor made $4000.  Not really life changing.

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