Investing in a growth stock periodically
I have identified a stock after doing some research and planning to follow the below investment plan for my investments in the stock:
Buy a stock at per share with the 00 I have - I am hoping the
stocks would reach 0 in the next 2-3 Years
Wait to see the performance and when it is up by 5-10% - invest another 00.
Continue this until I reach my target of 0 (and maybe continue
doing this afterwards)
It is based on the following assumptionshopefactors
The stock keeps on giving good returns
I do not have the capacity to invest a lump sum amount initially
I also wouldn't want to risk putting all the money at once
Note: I would have a stop loss plan at every step of investment
Is this something normal to do? Can you suggest any better alternative? I am just planning to enter the stock market and any guidance would be really helpful!
(1)1 Comments
Sorted by latest first Latest Oldest Best
I would encourage you to read The Warren Buffett Way. Its a short read and available from most libraries as an audio book. It should address most of the ignorance that your post displays.
Short term prices, offered in the market, do not necessarily reflect the future value of a company. In the short term the market is a popularity contest, in the long run prices increases based on the performance of the company. How much free cash flow (and related metrics) does the company generate. You seem way overly concerned with short term price fluctuations and as such you are more speculating.
Expecting a 10 bagger in 2-3 years is unrealistic. Has it happened, sure, but it is a rare thing. Most would be happy to have a 2 bagger in that time frame.
If I was in your shoes I'd buy the stock, and watch it. Provided management meet my expectations and made good business decisions I would hold it and add to my position as I was able and the market was willing to sell me the company at a good price.
It is good to look at index funds as a diversification.
Assuming everything goes perfectly, in 2-3 years, you would have an extra 1K dollars. Big deal. How much money could you earn during that time period? Simply by working at a fairly humble job you should be able to earn between 60K and 90K during that time. If you stuck 10% of that income into a savings account you would be far better off (6K to 9K) then if this stock actually does double. Hopefully that gets you thinking.
Staring out is about earning and saving/investing. Start building funds that can compound. Very early on, the rate of return (provided it is not negative) is very unimportant. The key is to get money to compound!
Terms of Use Privacy policy Contact About Cancellation policy © freshhoot.com2025 All Rights reserved.