If I Wasn't Ignorant About Stock, I'd Buy Some Right Now!

Stock prices are in the toilet. The market keeps flushing that toilet though, as prices continue to drop.

But if you wanted to get in, now is the time!

Remember me talking about J. Crew killing me with discount e-mails? Well, I happen to shop at that overpriced retailer often, waiting for sales and using the rare coupons or discounts I might get my hands on.

So guess how hard I slapped my head after reading the news that J. Crew's stock went up 10% and the retail site crashed after word got out that the First Daughters, Malia and Sasha Obama, wore specially-made J. Crew clothes to their father's inauguration.

I thought about how I was joking with my friends about Michelle's yellow-green outfit (which I thought she looked great in) saying "Is that from J. Crew too?" If you don't remember, she wore a J. Crew twinset when she was on Jay Leno during the campaign. I thought, jokingly, I should buy stock in J. Crew then.

Um, yeah.

But that's the trouble with buying individual stocks on a whim -- if you don't really know what you're doing, it's a gamble. You might have better odds at the Black Jack table.
And retailers aren't the place to park a lot of cash right now. There's a bunch of popular ones that may not make it through 2009.

Still, it begs the question, why shouldn't I do some research and pick some stocks to buy now while they are dirt cheap? Let's say I was willing to work with $1,000. If I had bought J. Crew stock at its 52-week low of $8.02, I would have gotten about 124 shares for that money. At market close on Thursday, the stock prices was $9.99. So those shares would have been worth $1,238.76. Just like that, I would have made more than $200.
Ok, that's not much money, but think how little effort it would have taken to make it.

I think it may be worth the effort to do some reading and research. Do any of you dabble in buying individual stocks? What do you read? How do you pick?

I know most of your are more concerned with paying off your debt -- as you rightly should be -- but I'm thinking this recession and market tanking is leaving lots of opportunities... why shouldn't us little people get in on it?

Just some food for thought...

DH

Comments

[Nicole]

It's a little scary, but in my opinion this is the time to be pouring money into the stock market (if you have extra money available and a VERY long-term investing horizon). What's the worst that could happen? The whole stock market collapses? I think our whole nation would be in anarchy and we'd have a lot bigger worries than money if that happened! An interesting, related article:
http://www.marketwatch.com/news/story/cheaper-stock-prices-give-new/story.aspx?guid=3D27E0CA-C4F3-485C-B09D-43EC58176AE0&siteid=e2eyahoo

I was burned on an individual stock purchase, so I'm strictly an index fund investor now. I don't have the time or interest to learn about individual stocks.

[savvy]

I use index funds for most of my investing but I do have a small amount of 'play money' that I use for individual stocks. The average person doesn't have the necessary knowledge (i.e. do the necessary research) so it's advised that no more than 10% of your portfolio be individual stocks.

[Night Runner]

I do lots (and I meant *lots*) of research when I invest, always read the latest news about those companies, and try to avoid trading on impulse (bad market day, etc.). I started investing last year, and my portfolio went up by 112% (yes, 112). There's no magic and no arcane secrets to it - I believe everyone can do as well as I did...