I indicated earlier how I started making investments in individual companies. That process started after I had money saved in different vehicles, including an employer-sponsored retirement plan as well as invested in Mutual funds, while periodically looking into CDs and Bonds. It seemed ideal for me to add investing in individual companies to my arsenal. This meant using money from the savings account labeled ‘Investing’ as demonstrated earlier. This is money that I would have no need for in the near term, so it can be used to take risks. I discovered that it doesn’t take as much money as many people think to start investing in individual companies.
Having exposed myself to an array of ideas and methods related to investing, I learned that the best way is to keep things simple and go slowly while choosing what makes sense to me. There is so much information available on the subject that it can very easy to become frozen by indecision or intimidation. Nowadays, there are many more resources to find information on the companies one wants to invest in, and a decent place to start is Yahoo Finance. It is wise to start with the companies whose products we use as well as those that intrigue us.
To be able to buy shares in a company, I had to select a stock broker and initially I used the same one I signed up with to invest in mutual funds. That broker provided a number of services such as guidance when I needed it, but as would be expected, the commissions for transactions were hefty back then and is still relatively costly today. I then realized that I do not need all of those services, so I started looking around for less costly alternatives. Fortunately for today’s investors, there are now a number of options to bypass paying commissions for individual stocks.
As I said before, I believe that everyone should be involved in investing to some extent. Investing commission-free allows the investor to slowly and methodically establish positions in the companies of their choice without blowing up their initial cost by repeatedly paying commissions. As a matter of fact, the commission-free approach makes it practical to establish a position in a company by buying as little as 1 share at a time. This helps the skeptical investor be able to get his feet wet slowly and cautiously. There are now a number of brokerage institutions offering commission-free investing, and this is very good for investors. I will mention one of my favorite commission-free brokers in part 2. (I have to remind myself to keep these short)