IF I INVEST $2000 INTO SEVEN STOCKS THAT DO “WELL,” HOW MUCH MONEY SHOULD I EXPECT TO MAKE IN PROFIT?

When I contend this, I meant each batch does good sufficient to be deliberate the “good” stock.

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{ 5 comments }

MTB February 12, 2011 at 10:33 pm

In one year’s time, approximately $216.50.

ps2754 February 12, 2011 at 11:03 pm

You need to define what “doing well” is. Then you need to remember that all stocks are risky investments. Also, don’t forget that every time you buy or sell a stock, you will be paying commissions that will certainly eat away at your profits.

Larry W February 12, 2011 at 11:36 pm

A “good” stock might be defined as one returning price per share increase of approximately 10 to 11% per year which is close to the long term return of stocks in general. This fluctuates greatly from year to year. So if your seven stocks are “good” and the period you are considering is one year, the “profit” on paper would be about $200. Now you might increase this return if the seven stocks you choose pay dividends. That could add up to approximately $80 more to your profits. Btw, the number of stocks is not significant in this example in that it would be difficult to buy seven “good”, not too risky stocks for $2000. Also, brokerage commissions would eat into your profits. One other consideration is that it would be difficult to diversify your risk adequately when buying individual stocks with this relatively small amount of money. Bottom line is that, in this case, you should consider buying a “good” low-fee, no-load mutual fund. That could return at least as much “profit” while reducing your risk through diversification and reduced fees. Hope this helps you. Good luck!

dredude52 February 13, 2011 at 12:06 am

If you could only realize how silly this question is, you would not try to sound like you know something about investing. Nor would you pose a question with so many unlikely decisions already made.

First, “doing well” is subjective; different for everyone. If you cannot be specific, you just don’t get it. Investing and trading is precise, not general. Like, how much steel should I use in this building, in general?

Second, in all of the plans you’ve made in your life, how often does it work out as planned? Almost never, right? Something’s always a little different than the plan. So, how much money you “expect” to make is irrelevant.

The sad part is, that you “expect” to make money at all, from knowing nothing at all about what you’re doing. It just doesn’t work that way, or am I the one being silly?

Third, you are focusing on profits, exactly the opposite of what you should be focusing on. The number one rule of investing is capital preservation, which means managing risk and losses first, then if you don’t lose it all, profits will come eventually. Warren Buffet’s #1 Rule, “Never lose money.” Making money comes after you learn something. Making sound investment or trading decisions requires more than a click of the mouse. Cheap and easy does not equal successful trading or investing. Nothing substitutes for research and education. It is a burning desire to achieve mastery that produces success, not a burning desire for money.

Fourth, a “good” stock is subjective; different for everyone. What exactly do you mean? “Good” stocks lose money every day.

Fifth, if you invest “$2000 into seven stocks,” either you’re talking about penny stocks, or just a few shares of each one, and just from the initial hit of commissions on seven stocks will put you down by !0% before you ever begin. The $2,000 is barely enough to buy a hundred shares of one “good” stock, let alone seven. If you buy 100 shares of IBM, that will cost you $9,000. Don’t even think about penny stocks, where manipulation is rampant and companies come and go faster than you can keep track of them.

You have quite a bit to learn before you can post a relevant question. Stick it in the bank, and count yourself lucky to have $2,000.

Frank Castle February 13, 2011 at 12:48 am

Asuming you have a margin account and each stock goes up 10% after a year (Twice what you get at the bank) you will have at least $200.00 after a year.

Note:
You have to keep your purchases to a minimum of $700.00 (If you are a Scottrade customer) and this means you can only buy up to 3 stocks with $2,100.00

If you buy less than $700.00 it would be very hard to make money because the $14.00 comissions will eat you alive.

This is a very good deal.

If you want 7 stocks you need to save some money every paycheck and buy the next one when you have saved at least $700.00

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