As I was going through my stuff, I found a list of rule for buying stocks. I assume I wrote them while watching Jim Cramer.
- Never buy on margin.
- Never use market orders.
- Know what you own.
- Do not own too many low-priced stocks.
- Be diversified.
- Own dividend stocks.
I have bought with market orders. I plan on owning stocks/ETFs for a long time, so I don’t think that paying a bit more is that big of a deal. Plus, many times when I put in limit orders, they sit unfilled for weeks, so I just bite the bullet and buy. So far it has worked out.
Big Jim knows the way to succeed in the stock market is to have a plan.
“Regret” (1887) by Miguel Navarro Cañizares (c. 1835 – 23 October 1913), image from Wikimedia, assumed allowed under Fair Use.
One Reply to “Stock Buying Rules”
Sounds like solid rules to me. Limit orders are a nice way to control impulses. Wanting to own a stock at any price is different than wanting to own a stock at your right price. Market orders do have their place.
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