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It’s so hard to decide

It’s so hard to decide

I buy a few shares of stock each month, because that’s all I can afford. Since I have so little to invest in them, it means I have to basically pick one stock to buy each month out of my list, sometimes two. And it’s so hard to decide!

I think the problem might be that I spend the time prior to the purchase narrowing down my choices to 3 or 4 that I’d most like to get that month. Then when I’m about ready to buy, I begin looking at those stocks more closely. Usually I can decide on a stock pretty quickly at that point. But seriously, for the last few months, every time I pick a stock it jumps up in value right before I have the money available to buy it!

Argh.

It’s very annoying, but oh well. Since I want to wait until I have the money before buying, that’s pretty much how it has to be. It’s funny though how much easier it is to make my choice prior to the money’s arrival. Once I finally get the money, and the old favorite has jumped, I sit and debate with myself about what to buy.

I try to decide if the price jump was probably a reaction to some bit of news (this month I think it was) and whether it’s likely to go back down a little more later. In other words, I try to decide whether I should put that purchase off another month and buy one of my other choices instead, or buy the original choice now anyway.

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This time I decided to put it off, based on potentially upcoming “bad” news further down the road, but often I buy it anyway. In those cases, I figure that I wanted it, had reasonable reasons for wanting it, and it’s still very low compared to a year ago. Why quibble now, if I don’t have a reason for thinking it will drop again in the relatively near future?

It’s just hard to know. It reminds me of buying plane tickets. Will this be the cheapest fare? Can I get a better deal later? Is it the kind of flight and service I want? Only time will tell. The bad part though is that once I buy a plane ticket, I quit looking at their prices. For stocks, I kinda have to keep on looking at the prices. It’d be silly not to.

View Comments (2)
  • Eventually it comes down to making a decision and sticking with it. You can always second guess your decision but if your decision making criteria is sound then it shouldn’t matter very much.

    I am curious how do you narrow down your stock picks? do you use company and stock information for this?

    Do you invest in index funds at all?

  • Matt, narrowing them down is based initially on which ones I still need more of out of my list (I want to have about an equal amount of all of them) and then on which ones I think are down the most for irrational reasons. No idea if that’s a good method to use or not, but time will tell.

    I don’t invest much in index funds, mostly single stocks and a few mutual funds.

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