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Chapter 7. Equity Investments: Taking St... > Considerations for Buying Individual...

Considerations for Buying Individual Stocks

I won't mince words here. I think that you need to be very careful when investing in individual stocks. As investing relates to goal-oriented financial planning, you simply cannot match a single investment in a company stock to a goal. You won't meet the diversification test required to minimize the risk associated with that goal. You can, however, pick and manage a small group of individual stocks if doing so can get you motivated about saving and investing. But take care to keep the number of stocks small. Even professional money managers have strict limits on the number of companies they will invest in at any given time.

More Information

There are a number of sources that you can use to get financial information on companies. One of the oldest sources is Value Line, which you can find at www.valueline.com. It offers a number of tools to help you understand the financials on over 1,700 publicly traded companies.



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