Disclaimer: I am not a financial expert by any means, so if you choose to invest in this single stock, I wish you luck. Invest at your own risk!
If this had been three months ago today, and I went with my gut instinct to buy US Steel Stock (X) while the stock market was bottoming out, you would be reading a different article. Three months ago, US Steel was trading at $20 per share, down from nearly $180 in early 2008. That’s a $160 drop from its peak! I spoke with a co-worker of mine, and we both decided that we should buy some of this stock. Our decision was based on China’s continual need for steel (after the global economy heals itself), as well as the fact that even if the shares only went back to a new ‘normal’ price of $40, then we would double our money.
So I thought about this for several days, wrote it down on my to-do list, and let it sit for awhile. What was the reason? Quite simply, I have never bought one single stock before, and I did not know how to sell some of my mutual fund stock and then invest it into a single stock using my brokerage firm (Fidelity). In fact, the entire process seemed overly complex and fuzzy to me everytime I thought about it. And so my to-do list stayed where it was, earning me no money at all.
Finally, I brushed the dust off of the list, and called a Fidelity representative last week. He walked me through how to sell off part of my mutual fund, then how to reinvest it, and the tax consequences from any gains/losses that I had from the fund. Presto! I could do the entire transaction over the course of two business days, and finally cross it off of my list.
I typed “X” into Google; lo and behold, US Steel is now trading for $40.25 per share (as of 6/10/2009). With what I had wanted to invest three months ago, I lost a total of $1,000 because I did not know how to properly use my accounts, nor did I pick up the phone to find out.
I am writing this to hopefully motivate some of you, my readers, to better learn how to use the tools in your various financial accounts in order to take advantage of good deals when you see them. It is very easy to just pick up a phone and talk to a representative of your financial institution and pick their brains about how to do all of those things that you’ve been meaning to ask, but have just not gotten around to.
As for me, I still bought my US Steel because I feel that it has quite a lot of room for growth over the next few years. Hopefully I will still see my money double, although I know the economy will have to turn around a lot more before I see my returns than if I had bought at $20 per share.