How Beginners Can Buy Individual Stocks



By Kayleigh Kulp

Invest in the familiar. Professional asset managers are equipped with specialized knowledge about specific industries – it’s what they do all day. They also use complex algorithms to make their investments in the stock market and ensure they are buying stocks at a good price. Because you don’t do that, “stick with what you know,” says Daniel Lugasi, portfolio manager with VL Capital Management in Orlando, Florida. “If you are someone that likes to follow the consumer electronics industry, then focus on companies in this sector. You may be able to apply some of the qualitative knowledge that you have picked up to your research process.”

Seek value, not hype. Playing for value rather than for trends or aggressive growth pays off, especially when you sell or buy stocks. Do not go out and buy companies with sky-high price-to-earnings ratios, Lugasi says. “Instead, focus on firms with low P/Es versus their industry average. By being value-focused, you can help to limit your downside in the event of a market correction.”

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