Friday, March 28, 2008

My first "Buy" order.

Last night I put in my first order to buy a stock. Well it's not really a stock I guess, but a Exchange Trading Fund which trades like a stock. Since I wasn't real comfortable making my first purchase through a broker, I asked for help.

After a thirty minute chat session with a broker from, I decided to go for it and put in a buy order for the Diamond Trust (DIA) ETF. If you're wondering what the heck DIA is, it's simply an index fund that follows the thirty firms in the Down Jones Industrial Average (Dow).

Now you're probably questioning why I did this as given my age, buying individual stocks or funds outside of my 401K or Roth IRA makes little sense. However, I decided to purchase DIA because I had some extra cash laying around in a money market and wanted a bit more excitement, yet wanted the flexibility to get the money out if I really needed it.

I also wanted something that could pay me a dividend as some extra income. Now given the small amount I bought, the dividend checks won't pay for a vacation to Hawaii, but they will help pay my summer golf fees, which tend to get a bit high.

Lastly, I wanted something that was more diversified than a single stock or small section of stock. To be honest, I almost bought GE just a few days ago. It pays a nice dividend and I think it's a bit low (as everything is right now). After I learned more about DIA though, being diversified across the Dow made more sense to me.

As of this writing the Dow is down 86 points. Which, with my luck, is about what I expected. But I'm actually an advocate for stocks right now (i.e. buy low, sell high) so I'm not worried about it.

In closing, you can now get up to minute stock prices by observing my temperament. A smile means the Dow is up. A frown means my kids are going to public school.


David said...

Since I wasn't real comfortable making my first purchase through a broker, I asked for help.

I am interested...what weren't you comfortable about? You put in a ticker symbol and a price - then click "Place Order."

Maybe this is a generational thing? :)

Mac Noland said...

For "Order Type", I didn’t understand the difference between: Market Order, Limit Order, Stop Loss, Stop Limit, Trailing Stop Loss $, Trailing Stop Loss %, Trailing Stop Limit $, Trailing Stop Limit %.

For "Time in Force" I wanted to verify my undrstanding of: Day, Good 'til Kill, Fill or Kill, Immediate or Cancel, On the Open, On the Close.

For "Condition" I wanted to verify my understanding of: All Or none, Do not reduce, All or None/Do Not reduce.