Date a Stock Before You Marry It 107

On March 13, 1997 Microsoft stock went public for $21 a share.  Today, thirty-four years later the stock has made many investors wealthy.  Below is a sample list of similar stories.  You can find and use an online total return calculator to see what $1000 invested at the IPO would be worth today.  Try and guess which company’s stock below would be worth the most today if you started with $1000 initial investment before you do your research.

Big Time Stocks

StockIPO DateIPO Price Per ShareYears Since IPO

My point here is that when you have interest in a corporation’s stock that you want to invest in you have plenty of time to investigate it and watch it before you take ownership.  As with marriage, take some time to date the company you are interested in and want to purchase before you buy it.  Get to know it’s business, its leadership, its current internal debt position and plans, watch it’s valuation, read as much about it as you can find, see where there’s support of buyers when the stock retreats. 

The bottom line is you want to purchase the ownership position within the company at a discount or a fair price.  You can only do this when you completely understand it, and that takes time.  Reacting rather than planning won’t allow you to do this especially if you are checking the price everyday.  The price fluctuations will trigger emotional responses, and you’ll frustrate yourself by either buying too high or jumping in and out.


dating stock

Set yourself up with a dating plan and a list of items over a specific timeline that you want to answer before you take ownership.  If the company you are investigating is a long term winner then giving yourself time before you find the right purchase price won’t be much of a risk.  Big winners take years to develop and six or twelve months won’t matter too much from a long term ownership perspective. 

Remember it is always a lot easier emotionally to maintain ownership of a stock that you have a profit in than a stock that you have a loss in and are waiting for it to get profitable.  Only patience can accomplish this.  It’s not much different than buying any other large purchase such as a house.  Those who do their homework and remain patient usually get the best deals.

After you’ve dated read our Over 50 Smart Posts.