thinking of byuing stock in Amazon.com- good or bad idea?

[Snydley]

DH and I are looking to continue to build our wealth and are considering buying 10K in stock in Amazon. We are paying ahead on our mortgage (less than 8 years left) and will max our retirement accounts this year. We have no other debt (remaining car loan will be paid off in August).

Right now we have 10K in the bank that we could stand to lose. I think the plan would be to buy the stock and leave it, with the idea that the funds could be used towards DD's college in 8 years if needed.

What do you think? Is Amazon I good choice right now? Is there a better way use the 10K? I'm not looking at a 529 on the off chance she attends the college where I work and receives 90% off tuition (could happen).

[Jluke]

go for it...

You'll get 10 shares or so.

If the stock price falls by $100, you're out 1000; $200 you're out 2000...

If it goes up... well then the math is similar but on the positive side.

[msomnipotent]

As a general rule, I never buy stocks that are at or near their 5 year high. And I'm certainly not an expert, but I feel that it is too late to buy just for the Whole Foods bump. I think this WFM thing is going to take a while to flesh out and there will be some volatility, which might bring about a buying opportunity. If you are going to buy, buy on a dip.

Of course, it also depends on why you are buying and how long you plan on keeping it. It could be a $2,000 stock in a few years, or $50. If you really want to have the money in 8 years, there are other stocks that could have more upside. Oil stocks are beaten down now, but who knows in 8 years (plus you get dividends while you wait). I'm gambling on BIOC. It has been a dog, but I see a lot of potential years from now and I'm willing to wait. Plus, it is cheap enough that I can buy a lot of shares with a small amount of money. I can either get richer or lose a few grand. I limit myself to stocks under $5 with my "gambling" stock money.

[YLTL_Dan]

I was just discussing AMZN with my investment banker friend and here's his exact quote:

"Amazon's net income is 1% of sales and they bought a suffering grocery store and they both go up, but other retailers which don't have the growth of Amazon are more profitable and they go down 5-10%".

He thinks we're getting very bubbly in some of these growth stocks and they're pulling back to value stocks. AMZN could run another 50%, who knows, but if you really look at their numbers, not great.