I generally don't even think about the current price of a stock in any context than what is the price v. what I believe it is worth, or will be worth in the future. There generally is no fee for trading in odd lots anymore. In one of our IRA's we own two...that's right...two shares of GOOG.
Stocks that trade for less than $3.00 - $5.00/share are generally not where I want to be invested for the long term, but I might occasionally do a swing trade or day trade with stocks in this price range.
Don't forget about dividends. Sometimes it's nice to have capital parked in stocks that historically don't appreciate much in value, but pay a dividend.
The energy sector can be volatile, but if you believe a global economic recovery is imminent, or occurring, Exxon Mobil might be worth investigating further. With global demand for energy all but certain to increase as Americans keep buying products and services from developing markets, energy costs are likely to rise in the future, and companies that produce and refine are in a good position to benefit from this increased demand. XOM currently pays about a 2.4% dividend which is much higher than you're going to earn at most banks at present...plus you're in a position to profit the next time gasoline prices spike. Probably not worthwhile if you think you might need your capital for another purpose within a few months, but if it's money you don't need to meet emergencies, this is a strategy that is worth exploring further.
Dividends are also taxed at capital gains tax rates...currently 15% maximum. If one is single and earning more than $34,000 annually, dividends can be a way to earn money and pay a lower tax rate than you would if you worked overtime or got a raise.
If one earns less than $34,000 annually, the tax savings from generating dividend income or long term capital gains are still there. Here's an opportunity for a potential windfall for investors in lower tax brackets.
Online brokerages have removed a huge hurdle for average people. It used to be to buy and sell stock, one had to pay a commission of $100 or so per trade. $100 to buy...$100 to sell. This was back when $100 was worth something. That meant that one had to have substantial capital invested in any one company in order to earn enough to cover transaction costs. These transaction costs effectively limited stock ownership to the upper middle class and wealthy.
These days, this limitation is gone, and in a way the opportunity for people to participate in the stock market and benefit from owning assets has expanded to just about anyone who chooses to.
Again, research and education is key. I am dumfounded that people work 40 hours per week or more to earn money, but invest less than thirty minutes per week when deciding how to allocate the capital they've earned.
