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Stocks at 15% discount..Need advice

F0REIGHN

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I'm 19 & just started working at a new job because i needed a way to fund my projects that will pave the way to the fastlane. i plan to work there for a minimum of two years unless i make a good amount per month from my ideas, then im quitting. but anyways, my work company lets us buy their stock at a 15% discount & i don't know if i should invest. when i went in for an interview (this was in June 2016), the stock was in the low $90s. today (july 2016) it's sitting at about $110. it seems to be growing steadily and i dont know if i should put some money in. i do get a 15% discount.
 
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ZCP

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Check the 'vesting' requirements. You will probably be limited on when you can sell and how long you have to be there, etc.

To answer you question, doe this fit into your investment strategy? Would you even consider this investment w/o the 15% off?
 

F0REIGHN

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Just talked to my mom who has some knowledge in trading. vesting is 100%. my work company doesn't pay dividends. & no i wouldnt consider investing in it if it didnt have the discount, even though the company is doing well. a part of me wants to invest in stocks, a part of me doesnt because of the risks, market is uncontrollable. you never know if it will crash. plus i need the money to work on my projects. thanks for your input. i really appreciate it.
 

biophase

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Just talked to my mom who has some knowledge in trading. vesting is 100%. my work company doesn't pay dividends. & no i wouldnt consider investing in it if it didnt have the discount, even though the company is doing well. a part of me wants to invest in stocks, a part of me doesnt because of the risks, market is uncontrollable. you never know if it will crash. plus i need the money to work on my projects. thanks for your input. i really appreciate it.

How does your mom know that vesting is 100%? Did you give her the paperwork? Find out how long you have to hold before you can sell. Also, is it all purchased at one time at realtime prices, or is your purchase price based on its average price over the past XXX months. Can you purchase at any time, or just a few times a year? Do they take off the top of your salary and purchase it ? Can you purchase it with outside money? Is there a limit to how much you can buy?
 
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ravenspear

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Most likely this is referring to an ESPP. I have one at my work.

IF you can sell the shares immediately upon vesting, and you don't otherwise need the money for expenses or other investments, then it makes sense, it's a guaranteed minimum 15% return over a short term period (it can be considerably more if the stock price goes up). This is how it is at my company.

On the other hand, if you are required to hold the shares for any length of time after they are purchased then it is much more risky since they could go down after you buy them but before you can sell.

You should in most cases not be investing in your company's stock, so only consider it if you can sell right away and treat it as a cash bonus.
 

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