Building Wealth
© 2007, Marketing Education Resource Center®
One of the challenges in maintaining your Start Now portfolio is finding the money to buy new stock. Just like in real life, funds are limited! You know the $100,00 you spent when you set up your portfolio? That’s all you get. If your stocks happen to increase in value over time, you can trade with that additional capital, but if your stocks decrease over time, you’re left with that much less.
Le t’s say you’ve just discovered a company whose stock you want to buy. If you don’t have any more money to spend, where do you get it? You’ll have to sell some stock you already own.
We’ll use Google (GOOG) and Starbucks (SBUX) as examples. You own 150 shares of GOOG, which is now trading at $424.14
—nice! You want to buy $12,500 worth of SBUX. How much GOOG do you have to sell in order to raise $12,500?
Dollars needed / share price of stock to be sold = # of shares to sell
$12,500 / $424.14 = 29.47
Selling 29.47 shares of GOOG will give you the $12,500 you need. It used to be that only whole shares of stock could be traded, but now, thanks to computers, fractional shares are common. Also, in Yahoo!
Finance, stock is sold by number of shares, not by dollar amount. If you want to buy or sell $12,500 worth of stock, you have to figure out how many shares that is, even if the answer is a fraction.
So, how many shares of SBUX should you buy? Find out the current price (let’s say $30.75) and do a similar calculation:
Dollars available / share price of stock to be bought = # of shares to buy
$12,500 / $30.75 = 406.5
With this information, you can go to your virtual portfolio, sell 29.47 shares of GOOG, and buy 406.5 shares of SBUX. The overall value of your portfolio does not change. The transaction record in Yahoo!
Finance would look like this:
Notice the amount column —getting within a dollar of your targeted amount is one of the rules for making trades in the Start Now portfolio. Remember —your goal is to sell enough of one or more stocks to buy the other stock you want.
Use the worksheet on the following page to help you calculate your own transactions.

Step 1: How much capital do you need?
Step 2: How many shares of stock are you selling?
Step 3: How many shares of stock are you buying?
A spreadsheet
Can Help
First, figure out how much, in dollars, of another stock you want to buy. Your decision should be based on how much of your portfolio you want this stock to represent. For example, if you have 8 stocks and you want to allocate $100,000 evenly, aim to buy approximately $12,500 worth of stock ($100,000 / 8 = $12,500).
If you want to spread your $100,000 evenly among 10 stocks, you would aim to buy approximately $10,000 ($100,000 / 10 = $10,000).
Now, what stock(s) can you sell to get the money, or capital, you need? Look for a company that is not as attractive as you once thought, that duplicates the industry of another stock in your portfolio, or that is overrepresented in your portfolio. Identify the stock you want to sell and its current share price.
Use this equation to figure out the number of shares to sell:
Now you have the money you need. How many shares of this new stock should you buy? Find out the current price, and do the same calculation:
Stock prices change constantly, so you have to be able to calculate buying and selling amounts easily and quickly. Consider setting up a simple table in a spreadsheet program such as Microsoft Excel. The sample below, with formulas indicated, re-calculates the number of shares depending on the dollar amount needed or available and the price of the stock.