Individual stocks
Mid–high
What it is
Buying shares of a single, specific company listed on an exchange like B3, BMV, BIVA, BVC, BYMA or the Bolsa de Santiago/Lima — or abroad. You own a real slice of that one business, with all its specific ups and downs.
How to buy it
Open an account with a regulated broker in your country, fund it, and place an order for the stock you have researched. Most brokers now let you buy fractional shares of larger international companies too.
Pros
- Full upside if the company performs well, with no fund fee taken off the top
- Direct ownership and voting rights (for common shares)
- Some pay dividends, a form of regular cash return
Cons
- Zero diversification in a single stock — company-specific risk is entirely yours
- Can underperform or fall sharply for years with no guarantee of recovery
- Requires genuine research; following tips is not a strategy
What it actually costs
A commission on each trade, a possible custody fee, the bid-ask spread on entry and exit, tax on dividends and on realised gains, and one cost nobody prices: the hours needed to read financial statements well enough to justify picking one company over the whole market. Frequent trading multiplies every item on that list.
Who it suits, and who it does not
A reasonable satellite for someone who already holds a diversified core and wants to allocate a small, defined share to individual companies. It is a poor first investment: the outcome of a single stock depends on the fate of one business, so the same 20% drop that is noise in a diversified fund can be permanent here.
A worked example
Putting a large share of your savings into one company means that if that single business stumbles for a decade, so does most of your portfolio — the same money spread across a broad index fund would have ridden out that one company's bad decade far more calmly.
Common mistakes with this instrument
- Holding a large position in your own employer, which ties your salary and your savings to the same single event.
- Confusing a famous brand with an attractive price — the quality of a company and the price you pay for it are two separate questions.
- Trading often. Every round trip pays a commission and a spread, and the evidence that frequent trading improves returns is thin.
How to reach it, country by country
Through a regulated broker on each local exchange: BMV and BIVA in Mexico, B3 in Brazil, the BVC in Colombia, the Bolsa de Santiago in Chile, BYMA in Argentina and the BVL in Peru. Foreign shares are reached through the SIC in Mexico, BDRs in Brazil and CEDEARs in Argentina — each of which is a local instrument representing a foreign share, not the share itself.