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What finally convinced you to take a st ab at buying a stock or two???
I've always been a "mutual fund" person. But a friend has just bought her first stocks, and I have to say from time to time -- I have thought about doing that. And her excitement is appealing. She's made hundreds of dollars in just two days. (She won't be trading and hopes to pass these stocks to her nieces. IF I bought I'd be holding looooong term as well.)
I've always felt that personally I'd feel I had to "watch" the stocks more than I follow what my mutual funds are doing. Do you feel that stocks need more "attention?"
What finally convinced you to take a stab at buying a stock or two???
I've always been a "mutual fund" person.
It's a question of scale... how much of your total you put at this greater risk.
Most just don't have the discipline to limit their self directed (and hopefully well researched
and dare I of all people say it -RATIONAL-) stock choices and then to stick when a hiccup in
the market shows up (they always do) rather than to take five and ride it out.
When you buy individual stocks you are a part of the machine. You get to participate in the ownership of the business and with any luck you bought it at a discount and are able to benefit from the growing profits.
Jumping into the deep end. I don't care to own individual stock. I buy large index funds Vanguard Total Stock Market, Total International Stock Market, and Tax managed small cap. That way if any one company turns out to be a stinker or goes bankrupt it has little impact, however it is very unlikely the entire US economy goes bankrupt (and if it does there are bigger problems).
My father had a knack for picking stocks of companies that went bankrupt and he read every book and watched every radio and TV show he could find. Also if most of the experts can't beat a large random selection I have little expectation I could either.
I've always felt that personally I'd feel I had to "watch" the stocks more than I follow what my mutual funds are doing. Do you feel that stocks need more "attention?"
Individual stocks absolutely do need more attention, as their value can (and sometimes has) fallen to zero. "Buy and hold forever' is NOT a safe investment strategy when dealing with individual share of stocks (as opposed to diversified (preferably indexed) mutual funds or ETFs). Before you buy a stock, you need to have some idea of how low you're willing to let its price fall before you get out - and bear in mind that if you set your "sell" price low enough, you could still sustain a 100% loss if the company is rapidly collapsing and the share prices are in absolute freefall al la Enron or Bear Stearnes. You can't sell if there are no buyers!
As to your original question: if you want to get into stock picking, I think the way to do it is to use "play money." Keep the amounts you spend purchasing individual shares low enough so that if the stock took a 100% loss you wouldn't be too distraught by it and it wouldn't significantly damage your portfolio. Then if it turns out that you have indeed purchased the next Berkshire-Hathaway or Apple, hurrah! Hold it long enough to make a decent profit, then sell it and put the gains into your mutual funds or ETFs. Then re-invest the original purchase money into another stock.
Don't take big risks, and don't be greedy, and you'll have fun stock-picking (and maybe even make some real money from it).
Wow, it's like they are advising you on snake handling or something.
I have 35 different stocks/funds, and roughly 2/3 are individual stocks. Been in the market almost exactly 5 years. Ahead on everything except a couple of recent purchases.
I like the control. Choosing the stock. Seeing the results. Rather than have it go into a "black box". Especially an index fund. It's like saying you want to drive a car, but you only use Uber.
On the other hand, my investments aren't to make a bunch on money. I don't chase IPO's or try to make a quick buck buying and selling. I choose solid, dividend paying companies. Like AT&T. Pays me 5% (if you buy now) and they raise the dividend 2% a year like clockwork.
So, if you are going for quick gains, don't bet much. Gotta have an investment strategy.
Wow, it's like they are advising you on snake handling or something.
I have 35 different stocks/funds, and roughly 2/3 are individual stocks. Been in the market almost exactly 5 years. Ahead on everything except a couple of recent purchases.
I like the control. Choosing the stock. Seeing the results. Rather than have it go into a "black box". Especially an index fund. It's like saying you want to drive a car, but you only use Uber.
On the other hand, my investments aren't to make a bunch on money. I don't chase IPO's or try to make a quick buck buying and selling. I choose solid, dividend paying companies. Like AT&T. Pays me 5% (if you buy now) and they raise the dividend 2% a year like clockwork.
So, if you are going for quick gains, don't bet much. Gotta have an investment strategy.
Your attempt at an uber analogy is one of the worst I've ever seen. Buying index funds is nothing like only choosing uber for transportation and the rest of the highlighted is losing situation for most investors
Last edited by Lowexpectations; 05-03-2017 at 11:26 PM..
What finally convinced you to take a st ab at buying a stock or two???
I've always been a "mutual fund" person. But a friend has just bought her first stocks, and I have to say from time to time -- I have thought about doing that. And her excitement is appealing. She's made hundreds of dollars in just two days. (She won't be trading and hopes to pass these stocks to her nieces. IF I bought I'd be holding looooong term as well.)
I've always felt that personally I'd feel I had to "watch" the stocks more than I follow what my mutual funds are doing. Do you feel that stocks need more "attention?"
These stocks would be in my Roth IRA.
Thanks.
What finally convinced me was that we were being robbed by our money manager and brokerage house. I fired him, transferred our IRA to my bank and decided to learn as much as I could. I opened an account at Fidelity and could trade myself.
I'm retired now and have time to spend researching and reading. But, when I started this I was working full time and hadn't a clue about investing. This was during 2008 when I saw our hard earned savings go down the tube.
I heard Cramer on CNBC yelling to sell, sell, sell. So, I called the brokerage firm and told them to sell.
I started watching Cramer at night, CNBC during the day at work (I read their articles) and started buying individual stocks.
I would sit at work on my computer and keep flashing back and forth to the market to take a look at how my stocks were doing. I did more buying and selling at work. It was more like trading. I had no idea what I was doing but when I bought a stock and it went up 10% I sold it and took the money.
I did that for a couple of years until I figured out that wasn't the best way to handle things.
You have to be prepared for your stocks to tank. Even the good ones can go down drastically and scare the crap out of you.
Buy good companies. Wait for the market to go down a bit. Most stocks are over valued now and will come down. We are probably headed into a bear market and that will be a better time to buy good stocks.
I owned some stock as a teenager. My father tried to teach me that stocks were good. For a while, my college fund was entirely in stock.
When I was born my grandparents gave $50 to my parents to be invested for my college fund. Then every year as I was growing up, at my birthday I was handed $50 and told to give that to my mother for my college fund. I was told that it was all going into a savings account at the bank. This continued until I turned 18, every year $50 went into my college fund.
When I was 15 my father took some classes on investing, he cash-outed my bank account and he put my college fund into GTE stock.
I was told that some day when I was mature I could use that college fund.
I served 6 years in the US Navy, at 24 I got out and started college. Then I was given my GTE stock. I sold all of it and I got $750.
To the best of my knowledge approximately $950 went into GTE stock [19 deposits of $50 each = $950] and after a few years it was worth $750.
That was what I had from my college fund to paly for college [fortunately I had the GI-Bill also]
That has been my experience owning stock.
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