Mutual funds and Index funds are not always the best (bonds, Scottrade)
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As some of you know, I invest in individual stocks vs mutual funds and index funds. Many of you feel I am not diversified enough and my stocks are too similar. I read this today on Yahoo News about a man who was recommending Nvidia. His style of investing may not be for everyone, but look at what he did with his money. AMAZING!
“ Just buy it and hold it and don't fret the short term volitility. Time is your friend. I'm 70 years old and opened my first brokerage account in 1975 with USAA when I was 21 years old. Most of what I bought up until the late 80's were mutual funds. At the advent of the internet boom in the 90's I began to trade individual stocks and used Scottrade. During the next 10 years my trading was hit or miss. When my parents passed a few years apart in early 2000 - 2004 I inherited 250k and began investing in stocks for the long term looking forward to retirement in my 60's. I bought GOOG shortly after the IPO in 2004 at $90 a share, still have those shares with an initial investment of $5,000 for 59 shares bought in the 2004 IPO has now turned $321,503. My best investment even after dropping since this August has been AAPL purchased roughly 10K in December 2004 now worth more than 5 million. Others I've bought and held for 20 years are MSFT, CSCO, AVGO, NFLX, and others. If I had sold these the way most of you trade in and out on every dip I would never had a chance at enjoying the wealth I have today. This post is long but the point is if you want the bulk of profit available to you then you need to forget where NVDA will be Monday, next month or next year and be willing to hold it a minimum of 5 years. I said minimum and it would be better if you would to hold 10 - 20 years. You'll make more like that than any job will ever provide. Just buy NVDA and hold it 20 years.”
As some of you know, I invest in individual stocks vs mutual funds and index funds. Many of you feel I am not diversified enough and my stocks are too similar. I read this today on Yahoo News about a man who was recommending Nvidia. His style of investing may not be for everyone, but look at what he did with his money. AMAZING!
“ Just buy it and hold it and don't fret the short term volitility. Time is your friend. I'm 70 years old and opened my first brokerage account in 1975 with USAA when I was 21 years old. Most of what I bought up until the late 80's were mutual funds. At the advent of the internet boom in the 90's I began to trade individual stocks and used Scottrade. During the next 10 years my trading was hit or miss. When my parents passed a few years apart in early 2000 - 2004 I inherited 250k and began investing in stocks for the long term looking forward to retirement in my 60's. I bought GOOG shortly after the IPO in 2004 at $90 a share, still have those shares with an initial investment of $5,000 for 59 shares bought in the 2004 IPO has now turned $321,503. My best investment even after dropping since this August has been AAPL purchased roughly 10K in December 2004 now worth more than 5 million. Others I've bought and held for 20 years are MSFT, CSCO, AVGO, NFLX, and others. If I had sold these the way most of you trade in and out on every dip I would never had a chance at enjoying the wealth I have today. This post is long but the point is if you want the bulk of profit available to you then you need to forget where NVDA will be Monday, next month or next year and be willing to hold it a minimum of 5 years. I said minimum and it would be better if you would to hold 10 - 20 years. You'll make more like that than any job will ever provide. Just buy NVDA and hold it 20 years.”
I am fine with the diversification advice etc. But as you point out holding a couple of stocks that do not fit the rules is fine. I think of them as a different bucket and do not include in my more formal investing.
I don’t think this is appropriate for most. One needs to ask what is the end goal. If you start investing in a good mutual or index fund early in your life, there is no need to take this type of individual stock risk. A personal finance class should be required in every high school, showing young people how much they need to invest to get to a certain point 40 or 50 years later. We are perfect examples of this. The only stock I’ve ever owned was a utility stock in my 20s. Otherwise, it has been all mutual funds. After many years of consistent savings and mutual fund returns, we, as retirees, are now in an excellent financial position. The key is to start early, be smart with your money, and prioritize saving.
I don’t think this is appropriate for most. One needs to ask what is the end goal. If you start investing in a good mutual or index fund early in your life, there is no need to take this type of individual stock risk. A personal finance class should be required in every high school, showing young people how much they need to invest to get to a certain point 40 or 50 years later. We are perfect examples of this. The only stock I’ve ever owned was a utility stock in my 20s. Otherwise, it has been all mutual funds. After many years of consistent savings and mutual fund returns, we, as retirees, are now in an excellent financial position.
i am with you there .
when i started investing general motors , ibm , at&t , etc were all the rage and place to be .
they either ended up in the failed blue chip graveyard or hurt their investors . the thought that GM would fail was as foreign as could be .GM WAS AMERICA
nothing beats diversified funds for most people over the long term .
it’s okay to dabble in what one thinks is a 10 bagger but in my opinion it’s a dangerous game for most to make it the core
I don’t think this is appropriate for most. One needs to ask what is the end goal. If you start investing in a good mutual or index fund early in your life, there is no need to take this type of individual stock risk. A personal finance class should be required in every high school, showing young people how much they need to invest to get to a certain point 40 or 50 years later. We are perfect examples of this. The only stock I’ve ever owned was a utility stock in my 20s. Otherwise, it has been all mutual funds. After many years of consistent savings and mutual fund returns, we, as retirees, are now in an excellent financial position. The key is to start early, be smart with your money, and prioritize saving.
It’s definitely not for everyone, I invested in Mutual funds in my 401K while I was working. I started investing in individual stocks in 2011 when I bought Apple. I did so well with that stock that I eventually sold the index funds and now I hold only individual stocks.
I don’t recommend this for most people. But if you do invest in stocks, try to hold for the long term.
I agree with the part about buy and hold. I run what I consider a coffee can portfolio of individual stocks that I buy with every intention of holding basically forever. I currently own AAPL, AJG, BAC, BRK-B, HD, LVMUY, TSCO, TXN and V, with smaller but growing positions in CPRT, RACE and TFII. I like quality companies, and as long as I don't vastly overpay, they'll all do well over the long run. I couldn't care less about diversification in the coffee can, just high quality businesses bought at what I hope are fair prices, growing their dividends, buying back shares and keeping the compounding snowball going. My kids will likely inherit all of these from me some day.
This coffee can portfolio constitutes approx. 10% of my invested assets, with the other 90% being in a diversified mix of actively managed large, mid and small cap stock mutual fund and index funds, so there's the diversification piece.
Here's a great article on Seeking Alpha that get's more into the coffee can portfolio idea for anyone who's interested. One of the best SA pieces I've ever read:
I agree with the part about buy and hold. I run what I consider a coffee can portfolio of individual stocks that I buy with every intention of holding basically forever. I currently own AAPL, AJG, BAC, BRK-B, HD, LVMUY, TSCO, TXN and V, with smaller but growing positions in CPRT, RACE and TFII. I like quality companies, and as long as I don't vastly overpay, they'll all do well over the long run. I couldn't care less about diversification in the coffee can, just high quality businesses bought at what I hope are fair prices, growing their dividends, buying back shares and keeping the compounding snowball going. My kids will likely inherit all of these from me some day.
This coffee can portfolio constitutes approx. 10% of my invested assets, with the other 90% being in a diversified mix of actively managed large, mid and small cap stock mutual fund and index funds, so there's the diversification piece.
Here's a great article on Seeking Alpha that get's more into the coffee can portfolio idea for anyone who's interested. One of the best SA pieces I've ever read:
sounds like the coffee can portfolio should go with the coffehouse portfolio
Asset Allocation
10% Large Cap Blend
10% Large Cap Value
10% Small Cap Blend
10% Small Cap Value
10% International Stocks
40% Intermediate Bonds
10% REITs
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