Newbie Needs Advice (bonds, mutual funds, cash, 401k)

[Armyman2007]

I am 31 years old and hope to retire at 60. I started buying stock last week thinking the bottom was near. I bought mostly GM and F which have tanked as of late. I bought GM at $8.05 and F at $4.53. What kind of time frame do you think it will be before these 2 automakers stocks return to my purchase price? I am thinking about selling them tomorrow and taking the loss and investing in stocks that pay dividends. What do you guys think.

[maf763]

Sorry to say, but the stock market may not be your thing. Impulse buying and selling is too risky.

[ylisa7]

Originally Posted by Armyman2007

I am 31 years old and hope to retire at 60. I started buying stock last week thinking the bottom was near. I bought mostly GM and F which have tanked as of late. I bought GM at $8.05 and F at $4.53. What kind of time frame do you think it will be before these 2 automakers stocks return to my purchase price? I am thinking about selling them tomorrow and taking the loss and investing in stocks that pay dividends. What do you guys think.

Personally, I would dump the shares. I really think GM is going to go bankrupt or need a serious infusion. You didn't take too much of a beating on F so that one isn't bad. "Now" is not the time to be learning about the stock market. We are watching History. Wait until the dust settles and learn everything you can about the companies you want to buy. Things are going to be very bumpy for the next few months(at least).

Sit on the side lines for awhile. You may miss a few up days but if you are in it for the long term you don't want to start off with the down days.

Good luck to you. I would sell today but don't buy anything else today. We have a long weekend and anything can happen.

Lisa

[heydade]

are you nuts ? You bought them dirt cheap. Yes...GM is now down to 4-5 dollars, but they WILL come back up. Do not sell ! once you sell, you lose PERMANENTLY. Why would you want to do that ? Wait for the rebound. If you bought at 25.00, I would tell you differently, but at 8 bucks a share, you got a deal ! Patience young grasshopper...patience. Also worth looking into at .40 cents a share is SIRI (Siri-XM sattelite radio)

[Oildog]

I have also purchased F under 5. My time frame is a couple years. I may pick up a little more now that its in the 2s. I should note these were purchased in my 'speculative' account. I'm also looking at commodities like FCX.

[NewJersey?]

You need to start investing in mutual funds or stocks which mimick the broader stock market. You also need to diversify your portfolio so not one stock's price would have such an adverse affect on your total investment portfolio. You can hold onto individual stocks with 5 or even 10% of your total portfolio, but even that is a bit high.

I would recommend something like Vanguard mutual fund company. They have many index funds with very little expense ratios. They also have good funds to choose from that don't mimick the markets and try to beat the market as a whole.

You also would benefit from a mix of domestic and international funds/stocks in your portfolio along with bonds and even precious metals. The right mix of these with dollar cost averaging 'right now' will reward you by the time you retire, IMO.

Yes, prices are low and they 'might' get lower. No one knows. But if you DCA your money every week/month, you will be buying more shares while they are lower and reap the rewards of those extra shares when they finally do turn around. good luck.

[chris_ut]

If you sell now your an idiot.

[MuddyAxles]

Originally Posted by heydade

are you nuts ? You bought them dirt cheap. Yes...GM is now down to 4-5 dollars, but they WILL come back up. Do not sell ! once you sell, you lose PERMANENTLY. Why would you want to do that ? Wait for the rebound. If you bought at 25.00, I would tell you differently, but at 8 bucks a share, you got a deal ! Patience young grasshopper...patience. Also worth looking into at .40 cents a share is SIRI (Siri-XM sattelite radio)

I agree.

You got 'em now, hold 'em, the cash is gone...for now.

They will go up. Sell now and confirm your loss, etching it in stone, or wait and you may be very happy.

How much does a guy just starting out stand to lose, knowing so little about these stocks?

Don't feel too bad, son. I followed the rules, mostly, trying to put as much as I could afford into the 401k's. I have been in them for several years, spread them over many different funds, and contributed what I could each week. They were worth several tens of thousands. Not a fortune, but my pension add-on.

The 401k's have lost what, maybe a quarter or third of their value? They are worth less than the cash I have put in...all growth is gone and more, amounting to a few years withdrawls. All I can do is wait for growth now. Early retirement is out of the question. You have time on your side...use it wisely!

[Dd714]

Originally Posted by Armyman2007

I am 31 years old and hope to retire at 60. I started buying stock last week thinking the bottom was near. I bought mostly GM and F which have tanked as of late. I bought GM at $8.05 and F at $4.53. What kind of time frame do you think it will be before these 2 automakers stocks return to my purchase price? I am thinking about selling them tomorrow and taking the loss and investing in stocks that pay dividends. What do you guys think.

Automotive stocks? WTF? That would be like the last industry in the world I would invest in, regardless of the world economic situation. The question is not when will these automakers improve, but will they survive at all.

Invest in a diversifed fund or collection of funds. The key is DIVERSIFIED!!! You don't want all your eggs in one basket.

[Nepenthe]

Ford is up 26% and GM is up 30% today.

I know that doesn't make you whole again, but it has to make you feel a little better...