Individual Stocks

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teacher5
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Individual Stocks

Post by teacher5 » Fri Sep 12, 2014 8:03 am

I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks

Call_Me_Op
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Re: Individual Stocks

Post by Call_Me_Op » Fri Sep 12, 2014 8:10 am

Most people here do not invest in individual stocks in any significant way. The reason is it doesn't make sense from a risk-adjusted return perspective. Said differently, you are taking a lot of additional risk (compared to index funds) for which you are not compensated by greater expected return. One mantra of prudent investing is to take additional risk only when you can expect greater return.

If you think that you are likely to "beat the market", that is, beat the appropriate benchmark on a consistent basis, this would reflect a lack of understanding of how the market works.
Last edited by Call_Me_Op on Fri Sep 12, 2014 8:14 am, edited 1 time in total.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Grt2bOutdoors
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Re: Individual Stocks

Post by Grt2bOutdoors » Fri Sep 12, 2014 8:14 am

http://www.bogleheads.org/forum/viewtop ... 1#p2186151

Click the link above - recent poll on individual stocks.
If you search the forum on dividend paying stocks or equities you'll see that not everyone on the board is a purist, including myself. I hold individual equities and index funds, though the majority (75%+) is in index funds in various flavors. :)
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

teacher5
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Re: Individual Stocks

Post by teacher5 » Fri Sep 12, 2014 8:21 am

Thanks! I have a few individual stocks, but each one is at the most 3 % of my total net worth. Hopefully I will get more input! I'm glad to hear I am not totally alone.

triggerfish10
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Re: Individual Stocks

Post by triggerfish10 » Fri Sep 12, 2014 8:50 am

Just before discovering this website and the associated Boglehead investing philosophy, I purchased a few purely speculative individual stocks in my Roth IRA. Most of them have thus far lost :moneybag , but since you cannot tax loss harvest from a Roth I am simply going to ride out the storm and see what happens. I would not have purchased these companies had I known then what I know now.

Additionally, I do get a 10% discount on my own company's stock, and I have done well with that thus far.
"A quiet and modest life brings more joy than a pursuit of success bound with constant unrest" - Albert Einstein

teacher5
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Re: Individual Stocks

Post by teacher5 » Fri Sep 12, 2014 9:05 am

The few individual stocks I have are not speculative, they are large dividend payers.

dbr
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Re: Individual Stocks

Post by dbr » Fri Sep 12, 2014 9:13 am

teacher5 wrote:The few individual stocks I have are not speculative, they are large dividend payers.
One of the earliest fundamentals about risk is the concept of diversifiable risk and eliminating that risk by holding lots of different stocks. This has nothing to do with speculation or dividends.

If you are asking if there is a universal opinion on this board against entertaining oneself understanding the prospects of companies and realizing that by holding some individual stocks, then there is certainly no opinion against that at all.

avalpert
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Re: Individual Stocks

Post by avalpert » Fri Sep 12, 2014 9:29 am

teacher5 wrote:The few individual stocks I have are not speculative, they are large dividend payers.
What about large dividend payers makes their future returns not speculative?

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Sbashore
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Re: Individual Stocks

Post by Sbashore » Fri Sep 12, 2014 3:08 pm

teacher5 wrote:I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks
I got that out of my system in the 90's. :happy I'm now exclusively in index funds, although I must confess to buying GE at 8.00 during the 2008-early 09 unpleasantness. I have a lot of resistance but that was too much.
Steve | Semper Fi

hoops777
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Re: Individual Stocks

Post by hoops777 » Fri Sep 12, 2014 3:50 pm

Curious if anyone invests in utilities for income.Keep getting ads from Roger Conrad and his Utilities or essential services newsletter.Actually has a good long term track record.I do not know if the dividends from Utilities are more secure compared to regular stocks if one was taking the dividends monthly for income only and could ignore the stock price up and downs.
K.I.S.S........so easy to say so difficult to do.

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Taylor Larimore
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"A fool's errand"

Post by Taylor Larimore » Fri Sep 12, 2014 4:50 pm

teacher5 wrote:I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks
teacher5:

I once thought it would be easy for me to pick winning stocks, but sad experience has now convinced me of this 3-step logic:

1. It is unreasonable to expect that an ordinary investor can pick stocks (except by luck) better than a full-time, experienced, mutual fund manager with a dedicated research staff and large computers available.

2. The average mutual fund manager can't beat their benchmark index.*

3. Therefore, investing in a diversified index fund is the winning strategy.


* The Arithmetic of Active Management
Attempting to build an investment program around a handful of individual securities is, for all but the most exceptional investors, a fool's errand. -- Jack Bogle
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

LongerPrimer
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Re: Individual Stocks

Post by LongerPrimer » Fri Sep 12, 2014 7:25 pm

Yes.
Approx 20-25% of retirement equity/investing assets are in discretionary stocks/mutuals.
However, these investing assets represent only <10% of estimated SWR (3.5-4.0%) of total retirement assets that includes SS, pension, and GWLI annuities. The SS and annuities are essentially inflation protected. The pension is fixed. I know that when first RMD hits in 4 years, I know what our minimum will be, and that minimum is enough. If markets increase 8% for the next 3 years or another big year like 2013, we will have more than enough. Because the GWLI deferred annuities have done so well, the equity investing bucket is now purely gravy and icing.

Are the equity investing in utilities? Yes, currently about 30-40% in a high yielding and investment grade utility that is local. 4.1% dividend yield. I shoot for 6% total yield.
Remainder equities are highly speculative, they are foremost in their industry.

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nisiprius
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Re: Individual Stocks

Post by nisiprius » Fri Sep 12, 2014 7:54 pm

I used to, and I don't any more.

I never did it a lot--I have made perhaps 20 brokerage stock transactions in my life. (My lifetime profit is positive, no idea what my lifetime internal rate of return is). The last time I traded a stock was in 3/2000, when I sold 25 shares of a stock for $3114 after having bought them 08/1999 for $2683.

No, wait, I am fibbing--I bought my granddaughter one share of stock in April, 2008(!) from oneshare.com, a company that specializes in obtaining stock certificates for one share of stock and enclosing them in spiffy presentation packages.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

TravelerMSY
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Re: Individual Stocks

Post by TravelerMSY » Fri Sep 12, 2014 9:43 pm

Yes, but it's with a small fraction of my portfolio as a hobby.

The thing is that even if you get good results, the time invested isn't worth it unless your running a large book. Say you consistently beat the indices by 5% or more.... you're only earning an extra 5k/year if your play portfolio is maybe 10% max of a 1 M total portfolio.

TravelerMSY
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Re: Individual Stocks

Post by TravelerMSY » Fri Sep 12, 2014 9:49 pm

I would give anyone here a pass on picking single names- as long as they hold 500 of them :)

knappster
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Re: Individual Stocks

Post by knappster » Fri Sep 12, 2014 10:22 pm

Outside of the bogleheads philosophy, there are a lot of different schools of thought on investing. My grandfather invested in the stock market long before IRA's, 401k's, and Index Funds were in existence and I would suspect that mutual funds were not nearly as prominent. He invested (not traded) in well established companies. From what I gather he did very well, but I have no data to provide on exactly how well or how it would compare to the market as a whole.

I myself have followed a similar strategy in a Roth IRA, which focuses on companies which I am investing in, not trading. My long-term plan is to continue investing more, I do not have plans to sell at x or y amount. Let's face it, if you are selecting individual stocks, you are being very speculative. I select stocks based on how strong I think they are financially, whether I think they will continue to grow, and I focus on a certain amount of dividend payment which I reinvest. This is because it is a Roth IRA and the dividends and capital gains are not taxable. I opened the Roth IRA about 10 years ago and have been very fortunate on returns. I have just recently been comparing it to some of my other retirement investment accounts and it has substantially outperformed them on internal rate of return, but I understand that I am taking a substantial risk, which could easily do a complete 180. Not everybody has that risk tolerance or the same amount of time to recover if that were to completely back-fire.

Approximately 38% of my retirement portfolio is held in individual stocks. The only fees I pay on the individual stocks are the $6.95 commissions to buy additional shares, usually $1500ish at a time, so less than 0.5% commission (and once every several years paying a fee to tender shares or sell a spinoff that does not fit into my portfolio). I may get verbally abused for admitting that on these forums, but I do find a certain satisfaction in investing the way I do. As I get older and hopefully have more money on the line, things may change...

Pizzasteve510
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Re: Individual Stocks

Post by Pizzasteve510 » Fri Sep 12, 2014 11:16 pm

avalpert wrote:
teacher5 wrote:The few individual stocks I have are not speculative, they are large dividend payers.
What about large dividend payers makes their future returns not speculative?
Bank of America was a very stable large dividend payer. What happened to them? What is their dividend currently? How volatile has the stock been?

They are far from the worst case scenario and may recover...will they? When?

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nedsaid
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Re: Individual Stocks

Post by nedsaid » Fri Sep 12, 2014 11:20 pm

I do both, but index funds are better than active funds which are better than individual stocks. In recent years I have de-emphasized my individual stocks in favor of funds. I have always believed that broad diversification is better than narrow diversification. The investing world is pretty darned risky. Be careful out there.
A fool and his money are good for business.

MP173
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Re: Individual Stocks

Post by MP173 » Sun Sep 14, 2014 6:23 pm

I own 19 companies. I do not own individual stocks, I own companies. That is my attitude. While I am not privy to all the details of their operations, finances, and have only met a few of the senior managers, I consider myself "owner". Companies are reviewed frequently.

One of my companies has gone bankrupt and out of business. I learned from that. There are several important factors to consider if you are going to own individual companies. As mentioned here by so many, your risk will be considerably higher than purchasing mutual funds. If your risk is higher, then you should be rewarded for that risk. If you are not rewarded for that risk then you should not be involved. How do you reward yourself? That is up to you to determine. Obviously the answer is to select companies which will outperform the market...but how does one do that? Can one do that over the long term?

I do not recommend individual ownership. I do not discourage it either. What should be done is have an investment plan or philosophy in place which dovetails with your long term and short term goals. Ask yourself why you own this company (or mutual fund, or investment property, etc) and how it fits in your plan.

Ed

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cfs
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Re: Individual Stocks

Post by cfs » Sun Sep 14, 2014 6:34 pm

Still holding ONE.

Used to have a collection of individual stocks (including a couple of ten-baggers) and mutual funds. Slowly sold them and currently hold a single stock (less than 4% of the portfolio). As far as buying individual stocks in the future, it is not going to happen as I no longer have the willingness, ability, or need for extra risk, and I no longer have the stomach to trade or invest aggressively. Thanks for reading used to be my closing statement but is now part of my signature.
~ Member of the Active Retired Force since 2014 ~

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Yesterdaysnews
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Re: Individual Stocks

Post by Yesterdaysnews » Sun Sep 14, 2014 7:04 pm

I am a passive investor for my entire retirement portfolio I keep at Vanguard.

But, I also buy individual stocks but only if I can get IPO pricing.

Getting in at IPO pricing is difficult but not impossible, and when I am able to get IPO shares of attractive looking deals I buy them. These are not huge amount of shares or money but I enjoy it. I usually hold and don't flip but I generally do very well in that portfolio. I typically sell after 1 year or more to keep lower taxes.

I also like to invest in private equity deals. These are usually in things you can touch, which I like, as it is a totally different arena to standard stocks and bonds.

kaudrey
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Re: Individual Stocks

Post by kaudrey » Mon Sep 15, 2014 3:06 pm

We own about 15 different stocks. Most are blue chip dividend earners, but we also own a little of some smaller, speculative companies. In total, they are all about 12% of my portfolio. Of the blue chips, most were bought quite a number of years ago, before I had an IRA, so they are in my taxable account, and I will likely hold them until I retire so I can sell them at a lower capital gains tax rate.

The others are what we consider our "play" money, shooting for the short term quicker gains. Those are in the IRA now, for tax purposes.

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abuss368
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Re: Individual Stocks

Post by abuss368 » Mon Sep 15, 2014 3:22 pm

We have not owned an individual stocks in over 6 years after a lifetime of investing in them. I can not see going back to individual stocks at this point. Index funds have worked so well. The investing world is risky so be careful.

Thank you Jack Bogle!

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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oldzey
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Re: Individual Stocks

Post by oldzey » Mon Sep 15, 2014 3:25 pm

After 2 years of using 5% of my portfolio to dabble in individual stocks, I have now sold the last of them. Between losses, gains, and fees, I made about $100 and wasted a lot of energy and stomach acid doing so.

It was an interesting experience, if but to reinforce the notion that "You Rarely, If Ever, Know Something The Market Does Not".

I will never buy individual stocks ever again - lesson learned. :D
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

avalpert
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Re: Individual Stocks

Post by avalpert » Mon Sep 15, 2014 4:04 pm

kaudrey wrote:We own about 15 different stocks. Most are blue chip dividend earners, but we also own a little of some smaller, speculative companies. In total, they are all about 12% of my portfolio. Of the blue chips, most were bought quite a number of years ago, before I had an IRA, so they are in my taxable account, and I will likely hold them until I retire so I can sell them at a lower capital gains tax rate.

The others are what we consider our "play" money, shooting for the short term quicker gains. Those are in the IRA now, for tax purposes.
I don't know if you are holding on to them for reasons other than the tax hit - but if you don't want to wait until retirement you should consider using those shares in place of cash for charitable donations you may give - it erases the capital gains hit altogether.

Trader Joe
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Re: Individual Stocks

Post by Trader Joe » Mon Sep 15, 2014 4:06 pm

Yes absolutely.

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abuss368
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Re: Individual Stocks

Post by abuss368 » Tue Sep 16, 2014 1:44 pm

oldzey wrote:After 2 years of using 5% of my portfolio to dabble in individual stocks, I have now sold the last of them. Between losses, gains, and fees, I made about $100 and wasted a lot of energy and stomach acid doing so.

It was an interesting experience, if but to reinforce the notion that "You Rarely, If Ever, Know Something The Market Does Not".

I will never buy individual stocks ever again - lesson learned. :D
That is interesting and we can relate to it. Ah, the memories of our evil stock picking days!

Thank you Jack Bogle!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Toons
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Re: Individual Stocks

Post by Toons » Tue Sep 16, 2014 1:50 pm

Once I had established a diversified portfolio of mutual funds,and that amount exceeded 100k,then I bought a handful of equities(Msft,KO,Wmt,Dis,Mcd,Px,D) with the plan of holding them for decades.That is the way I would approach it,mutual funds first. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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linenfort
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Re: Individual Stocks

Post by linenfort » Tue Sep 16, 2014 2:17 pm

Yes, about 45, mostly from pre-Boglehead days.
A few of them: Lockheed Martin, Philip Morris Int'l, Chevron, Dunkin Donuts, Pepsi, Praxair, Union Pacific, Travelers, Google, Actavis, Tesla, Berkshire B shares.
MP173 wrote:I own 19 companies. I do not own individual stocks, I own companies. That is my attitude. While I am not privy to all the details of their operations, finances, and have only met a few of the senior managers, I consider myself "owner".
That's a bit cryptic, isn't it. It sounds like you own 19 stocks but like to pretend you own the company, when in fact you own 19 pieces of paper (if you mean own the stocks) and occasional voting rights. Warren Buffett owns companies. Shareholders own pieces of paper.
bogleheads, don't knock state lotteries. They helped defund the mafia.

RTR2006
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Re: Individual Stocks

Post by RTR2006 » Tue Sep 16, 2014 4:18 pm

I own a significant block of GE that I bought at just over $7/share in March 2009. I also own some AT&T stock, and I buy GE and P&G stock every month through a DRIP plan. That is seen and kept as more of a forced savings plan, since every few years when I seem to need $20-30,000 for something we have tended to reach for those.

RTR

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Runalong
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Re: Individual Stocks

Post by Runalong » Sat Sep 20, 2014 2:26 am

I own about 30, about half of my portfolio is in individual stocks. I agree with the BH philosophy except for those who say that it is impossible to beat index funds (I agree that it is rare). Beating the index isn't so much about brains as it is about emotions. You pretty much have to have a heart of stone when it comes to your investments. I try not to let that carry over into the rest of my life but that's for others to judge, not me.

BradMajors
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Re: Individual Stocks

Post by BradMajors » Sat Sep 20, 2014 12:01 pm

I bought one stock that has gone up 2,500% and another that has gone up 2,000%. Because of this past experience, I still occasionally buy individual stocks.

Clive
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Re: Individual Stocks

Post by Clive » Sat Sep 20, 2014 6:41 pm

If you hold perhaps 4 stocks in each of 9 sectors (36 stocks) in equal proportion (2.8% weighting each) that might be no riskier/safer than buying the Dow 30.

In the UK dividend income is taxed differently from price appreciation. For a basic rate taxpayer there will be no further tax on dividends and if the dividends are reinvested then that cost averages up the average cost of stock - helping to reduce subsequent capital gains tax - which is applied to nominal gains (taxflation). We're allowed £11,000 ($18K) of exempt capital gains each year, so gains can be harvested to utilise such tax exemption. That's a use it or lose it yearly allowance and in some years a index might not be up, whilst a portfolio of stocks might have the collective average also down, but one or more individual stocks might still be up within that such that the capital gain allowance can still be used rather than lost.

In some cases a stock might throw off a unexpected capital gain, which could invoke a taxable event (takeover). When you hold individual stocks there may be another stock that is relatively down in price that might be sold to negate the amount of tax that falls due from the stock that was taken over.

Whilst comparing the difference between a portfolio of individual stocks and a index gross total gains (capital + dividend reinvested) might indicate similar risk/reward, on a net of taxes basis the portfolio of stocks can in some cases be the more tax efficient. But you'll spend more time/effort (and incur more trading costs) to manage a portfolio of individual stocks than you would with a index/fund.

dharrythomas
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Re: Individual Stocks

Post by dharrythomas » Sat Sep 20, 2014 8:18 pm

We own stock in 2 community bank start ups. (We'd have spent the funds if we hadn't bought the bank stock) Don't have a listed market value but the dividends are pretty good and increasing. My estimate is less than10% of portfolio (that we're still adding to) and that doesn't count pension income that will exceed our needs. We're stuck with these stocks for the long term. These are the only individual stocks we've ever owned (DW wouldn't let me buy Berkshire Hathaway)

Ron Ronnerson
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Re: Individual Stocks

Post by Ron Ronnerson » Sat Sep 20, 2014 8:32 pm

My wife has a few shares of AT&T stock because they were given as a gift by her grandmother long ago. She holds on to it for sentimental reasons. Other than that, we don't own any individual stocks.

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topper1296
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Re: Individual Stocks

Post by topper1296 » Sun Sep 21, 2014 1:08 am

Most of what I have is indexed, however I do hold 15 individual stocks (most pay a dividend, but not all). I might add a few more at some point in the future, but never see myself holding over 20.

ny_rn
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Re: Individual Stocks

Post by ny_rn » Tue Sep 23, 2014 4:35 am

I recently sold all of my stocks in my Sharebuilder account totaling less than $1k. I am moving that money over to my VTSMX (within my Roth IRA).

I do hold a DRIP account with Exxon Mobil Corp, but I have no idea what to do with this.

In the end, I am out of the stock picking game. Indexing from here on out.

IPer
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Re: Individual Stocks

Post by IPer » Tue Sep 23, 2014 6:03 am

I hold a lot of the dividend champion stocks and some other companies I just like. I love this portfolio I picked up from an advisory service (I already had a bunch of these positions when I came across it) but have not filled
it all yet. My order of dedication is

1. Balanced Index Portfolio - IRA/SEP IRA contributions
2. Dividend and Income like the portfolio below
3. Other companies I like for some reason along the way like CarMax Inc. (KMX) and Berkshire Hathaway (and about 20 others):

INCOME Ticker Yield
Target TGT 2.90%
BP BP 5.00%
Government Properties Income Trust GOV 7.40%
Invesco Value Municipal Income Trust IIM 6.00%
Nuveen Quality Preferred Income Fund 2 JPS 7.40%
UIL Holdings UIL 4.70%
Gladstone Capital GLAD 8.80%
Invesco Value Municipal Income Trust IIM 6.00%
AllianceBernstein AB 6.70%
Nuveen Quality Preferred Income Fund 2 JPS 7.40%
Ensco ESV 6.50%
Bank of Montreal BMO 3.70%
Blackrock Floating-Rate Income Fund FRA 6.30%
Nuveen Floating-Rate Income Opportunity Fund JRO 6.70%
Allianz AZSEY 4.20%
iShares International Select Dividend Fund IDV 5.00%

Dividend Stocks Ticker Yield
McDonald's MCD 3.50%
Wal-Mart WMT 2.50%
Altria MO 4.50%
Coca-Cola KO 2.90%
Johnson & Johnson JNJ 2.60%
Procter & Gamble PG 2.10%
Microsoft MSFT 2.40%
Becton-Dickinson BDX 1.90%
Sysco SYY 3.00%
Intel INTC 2.60%
Apple AAPL 1.80%

American Oil Ticker Yield
Enterprise EPD 1.80%
DCP Midstream Partners DPM 5.50%
Williams Partners WPZ 7.70%
Vanguard Natural Resources VNR 7.90%
Kinder Morgan Mgmt KMR 0.00%
Spectra Energy Partners SEP 4.10%
Read the Wiki Wiki !

IPer
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Re: Individual Stocks

Post by IPer » Tue Sep 23, 2014 6:06 am

hoops777 wrote:Curious if anyone invests in utilities for income.Keep getting ads from Roger Conrad and his Utilities or essential services newsletter.Actually has a good long term track record.I do not know if the dividends from Utilities are more secure compared to regular stocks if one was taking the dividends monthly for income only and could ignore the stock price up and downs.
I have a position in 3 or 4 major utility companies and have never thought of selling them.
Read the Wiki Wiki !

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interplanetjanet
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Re: Individual Stocks

Post by interplanetjanet » Tue Sep 23, 2014 6:10 am

The only individual stock I hold is my employer's, and I sell it as soon as my trading window opens. In hindsight I've given up some gains, but I would much rather have money in the hand than stress about uncompensated risk due to lack of diversity.

bpp
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Re: Individual Stocks

Post by bpp » Tue Sep 23, 2014 6:43 am

hoops777 wrote:I do not know if the dividends from Utilities are more secure compared to regular stocks if one was taking the dividends monthly for income only and could ignore the stock price up and downs.
They're not.
rkatz0 wrote:I have a position in 3 or 4 major utility companies and have never thought of selling them.
I have a position in 3 or 4 major utility companies, and am in the process of loss-harvesting them.
(One might be surprised at what one tiny little nuclear meltdown or three can do to an entire industry.)

YDNAL
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Re: Individual Stocks

Post by YDNAL » Tue Sep 23, 2014 7:01 am

teacher5 wrote:I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks
I don't own individual company stocks. The reason is the exact opposite of your reason for owning them.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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Re: "A fool's errand"

Post by BeachGrl27 » Tue Sep 23, 2014 7:58 am

Taylor Larimore wrote:
teacher5 wrote:I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks
teacher5:

I once thought it would be easy for me to pick winning stocks, but sad experience has now convinced me of this 3-step logic:

1. It is unreasonable to expect that an ordinary investor can pick stocks (except by luck) better than a full-time, experienced, mutual fund manager with a dedicated research staff and large computers available.

2. The average mutual fund manager can't beat their benchmark index.*

3. Therefore, investing in a diversified index fund is the winning strategy.


* The Arithmetic of Active Management
Attempting to build an investment program around a handful of individual securities is, for all but the most exceptional investors, a fool's errand. -- Jack Bogle
Best wishes.
Taylor
This is powerful. I'm new here and took these words to heart. No one ever explained stocks to me in this way. Thank you so much.

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Taylor Larimore
Advisory Board
Posts: 27508
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Individual Stocks

Post by Taylor Larimore » Tue Sep 23, 2014 10:46 am

ny_rn wrote:I recently sold all of my stocks in my Sharebuilder account totaling less than $1k. I am moving that money over to my VTSMX (within my Roth IRA).

I do hold a DRIP account with Exxon Mobil Corp, but I have no idea what to do with this.

In the end, I am out of the stock picking game. Indexing from here on out.
ny_rn:

Congratulations for joining the winner's game.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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leonidas
Posts: 415
Joined: Sun Jul 10, 2011 8:58 am
Location: Mansfield Township, NJ

Re: Individual Stocks

Post by leonidas » Tue Sep 23, 2014 11:10 am

I am about 90% indexed and own 8 individual issues. Usually large cap div payers. ABBV, ABT, CBOE..I had Heinz but Buffet bough tit from me at a hefty premium. I do still look for distressed value plays but have become very selective in what I buy. The last stock I bought was in 2010.

Faith20879
Posts: 578
Joined: Fri Mar 02, 2007 10:16 am

Re: Individual Stocks

Post by Faith20879 » Tue Sep 23, 2014 11:43 am

Yes, I still own 4 dividend companies from the pre-BH days. My 10 year average return roughly aligns with the S&P 500. That tells me that I am no smarter than average and that all the time and energy spent was a wash. I am looking to sell once our tax brackets get lower.

On the other hand, DH also holds in his IRA a handful "high quality" dividend stocks that was put together by a big-name brokerage "advisor". During the great recession every NAV plunged and none has recovered as of today and a few dividends slashed to 0. Remember Citi? Everytime, when a Citi executive is reported to receive a big payout or the brokerage firm is about to distribute record-making bonuses, DH will be preparing for a night on the sofa to escape my wrath. :P

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fatlittlepig
Posts: 204
Joined: Wed May 22, 2013 4:23 pm

Re: Individual Stocks

Post by fatlittlepig » Tue Sep 23, 2014 11:46 am

teacher5 wrote:I have a curiosity question. Do you invest in any individual stocks, or only in mutual funds? I do like to evaluate companies and have a few individual stocks, I'm curious about others on the forum.

Thanks
go for it, you don't need the permission of random forum people. I have done well owning a basket of blue chip stocks along with mutual funds
fatlittlepig

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