How many of you invest in individual stocks?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Do you invest in individual stocks?

Funds only
93
43%
Serious stock position
47
22%
Small stock position
76
35%
 
Total votes: 216

Sagenick48
Posts: 339
Joined: Sat Nov 02, 2013 8:22 am

Re: How many of you invest in individual stocks?

Post by Sagenick48 » Mon Mar 30, 2015 2:04 pm

I find these posts kinda frustrating for two reasons.

First, they ignore time. I started investing in individual stocks in 1974. That was before the first index fund existed.

Second, and this is tied to the first, it ignores tax implications. For example, the second of those 1974 investments, a total of $3k, today returns, in dividends, $3k annually. I would be looking at cap gains of at least 35% state and federal combined if I sold it. That makes little sense.

So, even though I am doing my best to move towards a simplified portfolio, I can't ignore the costs of doing so.

If I were to die tomorrow, and none of us knows when our time will be up, I seem to remember Paul of Tarsus saying that, it would make no sense for me to incur those types of taxes, because my son would lose the step up in basis benefits.
The market goes up, the market goes down.

User avatar
goodenyou
Posts: 2074
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: How many of you invest in individual stocks?

Post by goodenyou » Mon Mar 30, 2015 2:30 pm

The only publicly-traded stock I have and held was Altria (MO). I bought it when Former Fed Chairman Ben Bernanke disclosed he held it in 2004. He sold it and I bought it in 2009. It has done very well in the past 6 years. I also own some stock in a local/regional bank that has grown nicely over 10 years. It should be a take-out target in the next 5 years.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: How many of you invest in individual stocks?

Post by itstoomuch » Mon Mar 30, 2015 3:01 pm

sidebar
Sagenick48 wrote:I find these posts kinda frustrating for two reasons.

First, they ignore time. I started investing in individual stocks in 1974. That was before the first index fund existed.

Second, and this is tied to the first, it ignores tax implications. For example, the second of those 1974 investments, a total of $3k, today returns, in dividends, $3k annually. I would be looking at cap gains of at least 35% state and federal combined if I sold it. That makes little sense.

So, even though I am doing my best to move towards a simplified portfolio, I can't ignore the costs of doing so.

If I were to die tomorrow, and none of us knows when our time will be up, I seem to remember Paul of Tarsus saying that, it would make no sense for me to incur those types of taxes, because my son would lose the step up in basis benefits.
You said it first. :greedy
Imagine to my surprise when I looked into the ramifications of tax cuts of 2001 and 2002. Our tax projections indicated that we would be better off in trading accounts than 401k. There is two little quirks that I know about but many don't want to see. :oops:
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

Exterous
Posts: 242
Joined: Mon Feb 20, 2012 1:34 pm

Re: How many of you invest in individual stocks?

Post by Exterous » Tue Mar 31, 2015 8:50 am

Its actually how I got involved in investing. Prior to 2008 I just put a small amount of money into the company 401k. I was in my early 20s so I wasn't paying much attention but I knew enough to know that 2008 was likely a great opportunity for me. I drastically cut back on my spending to allow me to invest more, picked up some books about stock picking and got started. One line really resonated with me: Pick what you know - which happened to be technology. Over the next couple of years I picked up positions in apple, google, armh, and oracle among others. As the market recovered my buying slowed as it was harder and harder to find the 'good deals'. I tried dabbling in other areas but due to my ignorance\bad luck\inability to time my successes were limited. I realized that it was a happy confluence of events that allowed me to do well in 2008-2010 but one that was unlikely to continue. So in late 2010 I made the switch to index investing. I still occasionally look at stocks but the last time I spent more than $300 on stocks was Intel in late 2012 when it went below $20 a share.
nisiprius wrote:P.S. Anyone who takes financials risks for fun, or for the thrill, or for entertainment needs at least to consider how much fun they are getting per dollar spent and whether they wouldn't get more fun per dollar in some other way. (I tend to think that the word "fun" is often a bit of a euphemism--that people who risk money "for fun" are like people who smoke cigarettes "for the taste.")
I think 'fun money' can be more than just the entertainment value of the money. I have a small account (~$1500) that I call my 'fun money' but, for me, it also serves as a continual reminder. Visions of my past successes often try to cloud my judgement so I use this account when I think I know something. Not only do I find that fun but it also relieves the urge to take a much larger position. Perhaps most importantly I inevitably get the reminder that I am not as smart as I think I am (See: My purchase of ADR @ $63 in Feb) which is something I don't get from spending it another way.

oragne lovre
Posts: 486
Joined: Tue Nov 25, 2008 3:34 pm

Re: How many of you invest in individual stocks?

Post by oragne lovre » Tue Mar 31, 2015 9:42 am

I do have ONE share Tesla for fun.
nisiprius wrote: P.S. Anyone who takes financials risks for fun, or for the thrill, or for entertainment needs at least to consider how much fun they are getting per dollar spent and whether they wouldn't get more fun per dollar in some other way. (I tend to think that the word "fun" is often a bit of a euphemism--that people who risk money "for fun" are like people who smoke cigarettes "for the taste.")
Thanks for the reminder. I'd sell my one TSLA share when I feel the fun evaporates. I did once try cigarettes "for the taste" but quit since it tasted bad.
The finest, albeit the most difficult, of all human achievements is being reasonable.

DaftInvestor
Posts: 4842
Joined: Wed Feb 19, 2014 10:11 am

Re: How many of you invest in individual stocks?

Post by DaftInvestor » Tue Mar 31, 2015 12:29 pm

You should have a 4th option in the vote "my company stock only" for those of us that get RSUs, Options, ESPP, etc. and hold onto a portion of them for a period of time.

User avatar
steve roy
Posts: 1732
Joined: Thu May 13, 2010 5:16 pm

Re: How many of you invest in individual stocks?

Post by steve roy » Tue Mar 31, 2015 12:35 pm

Did. Don't now.

The Mrs. DOES have individual stocks. She's owned a chunk of Disney stock for years and years, and plans on continuing to own it.

Me, I bailed out of individual stocks in mid-2008, when I detected a tidal wave on the horizon. Haven't owned anything but mutual funds since.

Rl2
Posts: 36
Joined: Sat Jan 11, 2014 10:01 pm

Re: How many of you invest in individual stocks?

Post by Rl2 » Tue Mar 31, 2015 1:17 pm

I've got some BRK.B that I bought in my pre-bogleheads days, and I see no reason to pay capital gains to unload it. Thanks to reading this thread I learned I can get a discount on insurance from Geico as a shareholder.

Dulocracy
Posts: 2303
Joined: Wed Feb 27, 2013 1:03 pm
Location: Atlanta, GA

Re: How many of you invest in individual stocks?

Post by Dulocracy » Tue Mar 31, 2015 2:52 pm

After a time, I was able to become 100% fund invested. An interesting poll would be who has 100% boglehead funds. I still have a South American fund (FLATX) with over 1% in fees, but I refuse to walk away at the bottom of that market (oil plays a big impact). I would be taking a 40% loss, which I just cannot do. So the fund sits there and reminds me to stay the course with my other funds. Before you get too worried about it, the fund is a very small part of my overall portfolio, having about $5000 or so in it from pre-boglehead days.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

User avatar
Taylor Larimore
Advisory Board
Posts: 28949
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: How many of you invest in individual stocks?

Post by Taylor Larimore » Tue Mar 31, 2015 3:10 pm

Dulocracy wrote:After a time, I was able to become 100% fund invested. An interesting poll would be who has 100% boglehead funds. I still have a South American fund (FLATX) with over 1% in fees, but I refuse to walk away at the bottom of that market (oil plays a big impact). I would be taking a 40% loss, which I just cannot do. So the fund sits there and reminds me to stay the course with my other funds. Before you get too worried about it, the fund is a very small part of my overall portfolio, having about $5000 or so in it from pre-boglehead days.
Dulocracy:

Never hold a security you would not buy today (after considering costs and taxes). This is because it is the same as buying what you own if you continue to hold.

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

Nowizard
Posts: 2428
Joined: Tue Oct 23, 2007 5:33 pm

Re: How many of you invest in individual stocks?

Post by Nowizard » Tue Mar 31, 2015 3:17 pm

We do under specific circumstances such as have existed in the past several years. Knowing we will not have to cash in stocks if the market changes helps since we can hold on or sell immediately depending on circumstances. We invest in dividend stocks and those where "We know more than the market :happy." We also invest in funds under special circumstances. For example, we have recently invested in an energy fund index.

Tim

User avatar
abuss368
Posts: 17049
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: How many of you invest in individual stocks?

Post by abuss368 » Tue Mar 31, 2015 5:39 pm

We do not own any individual stocks since 2008 and we plan to stay the course with our low cost and diversified Vanguard portfolio. In fact, it has been the best financial decision we ever made.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

GoFish
Posts: 206
Joined: Tue Mar 31, 2015 7:48 pm

Re: How many of you invest in individual stocks?

Post by GoFish » Tue Mar 31, 2015 8:15 pm

Not today, but I will soon have 40% of my portfolio in individual US stocks. :shock:

I am selling my shares in my company to our ESOP. To avoid a big 2015 tax bill on the gains (very low cost basis), I am doing a 1042 rollover. The new stocks will be qualifying replacement property with a total cost basis equal to my present basis.

I don't want to be so heavily invested in individual stocks, but I figure to lose over 20% from the start if I cash out and reinvest in funds (they don't qualify as QRP).

At least this way I have an opportunity to manage the tax situation and recognize the gains after my income drops in retirement.

Jim

User avatar
siamond
Posts: 5130
Joined: Mon May 28, 2012 5:50 am

Re: How many of you invest in individual stocks?

Post by siamond » Tue Mar 31, 2015 9:45 pm

I still have one individual stock position. This started as a 'fun money' bet in 2009, and now I'm kind of stuck with it, I never found a good way to transition out of it without paying significant taxes. Actually, this year is the first one where I would not have too much of a tax impact if I were to finally get rid of it, but... I still have my 'fun money' eagerness to prove that my bet was correct, and well, we're not quite there, stupid stock did NOT grow faster than VTI, arumph. This being said, I am clear in my mind, once I do get rid of it (to my satisfaction or not), it will be funds only. I totally lost the urge to play with 'fun money', it's just too much of a fool's game.

linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: How many of you invest in individual stocks?

Post by linenfort » Wed Apr 01, 2015 9:35 am

siamond wrote:I still have one individual stock position. This started as a 'fun money' bet in 2009, and now I'm kind of stuck with it, I never found a good way to transition out of it without paying significant taxes.
Why not sell some shares every year?

archii
Posts: 132
Joined: Wed Aug 07, 2013 8:33 am

Re: How many of you invest in individual stocks?

Post by archii » Wed Apr 01, 2015 10:01 am

Inherited a significant number of stocks that total over 1.2M. It is part of a larger portfolio, and all taken together it is well diversified. I like individual stock holdings. No fees. However, in the long term you have to watch these holdings carefully - companies do falter or go away, whereas an index fund will always be there.

User avatar
Runalong
Posts: 138
Joined: Mon Jun 13, 2011 5:22 pm

Re: How many of you invest in individual stocks?

Post by Runalong » Wed Apr 01, 2015 12:40 pm

About 40% of my portfolio is in individual stocks that I trade relatively frequently.

I know, I'm a heretic, but I do advise everyone else to follow the Boglehead's philosophy.

I enjoy the research. If you don't, it wouldn't be worth it. I could do it in 3-4 hours/week but I probably put in twice that just because it's a more interesting way to spend an evening hour than watching TV.

I seem to be able to trade less emotionally than most. I'm more Mr Spock than Captain Kirk when it comes to investing. If you can't be a cold fish about money, it doesn't matter how smart you are, you will make timing errors that will negate your other advantages.

I took some big losses in 08-09, was able to shrug them off and stay the course. I did a little worse than if I was indexed, but I do better than the indexes the majority of time, when stocks are going up, and I'm a LOT better diversified now than I was then (almost 100% equities then).

I have consistently done well and I am doing well with this and I enjoy it.

Current holdings include TA, NICE, HTLF, NDEKY, STX, GM, FLWS, BX, TRV, ICLR, SNE

"Permanent" holdings are AAPL and BRK-B.

User avatar
siamond
Posts: 5130
Joined: Mon May 28, 2012 5:50 am

Re: How many of you invest in individual stocks?

Post by siamond » Wed Apr 01, 2015 1:36 pm

linenfort wrote:
siamond wrote:I still have one individual stock position. This started as a 'fun money' bet in 2009, and now I'm kind of stuck with it, I never found a good way to transition out of it without paying significant taxes.
Why not sell some shares every year?
I was waiting to be in a much lower tax bracket (full year of early retirement), which is this year. Plus I guess that I am still a bit stuck on the idea that my bet was correct! Hey, this is the last individual stock I'll play with... But yes, for sure, your suggestion is the proper way to do it.

SGM
Posts: 3062
Joined: Wed Mar 23, 2011 4:46 am

Re: How many of you invest in individual stocks?

Post by SGM » Wed Apr 01, 2015 2:00 pm

I have several large holdings from my dividend reinvesting plan days. I have accumulated large capital gains so I continue to hold a significant amount. However, generally any new money, sales and many dividends have gone into index funds. The cost of holding individual stocks passively is zero but of course one cannot get the diversity of TSM etc. I continue to sell a little each year. I also have an eye for simplification for various reasons, so I may accelerate sales of individual stocks.

linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: How many of you invest in individual stocks?

Post by linenfort » Wed Apr 01, 2015 9:02 pm

siamond wrote:
linenfort wrote:Why not sell some shares every year?
I was waiting to be in a much lower tax bracket (full year of early retirement), which is this year. Plus I guess that I am still a bit stuck on the idea that my bet was correct!
Congrats on the early retirement!

Dulocracy
Posts: 2303
Joined: Wed Feb 27, 2013 1:03 pm
Location: Atlanta, GA

Re: How many of you invest in individual stocks?

Post by Dulocracy » Thu Apr 02, 2015 11:48 am

Taylor Larimore wrote:
Dulocracy wrote:After a time, I was able to become 100% fund invested. An interesting poll would be who has 100% boglehead funds. I still have a South American fund (FLATX) with over 1% in fees, but I refuse to walk away at the bottom of that market (oil plays a big impact). I would be taking a 40% loss, which I just cannot do. So the fund sits there and reminds me to stay the course with my other funds. Before you get too worried about it, the fund is a very small part of my overall portfolio, having about $5000 or so in it from pre-boglehead days.
Dulocracy:

Never hold a security you would not buy today (after considering costs and taxes). This is because it is the same as buying what you own if you continue to hold.

Best wishes.
Taylor

Very true! At least this is one of the reasons that I know that in a down market I will not sell. I can not bring myself to sell a fund that is down. My wife and I discussed it, and as it is only valued at around $5,000, we are leaving it there until it comes back around (at least closer in value). In my otherwise logical and un-emotional investing life, this, the last of my pre-boglehead assets, has been my Achilles heel.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

Post Reply