Individual Stocks/Investments
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With the imminent demise of FatWallet.com, and the loss of the investment thread thereat, I thought I’d try restarting the investment thread here.
For those who are just starting out, I cannot recommend the bogleheads.org wiki enough. It provides an excellent education in why a simple three or four fund portfolio is the most efficient way to accumulate wealth. I do not know if I would have done better following such an approach, but I am perfectly comfortable migrating to it as I become older, wiser, and am substantially richer than I was.
Do what you are always reading about in the trashy financial magazines and websites. Max out on those 401(k) contributions if at all possible. Max out on your Roth IRA whether through “back door conversions” or direct contributions. And, if possible, take a portion of your take-home pay and invest it in a broad index such as SCHB or VTI, every paycheck. If you must buy individual stocks, I recommend checking out a good newsletter (I have always liked the Fool Advisor) so you at least have the benefit of someone’s deep thinking. If it meshes with your own, make the investment with a bit more confidence than you might otherwise have done.
My investments as of today total $2.7 million. About half of that is in retirement accounts. About $200,000 is in 529 accounts, and the rest are in non-sheltered accounts. I have sold calls on most of my apple position, so come the end of January I will be a lot lighter on tech, and a lot more diversified. Though, there is a lot of time between then and now, so who knows how I will be positioned.
ETA: (At the request of someone, I am pasting my introductory post from Slickdeals here:
I’ve been a member of the FatWallet community for a long time, and one of the most popular threads, though not necessarily the most useful, was the Individual Stock Discussion thread. I figured, it couldn’t hurt to start one here.Keep in mind that some people buy and sell a lot of stocks while others invest for the long term.
Some people do no research and others do lots of research.
Some people have good luck, and some people have bad luck.
Some people can afford to take a lot of risk while others cannot.
Some people lie about their investments; some post only their successes.All of this is a warning to you – nobody cares more about your money than you do (with the possible exception of a financial advisor, who may want to take your money and therefore cares a great deal about it).
The vast majority of my investments are in very low cost ETFs, but I currently have a handful of individual stocks that I am invested in.
Apple 3.3% of my portfolio. (With options to sell most of it come January, at 155)
Googl 1.7%
MA: 0.8%
NYT: 0.3%
ROL: 0.3%
TMUS: 0.3%I am happy to share my entire portfolio, and occasionally do so. I’ve been investing for a long time and have no idea how I am doing in comparison to how I would have done had I kept it simple and invested in a broad index fund and simply added to it as the years rolled by. What I do know is that for many years the returns in my 401(k) were essentially zero. That had something to do with market crashes. But my individual portfolio did much better. So, I THINK I’ve done better than I would have had I stayed with fund investments, but it is by no means a scientifically arrived at conclusion.
During the financial crisis, I made a lot of money by investing when others were selling. I recall promising myself that I would be more careful with my money once the markets recovered. For the most part, I ignored my promise, or at least delayed its implementation. This year, I changed my asset allocation so that I am investing nearly 20% of my portfolio in fixed income (5.5% of which is earning 7% under NYC teacher’s fixed income fund). Previously, I was essentially 100% invested in equities.
Additional advice to people interested in growing a nest egg is to head on over to bogleheads.org and review their investment wiki. It is very well done and may convince you to forgo individual stock picks altogether. If you need the thrill of stock picking, then I also suggest heading over to Fool.com and trying out their Stock Advisor service. You can try it and cancel for a refund, particularly if your portfolio is under $10,000 (I would not pay a penny in fees with such a small portfolio).)
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Hey David! Good to see another place to talk and bounce ideas.
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@david-scubadiver Hi David – a little OT but I’ve always wanted to ask, are you the same Scubadiver who was active in the old Motley Fool forums? I was active there in the last century and learned a lot about early retirement before MF started charging. That led to a great exodus and I ended up on FWF, maybe you too?
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@uncamikey Yep, same David Scubadiver as at Fool.com! I subscribe, now and again, to their fool advisor newsletter, but less and less.
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@uncamikey said in Individual Stocks/Investments:
@david-scubadiver Hi David – a little OT but I’ve always wanted to ask, are you the same Scubadiver who was active in the old Motley Fool forums? I was active there in the last century and learned a lot about early retirement before MF started charging. That led to a great exodus and I ended up on FWF, maybe you too?
Ha! I remember using MF before they started charging. I was in grad school, and was only allowed to work 10 hours a week for $10.50 an hour. I had more debt than I could bear to think about, was eating a potato with butter for every meal for weeks at a time, and had a credit score in the 500s. I was bummed that they started charging because I couldn’t afford to pay and was desperate to improve my finances. I loved it up until then… great humor and great advice.
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David Scubadiver, great to see you. I was hoping that you’d show up!
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By the way, they don’t charge over at fool.com to join their discussion boards. http://boards.fool.com/
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@fivetalents said in Individual Stocks/Investments:
… I was bummed that they started charging because I couldn’t afford to pay and was desperate to improve my finances. I loved it up until then… great humor and great advice.Besides the investment/financial forums, MF had some great discussions about art, politics, and religion. It was a lot of fun.
And @david-scubadiver, I went back to MF a few years ago after it was free again but it just didn’t seem the same. Either they had changed, or I had.
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Glad to see you brought this over. I have followed that thread on FWF for quite a while and it seems you never abandoned it. Good on ya, and welcome aboard.
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@uncamikey said in Individual Stocks/Investments:
@fivetalents said in Individual Stocks/Investments:
… I was bummed that they started charging because I couldn’t afford to pay and was desperate to improve my finances. I loved it up until then… great humor and great advice.Besides the investment/financial forums, MF had some great discussions about art, politics, and religion. It was a lot of fun.
And @david-scubadiver, I went back to MF a few years ago after it was free again but it just didn’t seem the same. Either they had changed, or I had.
Thanks, I didn’t know about any of their their forums before this thread. I too checked it out when it became free again and also found it wasn’t what it used to be so I left/forgot about it.
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Good that … we got another forum to be in connect.
Thanks david for creating… only issue with this forum is I cannot use that from 9 to 5pm while inside office
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@anusha123 it works well on mobile.
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@jaytrader Yes…but sometime i prefer seeing them in monitor but firewall blocking…
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@anusha123 I understand. But mobile is better than nothing huh!
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@anusha123 said in Individual Stocks/Investments:
@jaytrader Yes…but sometime i prefer seeing them in monitor but firewall blocking…
If you’re only blocked and not monitored, there’s always the possibility of proxies…
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Moved some cash from VTI and I loaded AMD , AMZN, ADBE and APPL
Still VTI is major holding… I just loaded this for
Bounce play…
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@David-Scubadiver I really liked your OP in the new thread at SD but I’m not a fan of their site and community… can you combine what you said in both OPs here?
In that light, did you ever share how old you are? (if you don’t mind me asking). I’m not sure if you’ve said it in the past but it could put some of your posts into context.
PS - This was one of my favorite threads at FWF (when rationale for trades was shared too)… so thanks for bringing it here.
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Great Thread. 1 GREEN from me
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@diffeldoof said in Individual Stocks/Investments:
@David-Scubadiver I really liked your OP in the new thread at SD but I’m not a fan of their site and community… can you combine what you said in both OPs here?
In that light, did you ever share how old you are? (if you don’t mind me asking). I’m not sure if you’ve said it in the past but it could put some of your posts into context.
PS - This was one of my favorite threads at FWF (when rationale for trades was shared too)… so thanks for bringing it here.
I just added the SD post to the OP here. I am nearing 50 years old, with a wife and two young kids. I have had the benefit of high income, allowing me to take substantial risks in the markets, and this has helped me build up a very nice portfolio over the years.
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So, I am taking a stab at using a roboadvisor. Actually, trying out several. The two that seem most promising to me are Schwab Intelligent Porfolio and Wisebanyan. The main drivers for my potential move are that I want an inexpensive way for my spouse to manage the money (allocate investments) should I decide to die before I kill her and also to take advantage of automatic tax loss harvesting.
If I like the service it might just encourage me to sell my individual stocks. I’ll likely start a new thread on this if I have anything useful to say after my experiment.
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@David-Scubadiver Please do! I’d definitely be interested in hearing your thoughts/experiences.
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@David-Scubadiver Nice avatar!
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@mikk1 said in Individual Stocks/Investments:
@David-Scubadiver Please do! I’d definitely be interested in hearing your thoughts/experiences.
I’ve finally funded at Schwab Intelligent Portfolio, Wisebanyan and Wealthfront. Wisebanyan is the least expensive and generates a portfolio that is pretty close to where I’d come out on. My only hesitancy with them is their longevity as well as the fact that they use e-mail to communicate rather than requiring you to log in and view/respond to a “secure message” like very other financial account I’ve had for the past ten years.
With a 68/32 split of stocks/fixed income, Wisebanyan invested me as follows, at an expense ratio of .09%
VTI 40.5%
VEA 21.9%
VWO 5.1%LQD 8.5%
VCSH 3.2%
SJNK 3.1%
VGIT 7.6%
TIP 6.1%
VNQ 3%Wealthfront invested me in the following at an expense ratio of 0.08%
VTI 35% (US Stocks)
VEA 26% (Foreign Stocks)
VWO 22% (Emerging Markets)
VIG 7% (Dividend Growth)
VTEB 5% (Municipal Bonds)
XLE 5% (Natural Resources)
But you have to tag on their .25% management fee, bringing it up to 0.33%Schwab invested me in a plethora of funds at an expense ratio of 0.21%
Stocks (77.42%)
FNDX : SCHWAB FUNDAMENTAL US LARGE CO ETF 15.02%
SCHX : SCHWAB US LARGE CAP ETF 11.33%
FNDF : SCHWAB FUNDAMENTAL INL LARGE COM ETF 10.05%
FNDA : SCHWAB FUNDAMENTAL US SMALL COM ETF 7.76%
SCHF : SCHWAB INTERNATIONAL EQUITY ETF 7.11%
SCHA : SCHWAB US SMALL CAP ETF 5.10%
FNDE : SCHWAB FUNDA EMG MKTS LARGE COM ETF 5.07%
FNDC : SCHWAB FUNDAMENTAL INTL SMAL COM ETF 4.78%
SCHC : SCHWAB INTERNATNAL SMALLCAP EQY ETF 3.14%
SCHH : CHARLES SCHWAB US REIT ETF 3.09%
SCHE : SCHWAB EMERGING MARKETS EQUITY ETF 2.73%
VNQI : VANGUARD GLBAL EX US REAL ESTATE ETF 2.24%
Fixed Income (10.7%)
EMLC : VANECK VECTORS J P MORGAN EMERGING MKTS LOCCURRENCY BD ETF 5.95%
SHYG : ISHARES HIGH YIELD CORPORAT BOND ETF 4.75%
Commodities (4.74%)
IAU : ISHARES GOLD ETF 4.74%
Cash (7.14%)
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Thanks for sharing, @David-Scubadiver!
Now I’m going to spend a few hours translating/researching…but this is good stuff!
Surprising about Wisebanyan communications in plain email, I wouldn’t be comfortable with that either.
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Tell me a little about what you have (i.e., how large a portfolio you are looking to invest, and how much is in an IRA vs. taxable account), either here or in a private message, and I will give you some input based on what I know. The other big player in the space is Betterment, and while I did not open an account with them, I could see using them over wealthfront if only because they were first to the market and haven’t gone through so many changes as Wealthfront. [I didn’t know that when I was picking one to try, but learned about it since].
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Thanks @David-Scubadiver , will do - just have to pull it all together. Appreciate the offer and an impartial set of eyes.
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@david-scubadiver
We have invested in fixed assets in another place which are very difficult to liquidate. No stock investments. We have little bit in 401k, bank accounts and in Home equity. Is it too late to start investing in stock market in terms of age (40’s). We were too cautions. Though With good income and savings we could not make much out of our savings by being over cautions. That is kinda very disappointing when I look back.Thanks
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My best investment currently is MORL at a $15 cost basis I’m earning 20% plus monthly dividend yield. The dividends are paid out monthly but vary from month. Some months are very high and some months are low but over the year average out to 20% or so plus stock appreciation. My overall return is like 40% for the year. I only invest in stocks that pay dividends anything else is just gambling IMO.
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@ritholtz said in Individual Stocks/Investments:
@david-scubadiver
We have invested in fixed assets in another place which are very difficult to liquidate. No stock investments. We have little bit in 401k, bank accounts and in Home equity. Is it too late to start investing in stock market in terms of age (40’s). We were too cautions. Though With good income and savings we could not make much out of our savings by being over cautions. That is kinda very disappointing when I look back.Thanks
If you consider that even those who are retired need to be invested in the market, and that people saving for retirement are in the market at age 30, 40 and 50, it is certainly not too late to be invested. A conservative approach is to own your age in bonds meanings at 40 you should own 40% bonds and 60% stocks. You can do that simply with two ETFs: BND and VTI. U
I’d make sure to contribute to Roth IRA every year if you don’t already have a traditional IRA, and add to the 401(k), especially if your employer matches.
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@deplorable-1 said in Individual Stocks/Investments:
My best investment currently is MORL at a $15 cost basis I’m earning 20% plus monthly dividend yield. The dividends are paid out monthly but vary from month. Some months are very high and some months are low but over the year average out to 20% or so plus stock appreciation. My overall return is like 40% for the year. I only invest in stocks that pay dividends anything else is just gambling IMO.
2x leveraged funds aren’t a “stock” in the traditional sense. And they can’t be held long term safely. So be car full with that one. It can mov, and fast, in the other direction. If it is a major part of your portfolio consider selling it and counting your blessings.
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Any thoughts on AT&T;s big drop. I added some more to my existing position at 34.5 and it dropped further. Just wonder when the free fall will stop. The dividend certainly looks attractive.
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I think it’s a YMMV, I bought both QLD and DDM in March of 2009 and both have been up and continuing to go up. 8 years should be long term enough so it really depends on the price you buy at and when you buy which is more important. However, I woudn’t buy at todays prices.
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Go Tesla Go!
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@padma said in Individual Stocks/Investments:
Any thoughts on AT&T;s big drop. I added some more to my existing position at 34.5 and it dropped further. Just wonder when the free fall will stop. The dividend certainly looks attractive.
A couple of months ago, someone suggested that investing in AT&T because of the dividend was a safe bet. I said that I saw plenty of room for the stock to drop more than 5%. I have not been following the stock and have no idea if it has dropped more than 5%, but the fact of the matter is that any stock you own can drop 50% easily and that should be a barometer for how much you can invest. No stock should represent more than 5% of your holdings, but regardless, if you can’t comfortably lose 50% of your investment in an individual stock you should cut the amount invested down to an amount where 50% won’t make your uncomfortable.
If you believe the stock is beaten down unfairly, then buy more. But don’t believe for a second that it “has to move” in any particular direction. It doesn’t. You can’t even say “probably.” That is why the smart money owns the market through low cost ETFs and why you should only have 5-20% of your assets invested elsewhere.
The easiest way to own individual stocks is to own a lot of them to diversify risk, and the easiest way to do that is where you can buy fractional shares and take your 5-20% money and pour it into 15-20 stocks of your choosing and see how it all goes. I am currently doing that with M1 Finance, and find it very helpful.
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I picked up some GE yesterday morning figuring it might bounce back. I was right. It dropped another 2.75% after I acquired it.
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Anyone look into TQQQ? Performance looks good over last 5 years (usual caveat that past performance does not indicate future performance):
Return TQQQ
YTD 104.28%
1-Month 13.74%
3-Month 18.21%
1-Year 111.89%
3-Year 41.27%
5-Year 59.01%
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Haven’t looked into it because the risk is higher than QLD which is 2x leveraged, so not even sure how the performance compares.
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Looks like the activity on this forum is much lesser than the fatwallet forum. What other forums do you all use?
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@padma said in Individual Stocks/Investments:
Looks like the activity on this forum is much lesser than the fatwallet forum. What other forums do you all use?
I also check in at Fragile Deal, but it’s not too busy there either.
Reddit Personal Finance is extremely busy, a little too much, so I don’t actively check in often. It’s OK to keep on the back burner though.
FWF was unique, wasn’t it?
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i miss FWF. Also sad this is dead.
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TQQQ has gone up about 500% since you posted this 3 years ago.
