Individual Stocks

[lucasrd]

Does anyone invest in individual stocks? If so, what is in your portfolio?

[disneysteve]

I have a few individual stocks, all things I've owned for years. I no longer invest in individual stocks. I think mutual funds or ETFs are the way to go for the long term for most investors. Since I invest money every month, individual stocks just aren't practical due to transaction costs.

[rennigade]

I'm not giving any advice here, I'm new to the stock market. I recently purchased DKAM. It was the first stock I ever purchased and its almost up 100%. It's now up to 2.40 per share. I'm not one who is going to spend $50 per share. I buy cheap and hope they go up for a profit. Stock are very risky, that is why I don't spend much on them. I only have 100 shares of dkam.

It's like they say, don't invest more than you're willing to lose.

[disneysteve]

Originally Posted by rennigade

It's now up to 2.40 per share. I'm not one who is going to spend $50 per share. I buy cheap and hope they go up for a profit. Stock are very risky, that is why I don't spend much on them.

Keep in mind that the price of a stock has little to do with it's value. Stock prices are manipulated in a number of ways, all perfectly legal. That said, however, penny stocks, which is what you are talking about rennigade, are generally the very riskiest. So if you are trying to reduce risk, buying penny stocks is just the opposite of what you want to do. It is far safer to buy stocks of well-established companies with good track records. Think of it this way. You could buy a $1 stock and hope it doubles, which would be a 100% return. You will have made a profit of $1. Or you could buy a $50 dollar stock and hope it goes up $1, which would be a 2% return. You will have made a profit of $1. Which way do you think is safer and far more likely to occur?

[rennigade]

I couldn't agree more. Penny stocks are very risky. I basically had a few bucks to blow and got lucky. I just wanted to get a feel for the whole buying and selling of stocks. I'm on the much more conservative side. 401 with my company matching 5%. I also just opened a Roth with vanguard, vtivx.

[Ima saver]

I do have a few individual stocks, but since I bought most of them around 1999, I have lost money on them. I have cisco, emc, qualcomm, qlogic which have all gone down. I also have things like walmart, home depot, johnson and johnson and wendy's.
I have to agree that sticking with mutual funds seems to be the best thing.

[PRICEPLUS]

I have a few individual stocks and they are in companies that I am quite familiar with.

I buy one stock, that of my employer. They have a match on my purchase so I buy enough to get that and then sell it. There's only a small transaction fee on the sell (none on the buy) and it's a big company so it's usually sold for just about what I paid for it (no tax implications).

As for day to day investing sure, I'd love to but not until my Roth is maxed and I've run out of mutual funds to invest in.

[lucasrd]

My Portfolio Consists of:

TM - Toyota Motors
COP - Conoco Phillips
WMT - Walmart
LOW - Lowes
BAC - Bank of America
HAL - Haliburton

I am looking at taking positions in the following, but still doing research on them:

GS - Glodman Sachs
BBY - Best Buy
CSCO - Cisco
PG - Procter & Gamble
GE - General Electric

[Fern]

No, i invest in mutual funds as a buy-and-hold investor. Unless you have the time and enjoy tracking/monitoring your holdings, you'd do as well in mutual funds.

I could see spending a few thousand on individual stocks as a hobby, but i wouldn't put serious money into it. I've worked too hard to earn it; wouldn't want to lose it in an instant.

[Duchesse]

I agree with most of you here, investing in stock is risky business but, if you plan on making any money you have to be willing to accept some risk. I think individual stock should be part of a diversified portfolio. Ownership of individual stock requires time most people may not have. ETF's are a good thing in that they trade like stocks but expose you to many. Unlike mutual funds you can buy and sell them when you please. ETF don't move as fast as individual stock , whether up or down. Mutual funds have been known to lose money too. There are only a few investments out there that don't incur risk. (MM, CD, Gov't Bonds).

You have to decide, it's your money and your future.

[disneysteve]

Originally Posted by Duchesse

if you plan on making any money you have to be willing to accept some risk.

I think individual stock should be part of a diversified portfolio.

ETF's are a good thing in that they trade like stocks but expose you to many. Unlike mutual funds you can buy and sell them when you please.

Mutual funds have been known to lose money too.

There are only a few investments out there that don't incur risk. (MM, CD, Gov't Bonds).

A few comments:
You are absolutely right about having to take some risk. Avoiding stocks entirely would make it difficult or impossible to stay ahead of inflation and ever have enough to retire.

I think it is fine to invest in some individual stocks (I do) but I don't think anyone needs to do so in order to have a well diversified portfolio. You can diversify far easier and cheaper with mutual funds or ETFs.

ETFs do offer some advantages over mutual funds - the ability to buy and sell anytime, the ability to better manage tax implications, etc. There are also disadvantages, particularly having to pay a commission each time you buy or sell shares.

And yes, mutual funds, ETFs, stocks can all gain or lose money over time.

As for investments that "don't incur risk", there are none. ALL investments carry some type of risk. There are different kinds of risk. Most people think of investment risk - the chance that your investment will lose principal value. But there is also inflation risk. If you keep your money under your mattress or in a low-yield account, you run the risk of the value of your money eroding over time after inflation and taxes. A 5% return doesn't amount to much if inflation is 3% and you owe taxes on 20% of that 5% return. You'd end up with a true return of about 1%. That's why getting involved with stocks is so important for the long term.

[JBinKC]

I have all individual stocks in my Roth IRA. I have 53 stocks in it.


My largest overall holding is cash.

My top 5 stock holdings is Heritage Oil (HRTIF), Blue Pearl Mining (BLEFF), Creditcorp (BAP), Caspian Energy (CEKFF), and Dynatec (DYTCF).

[Duchesse]

Hey Steve, good call. I forgot all about that. So true, most people don't think about "inflation risk" most are just happy to say they made "something."


Yes I have positions in about 40 stocks. MY top ten holdings XOM, JNJ, WAG, FO, MA,GE,PFE, INTC, MSFT, MO. I buy SPY, DIA, QQQQ, in my IRA. I'm thinking of adding some international and emerging market exposure using ETF and or index funds.

[disneysteve]

Originally Posted by JBinKC

My largest overall holding is cash.

What do you mean by this? Are you saying you have more money in cash than in stocks? And are you referring to just your IRA or all of your assets overall?

Just curious why you would keep the majority of your money in cash, though I don't know how old you are. I'm 42 and right now we've got 72% of our portfolio in stocks, 28% in cash/bonds.

[Ima saver]

I keep about 50% in cash.

[JBinKC]

I have roughly 23% of my portfolio in cash and 77% in 53 stocks in my Roth. Of those stocks I almost have very close to 10% of assets in my largest stock holding Heritage Oil (a Canadian firm btw).

I am also going to get hold of my 401K assets soon since I left the company in November to pursue personal interests.

[disneysteve]

Originally Posted by JBinKC

I have roughly 23% of my portfolio in cash and 77% in 53 stocks in my Roth.

I understand. You meant you have more in cash than in any single stock, not in your combined stock holdings.

[frugal saver]

One thing I didn't see commented on are the DRIP Direct Re-Investment Programs that a number of companies have. I've invested in WalMart and Home Depot that way, and it can be a real money saver in terms of fees. I paid no fees to buy the stock, or to buy additional shares.
If you don't already have a relationship with a brokerage, it can be something to consider.

[mbell97]

I agree with frugal saver, I do the exact same thing. I own a lot of REITS and just reinvest all the div. I also own KO, MDU, CHG, PNM and OHI. I really enjoy watching them grow for basically zero cost to me. I hope to retire one day and live off of my div. I am only 27 and been investing for in these stocks for 8 years. I keep hearing REITS are going to fall but they haven't they just keep paying 4%-8% div. along with a little growth.