Do it yourself Investing

[Nobulladvisor]

How many people here invest their serious money on their own?

[disneysteve]

How are you defining "on their own"? If you mean picking individual stocks, then no (though I do own a few). If you include mutual funds, then absolutely. I think most of the people on this board do it themselves.

[JoshuaHeckathorn]

Like Steve, I invest on my own, although I'm not a stock picker at all.

[Nobulladvisor]

How you guys make your desision on what to invest in?
Do you have a strategy?
Where do you learn?
How successful have you been?

[jpg7n16]

For my personal investing, I make my decisions, base my strategy on, and learn from these two books:

Amazon.com: The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) (9780060555665): Benjamin Graham, Jason Zweig, Warren E. Buffett: Books

Amazon.com: Security Analysis (Business and Economics, no volume) (9780070140653): Benjamin Graham, David L. Dodd, James Grant: Books

As well as this video: Warren Buffett - Speech to MBA Students on Vimeo

I'm still pretty young (26) and haven't been investing too long. From when I started seriously following what I believe about investing, about two years now, the DJIA is up 22%-ish and I'm up 26%-ish. But that's a small sample size. We'll see as time goes on!

[bjl584]

I do a bit of both.

I have a brokerage account. Some of what I invest in were picked by me. Some of them were recommended by my financial advisor.

My 401K is invested in funds that I selected.

[Nobulladvisor]

BJ584,
Does your financial advisor call you to sell you a stock?
or you call them and ask about the stock?

Also in your 401K. what basis do you use to pick the funds in your 401K?

[disneysteve]

As I said, I do all of my own investing. How do I pick investments? At this point, I'm not really doing any picking. Things are pretty much static as I've been at it for 20 years. I built the portfolio by deciding on an asset allocation and selecting funds for each segment. I read Money, Kiplinger, Smart Money, Barron's, various online sources, etc. The bulk of our money at this point is with Vanguard with various other money spread out in different spots. I have an online brokerage account in which I hold some individual stocks and occasionally do a little bit of trading.

I don't use any advisor in any way. I have never seen any need to pay for investment advice.

[Nobulladvisor]

Steve,

Did you have a bad experiance with an advisor? or you enjoy doing it yourself?

I agree. I dont see a need either.

[disneysteve]

Steve,

Did you have a bad experiance with an advisor? or you enjoy doing it yourself?

Nope. Never had an advisor. I've always done it myself. Honestly, I don't think it is all that hard for the average investor to do perfectly fine on his or her own. You don't need an MBA to put together a perfectly acceptable portfolio that doesn't require a ton of time to manage.

[ThePlantGuy]

I've been a do it yourselfer for close to 40 years. I'm a trader, not an investor. I don't think that buy and hold is a viable option these days. Everything happens much too fast .

[jpg7n16]

I've been a do it yourselfer for close to 40 years. I'm a trader, not an investor. I don't think that buy and hold is a viable option these days. Everything happens much too fast .

Congrats on being a successful trader for so long. You must be doing something right.

But I do think it's odd that a gardener wouldn't get the concept of buy and hold. Do you expect to plant a seed and have it fully grown in a matter of hours/days? No?? Then why do you expect every investment to be fully grown in a matter of hours/days?

I would think that someone like you would be able to understand that investments can take a longer time to harvest their full poential.

Maybe it's not what you do, and not what you need to do, but buy and hold is still a viable option. And it still works.


Trading is an entirely different animal. But just because trading works (for you) that doesn't mean that buy and hold won't work.

[photo]

I don't think that buy and hold is a viable option these days.

Are you talking about index mutual funds as well as individual stocks?

[snafu]

I had been operating investing a/c combination of individual stocks, Mutual Funds [MF] and Corporate Bonds since university but when banking/brokerage rules changed in 2001 and I was assigned an 'advisor.' I don't pay him a fee but he gets part of the Mutual Fund fee [MER]. He reviews my holdings twice a year [more on request] and makes recommendations which I can ignore if I wish. I've added Exchanged Traded Funds [ETF] in the past2 yrs. and I prefer to be in control of finances.

Nobulladvisor: Whether you do your own selection or have an advisor, it's important to begin with a plan you can live with, stick to for the long run and sleep at night. Many of us started with a simple low fee saving plan vehicle like Vanguard Index Mutual Fund, having bought the required opening sum and arranged a specific sum transfer each month which buys units based on that day's value. Shocking how that increases in value over time even though the stock market gyrates and dividends are reinvested. As income increases monthly sums devoted to investment portfolio increases. Bonuses, lottery wins, unexpected monies, extra project fees, overtime, tax rebates etc are all proportionately targeted to the building portfolio. When value reaches a pre determined target, it's appropriate to re-assign funds into a different market segments. You could choose a MF depending on how you see the economic picture. Since ETFs function more like stock, once you have the targeted sum, you can buy a Dividend ETF to add to your position, it's a matter of fees. Meanwhile if you use a product that's wonderful or feel a certain market segment is moving strongly, plan to buy the stock. Always buy a specific stock for a reason knowing the stop loss figure and a target sell price.

Retirement Plan: There are target retirement date MFs. A common personal control strategy is split between equity and savings depending on age, risk level and employment security. Once common was 100 minus age with the larger figure for equity, the smaller for bond type instruments. Within 5 years of retirement the figures are reversed with higher saving to equity ratio.

The magazines DS mentioned are excellent and available at your library.

[Petunia 100]

The vast majority of us are better off in index funds. Studies have shown that over time, 2/3 of all professional fund managers trail their index. You can be in the top 1/3 merely by choosing the index. There is no need to pay an advisor in order to buy and hold index funds.

If you are a good stock picker, then open a brokerage account and pick your own securities.