Buying Ford

[disneysteve]

I don't see the appeal or any advantage to plowing money into a single company stock, Ford or otherwise. Why not put that money into a broad market fund like VTI?

[james.hendrickson]

I don't see the appeal or any advantage to plowing money into a single company stock, Ford or otherwise. Why not put that money into a broad market fund like VTI?

DisneySteve, we'll see. They may be paying a special dividend in March, which would be pretty sweet.

Also, isn't the S&P trading at around $600 bucks now? And plus, I thought about dollar costs averaging into the indexes, but didn't see a good way to do this with small amounts of money I've had access to using Schwab. For sure you can do it with Robinhood and some of other newer brokerages, but I couldn't see how to do this easily in Schwab.

[disneysteve]

DisneySteve, we'll see. They may be paying a special dividend in March, which would be pretty sweet.

Also, isn't the S&P trading at around $600 bucks now? And plus, I thought about dollar costs averaging into the indexes, but didn't see a good way to do this with small amounts of money I've had access to using Schwab. For sure you can do it with Robinhood and some of other newer brokerages, but I couldn't see how to do this easily in Schwab.

The Schwab Total Stock Market Index Fund. (SWTSX) has a $0 minimum investment. You could buy shares $5 or $10 at a time.

That's a far, far better investment vehicle than Ford stock.

[kork13]

James, you seem stuck on the share prices .... They don't matter much anymore, from a purchasing standpoint. You can buy shares based on almost any specified number of dollars, regardless of how many shares that dollar amount correlates to. Don't worry about the share price, only concern yourself with applying dollars IAW your plan.

Great example: 1 share of BRK (Berkshire Hathaway) has a share price of roughly $748,000/sh. Big whoop ... Over time, I've slowly been purchasing bits & pieces of BRK, literally just $25-$50 at a time. At present, I own roughly 0.0033sh of BRK (that's ⅓ of 1% of 1 share), purchased across probably 30-40 transactions & 7ish years.

Hopefully that helps to demonstrate how insignificant a share price is when you're purchasing? Just throw whatever dollars you've got, and you'll get however many fractional shares those dollars will buy.

[james.hendrickson]

James, you seem stuck on the share prices .... They don't matter much anymore, from a purchasing standpoint. You can buy shares based on almost any specified number of dollars, regardless of how many shares that dollar amount correlates to. Don't worry about the share price, only concern yourself with applying dollars IAW your plan.

Great example: 1 share of BRK (Berkshire Hathaway) has a share price of roughly $748,000/sh. Big whoop ... Over time, I've slowly been purchasing bits & pieces of BRK, literally just $25-$50 at a time. At present, I own roughly 0.0033sh of BRK (that's ⅓ of 1% of 1 share), purchased across probably 30-40 transactions & 7ish years.

Hopefully that helps to demonstrate how insignificant a share price is when you're purchasing? Just throw whatever dollars you've got, and you'll get however many fractional shares those dollars will buy.

Kork - lets talk about that. My sense is that the trends towards indexing and fractional share ownership may have caused public psychology about investing to change. Price still matters - and it matters a lot.

First, if you look at investing from a value investing standpoint - you want a price low relative to the intrinsic value of the company. This is increasing difficult, but a low price relative to earnings means an acquisition gives you greater margin of safety - prices ultimately follow earnings in the long run.

Second, price is a controllable factor. By this I mean you can choose to buy at a particular price or not. Thats a decision that is fully under the individual investors control - price action or the earnings of the company at a later date are less under your control.

Third, its not clear to me that fractional ownership has changed these two things. You're just buying less of a company at whatever the market price is. It doesn't change the desirability of a low price to earnings ratio of a particular investment. It just means you're buying fractional shares - that's it.

Fourth - I want to advance this idea to everyone on the forums. Indexing is fine from a return maximization and risk reduction perspective, but that's ALL its good for.

In my view, investors need to be concerned with things like morality and ethics when they make investing decisions. If you're solely in index funds you'll be holding Phillip Morris, which makes money from selling poison, and General Dynamics, which makes all kinds of heavy duty military equipment - and ultimately only makes money if there are wars to fight. Its moral blindness to ignore what companies do when you're making investing decisions.

Another reason I don't like indexing is because it has some weird second order effects. Briefly put, if everyone indexes, then it means that that company profits are controlled by company managers - NOT company owners. And managers will, in general, divert resources to themselves instead of reinvesting it in responsible growth. This is partially why the ratio between CEO and average company worker pay has gone haywire. Its because everyone is indexing, and there are no controlling owners around to prevent managers acting improperly.

[disneysteve]

Kork - lets talk about that. My sense is that the trends towards indexing and fractional share ownership may have caused public psychology about investing to change. Price still matters - and it matters a lot.

First, if you look at investing from a value investing standpoint - you want a price low relative to the intrinsic value of the company. This is increasing difficult, but a low price relative to earnings means an acquisition gives you greater margin of safety - prices ultimately follow earnings in the long run.

Second, price is a controllable factor. By this I mean you can choose to buy at a particular price or not. Thats a decision that is fully under the individual investors control - price action or the earnings of the company at a later date are less under your control.

Third, its not clear to me that fractional ownership has changed these two things. You're just buying less of a company at whatever the market price is. It doesn't change the desirability of a low price to earnings ratio of a particular investment. It just means you're buying fractional shares - that's it.

Fourth - I want to advance this idea to everyone on the forums. Indexing is fine from a return maximization and risk reduction perspective, but that's ALL its good for.

In my view, investors need to be concerned with things like morality and ethics when they make investing decisions. If you're solely in index funds you'll be holding Phillip Morris, which makes money from selling poison, and General Dynamics, which makes all kinds of heavy duty military equipment - and ultimately only makes money if there are wars to fight. Its moral blindness to ignore what companies do when you're making investing decisions.

Another reason I don't like indexing is because it has some weird second order effects. Briefly put, if everyone indexes, then it means that that company profits are controlled by company managers - NOT company owners. And managers will, in general, divert resources to themselves instead of reinvesting it in responsible growth. This is partially why the ratio between CEO and average company worker pay has gone haywire. Its because everyone is indexing, and there are no controlling owners around to prevent managers acting improperly.

James, you have some very unusual views on investing. You are free to believe what you wish but some of what you have said in this post and others simply isn't true.

Focusing just on share price is ridiculous. Are you saying that Berkshire hasn't been a good investment because the price is too high? That would be a truly insane stance. Now going forward without Buffet at the helm things might change, though I doubt it, but up until now, suggesting that it was a bad investment because the share price was high would have been utter nonsense.

Looking at any other stock, the same is true. Share price doesn't matter. What matters is the underlying value of the company. Share price is easily manipulated. All the company has to do is do a split or a reverse split if they want to raise or lower the share price. After the split, the company isn't worth a penny more or less than it was before the split even though the share price has changed significantly.

As to your point about moral and ethical investing, there's certainly some merit to that discussion. Investing in mutual funds or exchange traded funds does make it impossible to pick and choose which companies get your money. If that's the road you want to travel, just be sure to build yourself a well-diversified portfolio. Don't throw all of your money into Ford. Spread it out over multiple companies in multiple industries. And accept the fact that you will almost certainly under-perform the market over time. There are also numerous ESG funds out there where you can satisfy your moral stances and get the benefits that come from investing in a fund vs individual companies. You might want to look into those.

[LivingAlmostLarge]

I don't think schwab you can do fractional shares except as dividend reinvestment. You can't do it at fidelity either. But it doesn't matter. I just buy whatever is closest like today. I bought VOO for DK ESA. $2k worth for both kids. Like 3 shares each. I also bought VGT in my Roth IRA and VTI in DH's Roth IRA for 2026 contributions. Set and forget. The couple hundred bucks I'll wait and when I see I can buy another share I will of everything.

VOO in particular I find that I just keep buying. I'm trying to buy VTI since it's more diverse but I figure VOO isn't bad. That's our biggest position in our entire portfolio. Like really really big. I hope it's diverse enough. And it's been bought piecemeal. Consistently bought every year and every month or months, I just keep on buying. I get cash, i put into VOO however many or few shares I have.