 |
In defense of indexing and single-stock risk
02-23-2007, 11:18 AM
|
#1
|
|
Recycles dryer sheets
Join Date: Jun 2005
Posts: 288
|
In defense of indexing and single-stock risk
Some time ago I was 'invested' in novastar financial, NFI, because of the nice dividend yield. I got scared out and moved 100% to indexing because I couldn't stand the emotional roller-coaster.
Looks like I made a wise decision - look what NFI has done in the last few days:
http://finance.yahoo.com/charts#char...urce=undefined
I got out at an adjusted price of around $31, now the stock is at $8 and change.
Phew that was a close call !!
- John
|
|
|
 |
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:22 AM
|
#2
|
|
Administrator
Join Date: Jan 2007
Location: New Orleans
Posts: 24,604
|
Re: In defense of indexing and single-stock risk
OMG, that sure looks like a good call on your part!!!
Welcome back to the fold (those old, boring index funds that we all love)
__________________
"Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harborless immensities." - - H. Melville, 1851
|
|
|
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:27 AM
|
#3
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 6,662
|
Re: In defense of indexing and single-stock risk
Yeah, owning a few tech stocks through a couple of wild rollercoasters 1996 - 2000 was enough to cure me of wanting to hold individual issues.
Audrey
__________________
Life After FIRE - we redesign it every 5 years!
|
|
|
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:30 AM
|
#4
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 13,855
|
Re: In defense of indexing and single-stock risk
If you have the time and inclination, you can do well picking stocks and bonds, but you have to spend the t ime and you have to know what you are doing. Otherwise, stick with funds.
I'm pretty sure I have commented here in the past that I wouldn't touch that piece of excrement with someone else's 10 ft. pole. Nice to be proven right once in a while.
__________________
"To be a man means that you are brave, loyal and true. When you are in the wrong, you own up and take your punishment. You don't take advantage of women. As a husband, you support and protect your wife and children. You are gracious in victory and a good sport in defeat. Your word is your bond. Your handshake is as good as your word... When the ship goes down, you put the women and children into the lifeboats and wave good-bye with a smile." C Murray
|
|
|
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:31 AM
|
#5
|
|
Recycles dryer sheets
Join Date: Jun 2005
Posts: 288
|
Re: In defense of indexing and single-stock risk
Yeah, I lost a bunch in the tech-wreck as well, watched my wife's rollover IRA drop from 100k to 30k.
Too bad I didn't learn the indexing/asset-allocation lesson back then! Oh well, better late than never. I lost something around 1.5 or 2k on NFI when all was said and done.
It's amazing reading the posts on the nfi message board at investorvillage.com - people that are still defending the company, the "you haven't lost unless you sell" crowd, and the "don't invest what you can't afford to lose" messages.
that last sentiment isn't investing, it's gambling.
- John
|
|
|
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:32 AM
|
#6
|
|
Recycles dryer sheets
Join Date: Jun 2005
Posts: 288
|
Re: In defense of indexing and single-stock risk
 Quote:
|
Originally Posted by brewer12345
If you have the time and inclination, you can do well picking stocks and bonds, but you have to spend the t ime and you have to know what you are doing. Otherwise, stick with funds.
I'm pretty sure I have commented here in the past that I wouldn't touch that piece of excrement with someone else's 10 ft. pole. Nice to be proven right once in a while.
|
Yes I remember that, when I brought up NFI quite some time ago. Good choice on your part !!
|
|
|
|
Re: In defense of indexing and single-stock risk
|
02-23-2007, 11:51 AM
|
#7
|
|
Moderator
Join Date: Oct 2005
Location: Texas
Posts: 13,430
|
Re: In defense of indexing and single-stock risk
Quote:
|
Originally Posted by brewer12345
If you have the time and inclination, you can do well picking stocks and bonds, but you have to spend the t ime and you have to know what you are doing. Otherwise, stick with funds.
|
Agreed. I don't even need to "beat the market" at this point to reach my goals. What I need is to minimize my chance of falling short.
I was fortunate enough to be putting 10-15% of my salary into 401K plans since I was 22. And I was fortunate to have it fully invested through the late '80s and all of the '90s when the market mostly performed very well. Now I just want to make sure I don't fritter that good fortune away. I think I can get 4-6% above inflation over time with my current asset mix, and that's enough to get me where I want to be by age 50 -- and with a lot less risk than picking individual stocks.
At this point, I don't need home runs -- just a lot of singles and doubles. Not swinging for the fences also means I'm less likely to strike out.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
|
| Thread Tools |
Search this Thread |
|
|
|
| Display Modes |
 Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
