Stock Investing

[Badger]

I bought shares in a dozen or so stocks years ago in the Scottrade days and none since then. I only had a couple of stinkers in lower investments that I let go for tax deductions. The rest provide dividends each year that I used for income and let the original shares remain the same. Those stocks will be used as an inheritance since I don't need the money or additional taxes from capital gains. I don't trust my judgement anymore to pick stocks and have neither the skill, background, or need to play anymore. I think I got lucky once and don't need to risk trying again.
Other stocks are imbedded in my IRA with Wellington and Wellesley.

 

[target2019]

Right. That's my thinking. I don't want the agonizing challenge of which one to buy, when to sell it or hold, ugh. I like and want simplicity--market returns, minimal cost, tax efficient.

Your good with your tilts to SCHG, QQQ, etc.

 

[target2019]

Great points.

I own SCHG which is large cap growth and trades somewhat in line with QQQ. I also own VTI which also has a lot of large cap growth. Also currently have 27% of my portfolio in IWM as I want small cap representation.

Similar to what we do.

 

[target2019]

I checked and nearly everyone participating in this thread has been retired 5-10 years, myself included. Which begs the question - if you’ve already won the game - why are you still playing? I’ll answer first - it’s a “hobby”. Only about 10% of my investable assets are in a brokerage account in stocks. I’m selling some to fund my pre SS retirement. If I dabble in buying a new stock, I pay no more than $1000.

The vast majority of my money is in mostly index funds and CD’s.

I don't consider it "playing." I don't know if I've won a game either. That is a trite quote that says everything, and nothing.

I have 85% in core passive indexing and fixed income. 15% is in a brokerage dedicated to future generations. Everyone in the family has contributed to it.

There is some fun, learning, let-downs, and rewards.

 

[Flyfish1]

For many years when working I was essentially buy and hold index funds - that is once I woke up and fired my FA and therefore got out of high expense actively managed mutual funds. I would always keep a little on the side to " play with". Then beginning a couple of years before retirement I moved the majority of assets into a well diversified dividend portfolio. This includes stocks, CEF's, baby bonds, ETF dividend funds, etc.. We essentially live on that income and reinvest 25% of gross dividend income every month. That's the fun part is I'm always investing each month. I do miss the "play " account and may peel off a little to get my fix on active investing.

 

[CyclingInvestor]

100% individual dividend stocks since 1993. Retired 2006 at 48 when net dividend flow surpassed salary. Only (what I consider) top quality companies with a long history of good capital decisions. Infrequent trading when valuations between the stocks I follow get too far out of whack with each other. Sometimes years between trades.

I do not do it this way beause I think it will maximise returns, but because this is what makes me most comfortable.

 

[GravitySucks]

No, it more like 20-30 positions. not 60-100.

I vaguely remember my finance professor running through the math and showing how 30 stocks could represent the whole market with a 95%+ confidence.

 

[OldShooter]

I vaguely remember my finance professor running through the math and showing how 30 stocks could represent the whole market with a 95%+ confidence.

Interesting. Very non-intuitive for me. Even if you limit it to small/medium/large, admit only ten or twenty line of business sectors, and limit the portfolio to the US market the permutations seem to dictate a larger number.

But even at 30 stocks to select and monitor IMO that is a lot of work for an old retired investor. I guess it's OK if you enjoy it as a hobby. I did, years ago, and made quite a bit of money but probably would have made more with a Bogleheads approach. Water already over the dam.

 

[pb4uski]

I don't see much difference. For example, I could buy SCHD or buy the top 30 stocks in SCHD and in both cases buy/hold/set/forget. I think the result would be about the same.

I guess that periodically I would have to "reconcile" my holdings with the then current top 30 holdings of SCHD, selling stocks that fall out of the top 30 and buying stocks that are added to the top 30.

ER is only 6 bps so not much savings there but I have much more control. I could tax loss harvest losers to get $3k of losses to offset ordinary income ($360 tax benefit) and gains trade winners if I have headroom in the 0% LTCG tax bracket and get a stepped up basis.

 

[ChrisTexas]

Stock Investing in Retirment

I can think of many reasons to continue investing. To learn, keep up with inflation, exercise the mind, track current economics, not waste skills, build a richer future for beneficiaries, etc.

That is a great list. I enjoy trading stocks, less than 5% of my portfolio. It is a hobby and I enjoy reading,planning, and the mental effort to trade.

 

[Dash man]

True, but it is very difficult to build a well diversified portfolio using individual stocks. I have seen arguments that it takes holding 60-100 stocks or even more. Too much work to create and monitor IMO for an individual investor.

It is also true that not all individual stocks will be winners, so for the losers there are no capital gains.

Diversification can easily be accomplished with adding a few ETFs to individual stocks. If an individual stock goes down by 20% I bail on it and take the tax loss in my taxable account. I also sell a portion of a winner stock to take advantage of the capital gain offset.
Mutual funds won’t always be winners either. My individual stocks over the past 15-20 years have clearly been winners as my losers are weeded out quickly. As I mentioned earlier, I’ve made mistakes with selling some stocks too early (NVDA), but overall have done very well.

 

[Cortina]

100% individual dividend stocks since 1993. Retired 2006 at 48 when net dividend flow surpassed salary. Only (what I consider) top quality companies with a long history of good capital decisions. Infrequent trading when valuations between the stocks I follow get too far out of whack with each other. Sometimes years between trades.

I do not do it this way beause I think it will maximise returns, but because this is what makes me most comfortable.

This is essentially my approach too (CHANGE 48 FOR MY 51 !). I enjoy it - I probably spend too much time on computer as a result. Just follow my one simple rule for "investing / share picking" : Rule ONE : There are no Rules !!!


I simply tend to buy when prices are heading down (provided they are top quality companies and there is logic / reason for the fall) From time to time I follow gut feel about a newer / unknown stock- sometime works well , and sometimes (recent example OTLY) does not !!

 

[53anddone]

I like individual stocks as it helps me to control my taxes. In my taxable account I have stocks like BRK, GOOGL, AMZN, etc. and they grow with no tax consequence. My cash for daily living comes from individual bonds and munis I own in the same account.

In my IRAs I own dividend stocks, REITS, some preferreds, etc.

I own around 20 individual stocks and I use Morningstar as my analyst to help me select value. Its worth the $300 and the only investment cost I have.

 

[GaryInCO]

I am The Worst Investor In The World, especially stocks. If I pick randomly, if I take tips from friends, if I study the wisdom of pundits, even if I hire a manager to trade it for me -- everything I touch goes into the toilet. A few examples ...

* When I was young, the market had gone sideways for my entire life (1960-1982) -- the only way to make money was timing. So when I first started investing in 1980 my stocks (mostly HP) went up and up and up. It was well out of its normal sideways channel, and I got scared. Got totally out of the market. Sure enough, about 3 months later there was a huge crash -- in 1987. HP dropped alllmost down to the level I got out at. I wasn't sure it was time to get back in, and then it kept going up and up and up without me. Finally I said "this is insane, I've missed out on all this growth," and I jumped back in ... in late 1999. Missed about 1300% growth and then immediately took a big drawdown. I was underwater for over a decade.
* I bought a big chunk of BRK-B -- in mid-2007. It promptly tanked. I said "this is a buy-and-hold-forever stock, I'll hold on..." Gritted my teeth for over a year but I finally bailed with a 30% loss. Literally the next week BRK-B took off and never looked back. In 3 years it grew almost 6x -- but not for me.
* I said "I suck at this. I'll hire a pro." Picked a guy with a great track record for 10 years. He had a $100k minimum so I gulped and ponied up. He promptly dumped the whole wad into the market ... in late September '08. 2 weeks later my $100k was $50k.
* I bought a bit of TSLA in 2020. It almost doubled in 2 months -- great, I finally got one right!! My brother the Tesla fanboi was managing my mom's estate and he bought a whackload more right at the peak, raising my average price considerably. That was late 2021. TSLA proceeded to tank 75%. By the end of 2022 I said "This is crazy low" and I put in a buy order at 100. It got down to 102 and took off like a scalded cat, doubling in a month. Now with the recent drops I'm down 40%.

When I left Megacorp in 1991 I had $100k of HP stock (employee stock purchases) in my 401k. If I had ignored it for 33 years it would be worth about $2.25M now. But after 30+ years of prudent investing, I grew it all the way to ... $50k. (Turns out compound growth requires a **positive** return, who knew ...)

It's a miracle I can retire at all. Thank God for real estate.

 

[Randy145]

You're missing it.

SO then DON'T buy NVDA lol! The PE is...INSANE!

The multiple (p/e) is not why pros own nvda. It is a hyper growth company that has every reason and expectation to continue on that pathway. It is owned for its cutting edge innovation that other semis aren't even in the same ballpark with. It will always be in the stratosphere on a valuation basis. It will never be a "value" stock where one would give much credence to multiples.

BTW, if you own sp500 index funds or the q's, you own a lot of nvda, already.

 

[CincyDave]

My NVDA is up 135 fold from where I bought it in 2008. I've had some dogs as well. As others have stated, I invest in individual stocks because I enjoy doing the research, etc. Individual stocks are only about 10% of total NW.

 

[ktdtx]

I have most of my assets in stocks. Made up of managed mutual funds, closed end mutual funds, ETF, individual stocks. I am a patient investor and tend to buy more than I sell. Dividends are reinvested.



I think this gives me the most protection against inflation (with some risk of course) and the opportunity to grow the money. I am slowly evolving to lower risk stocks. Some stocks pay a higher dividend than you can get on bonds.

 

[Fermion]

I am
When I left Megacorp in 1991 I had $100k of HP stock (employee stock purchases) in my 401k. If I had ignored it for 33 years it would be worth about $2.25M now. But after 30+ years of prudent investing, I grew it all the way to ... $50k. (Turns out compound growth requires a **positive** return, who knew ...)

It's a miracle I can retire at all. Thank God for real estate.

I can do one worse than that.

Left Microsoft in 2015 with something around 10,000 shares unvested in stock bonus awards. At the time softy was $30 a share and in the dumps. Today those shares are worth over $4 million. But obviously we have been retired for 8+ years so there is that.

 

[FREE866]

I can do one worse than that.

Left Microsoft in 2015 with something around 10,000 shares unvested in stock bonus awards. At the time softy was $30 a share and in the dumps. Today those shares are worth over $4 million. But obviously we have been retired for 8+ years so there is that.

Yeah, I remember when MSFT was struggling. Seems like eons ago. Your example is one of the big reasons I don't buy individual stocks; I'd undoubtedly sell too early and be in regret. That's why I just stick with index ETF's . I'm not going to get insane returns like you can get with some individual names, but I get market returns, which even if they are half of historical returns I'll meet my goals.

 

[Montecfo]

My NVDA is up 135 fold from where I bought it in 2008. I've had some dogs as well. As others have stated, I invest in individual stocks because I enjoy doing the research, etc. Individual stocks are only about 10% of total NW.

Did you just buy that one stock or several at that time? What was your reasoning?

 

[Closet_Gamer]

But obviously we have been retired for 8+ years so there is that.

Priceless.

 

[aja8888]

I can do one worse than that.

Left Microsoft in 2015 with something around 10,000 shares unvested in stock bonus awards. At the time softy was $30 a share and in the dumps. Today those shares are worth over $4 million. But obviously we have been retired for 8+ years so there is that.

I had a $12 stock go to $0.05. I had to call my broker and ask him to take it out of my account because no one would buy it.

Fortunately, I retired without having to look at it in my account.

 

[Fermion]

I had a $12 stock go to $0.05. I had to call my broker and ask him to take it out of my account because no one would buy it.

Fortunately, I retired without having to look at it in my account.

Yes, I have a few shares of bluebird bio which have gone from ~$50 to $1. It is one of many reasons I laugh at those who think pharma are all raking in the money...yeah, raking it in from investors lol.

 

[aja8888]

Yes, I have a few shares of bluebird bio which have gone from ~$50 to $1. It is one of many reasons I laugh at those who think pharma are all raking in the money...yeah, raking it in from investors lol.

Mine was a pharma stock too.