Investing 102

[GregWeld]

Originally Posted by Taylor1969

Greg - FANTASTIC THREAD... and just at the right time.

31yo who wants to build a future.

I have 20K in my account ready to invest. This morning i bought my first ($1000 in T)

So, with 19K remaining what do you think about 2K in each of the the following to start:

MCD
GSK
COST
MMM
KO

What do I do with the rest? Anything I should add in to balance things out? BTW - I have an energy stock through a DSPP and options at work.

By the way - if I have the ability to self direct my 401K, should i follow the exact same principles there?

Thanks!
Chris

Chris....

Somehow you missed the "GREAT CHART" part of the research...

Go back and look at 3M (MMM) and Glaxo Smith Kline (GSK)... these are not the growth story you need. So what I would do is to look at your choice -- and compare them against other companies in their sector. You really want to TRY to get all of the major components in your picks -- Growth - Dividend - good chart - name/business you understand.

I also think that with 20K to invest - I'd prefer you get more diversity. So even if you just went with 1250 or 1500 per name and spread out a bit more.

You have Coke - McDonalds and Costco.... All good stocks -- but with the size of your account - and your age - I'd try to get some separation. These 3 horsemen are basically in the same 'sector'.... food/retail.

That, and you don't have any higher risk stocks to balance out your steady eddies. Your age allows you to take a little more risk than what you've chosen... and they can really put some octane in your total returns.

So with 20 grand --

choose Coke or McDonalds

Pick a different drug company -- with a better growth story that GSK or at least compare them and see if there is one you'd be just as happy with. You may end up with GSK if it's the one you like.

Ditto this in 3M

I like Costco --- I don't own any -- but it has a growth story and is a really well run company. I just would like to see you have more diversification.

Let's take a look at adding a high yielder -- JNK or HYG or NLY or some other in that category.

Great that you have energy already -- the country is always going to need energy!

Yes I'd follow the same strategy in your 401... You need all the horsepower you can to get you to win the race. You're young. You have time. So treat your 401 and your "new" account as ONE BALANCE -- add them up -- look at them TOGETHER - don't duplicate and don't overlap. IT'S ALL YOUR MONEY -- so diversify and think of them as ONE account when looking at them.

Remember --- I'm (nor anyone else) is here to pick stocks for anyone... We're really discussing what to think about and how to look at them.. so please don't feel I'm dissing your choices... you're on the right track but let's look a little more and then post up what you're thinking... and maybe where you're at in the 401 (names so we can look at it all - and feel free to use PM if you're not comfortable posting this stuff publicly).