Investing 102

[GregWeld]

As long as we're on "year end" thoughts…. Here's a "notion" that always kills me when I hear it.


A guy is looking over his portfolio -- he has new money to put to work. He AVOIDS buying the stocks that have gone UP…. Why? Because they've gone up!


Really??

So you're unhappy because they did what you want them to do?????? Explain that to me please…


I had said that I bought 500 shares of Twitter (TWTR) and that I would possibly increase this stake to 1000 total shares. I just bought the other 500 this morning. Why now? BECAUSE THEY'VE DONE WHAT I WANTED THEM TO DO --- THEY'VE GONE UP.


If you go back and look at the long term (3 plus years) charts -- You WANT them higher on the right than the left side! So if you use that logic -- then there's no way you're not going to pay more for the new shares than you did the old. (Averaging DOWN is a different story! Not to be confused with just building a position).


If you owned 100 at $40 a share -- and you pay $45 for the 100 new shares -- you still own shares at below the current market trade price. You now own 200 shares at $42.50 and the stock is trading at $45 What's wrong with that??

[bdahlg68]

Absolutely. Never be afraid to buy a stock that has gone up unless it would skew the % of your portfolio in that stock. Call it what you want - dollar cost averaging, averaging in, nibbling - whatever makes you happy - but it is one of the fundamentals of being a successful investor!

Originally Posted by GregWeld

As long as we're on "year end" thoughts…. Here's a "notion" that always kills me when I hear it.


A guy is looking over his portfolio -- he has new money to put to work. He AVOIDS buying the stocks that have gone UP…. Why? Because they've gone up!


Really??

So you're unhappy because they did what you want them to do?????? Explain that to me please…


I had said that I bought 500 shares of Twitter (TWTR) and that I would possibly increase this stake to 1000 total shares. I just bought the other 500 this morning. Why now? BECAUSE THEY'VE DONE WHAT I WANTED THEM TO DO --- THEY'VE GONE UP.


If you go back and look at the long term (3 plus years) charts -- You WANT them higher on the right than the left side! So if you use that logic -- then there's no way you're not going to pay more for the new shares than you did the old. (Averaging DOWN is a different story! Not to be confused with just building a position).


If you owned 100 at $40 a share -- and you pay $45 for the 100 new shares -- you still own shares at below the current market trade price. You now own 200 shares at $42.50 and the stock is trading at $45 What's wrong with that??

[SSLance]

I'm sure this was probably covered earlier in the thread, but maybe things have changed since then...and it's something I'm looking at now so why not ask?

Who are you all mostly using for investment accounts these days?

I grew up in the investing world where you either paid hefty commissions on every equity trade or you paid a management fee quarterly to get the free trades. These days with Etrade, TD Ameritrade, and others doing free or very low cost trades...who is the hot ticket to use?

To me, if there were several houses that offered basically the same account fee structure, I'd be interested in the one that has the best\easiest to use research tools built into the online account.

[toy71camaro]

Originally Posted by SSLance

I'm sure this was probably covered earlier in the thread, but maybe things have changed since then...and it's something I'm looking at now so why not ask?

Who are you all mostly using for investment accounts these days?

I grew up in the investing world where you either paid hefty commissions on every equity trade or you paid a management fee quarterly to get the free trades. These days with Etrade, TD Ameritrade, and others doing free or very low cost trades...who is the hot ticket to use?

To me, if there were several houses that offered basically the same account fee structure, I'd be interested in the one that has the best\easiest to use research tools built into the online account.

I use ShareBuilder. I got free $ for signing up with my Costco account. Their Roth IRA accounts are free (ie. no monthly/yearly costs). Same with a regular account. Plus i get Market/Limit Trades at like $5.95. But if i "auto-invest", it will make the Market trade on tuesday for only $2. When i started, i was only doing a hundred bucks here, a hundred there, so $6 was nearly a 6% hit on my newly purchase stock. Thus the happiness for the $2 entry fee. But now i've learned to stick to at least $1k purchases to make it worthwhile.

I also have a Schwab Account. Mentioned earlier in this thread for its great research tools. But i dont have anything invested into that account. I opened it solely (at this point) for research.

[GregWeld]

I have accounts that are pro managed -- and accounts (the one I use here for expamles and showing off) at Schwab… and Fidelity.


I like Schwab because it costs me nothing - has great tools - is easy to use - and I have a branch right down the street if I need a check or to deposit a check. They also have good mobile tools.

One thing I would NEVER do is go with an individual to manage anything I have… the temptation is just too great and the stories are on TV every day… So stick with a commercial brokerage for all your transactions.

[SSLance]

Thanks everyone... I forgot about Schwab, they were one of the first low cost investment accounts to come along if I remember correctly.

I've got all of my current accounts with Merrill. When I was active in the market, I had my larger accounts in the "Unlimited Activity" plan which worked out pretty well. I dropped out of it when I went to cash.

If I start up again, I'd like to do it on my own mainly with stocks and ETFs so I need to find a way to make trades on the cheap. That ain't happening with a Merrill Account these days without being in one of their management plans.

[WSSix]

Vanguard and Fidelity for me. I started Vanguard on my own years ago. Fidelity came about through work and I've simply expanded my use of it from there.