Stock Market Roller Coaster

[griffer]

How safe is the stock market in terms of having it drop like it did in the Great Depression? I'm looking at changing up some of my retirement funds but I don't want to be too risky about it nor too conservative to the point that I don't make much in the long run.

I cannot recommend a well researched mutual fund portfolio enough to someone who lacks the time and experience to trade stocks.


IMHO, you need a significant amount of cash invested across many names to significantly lower your beta, otherwise you are just playing roulette.

By buying several diffferent mutual funds, or an asset allocation (lifestyle or ag tailored) fund, you leverage the diversification of the fund.

Nothing is safe. The stock market is never a sure thing, but the stats say that in the long haul it is still a good investment.

Now i sound like a shill for the fund industry, but check out Morningstar.com. They have some great educational pieces on investing.

And yes, there are other options- ETFs, Closed Ends, Index funds, etc. for diversification, but I like to keep it simple.

 

[Rooster]

Sold out two weeks ago. I see bad Ju Ju on the horizon....

 

[Viola]

I cannot recommend a well researched mutual fund portfolio enough to someone who lacks the time and experience to trade stocks.

What's the minimum entry on those, though? I was looking at sites that want 10k to let you in the door...still sounds great... it just ain't gonna happen for me.

-Viola

 

[griffer]

Open an IRA, invest a buck.

Rollover an old 401k.

Get an ING account, start saving in a money market.

Try Fidelity.

Go to morningstar.

Or my favorite, rob a bank, launder the money by buying blood diamonds, conerting them to gold in mexico, claiming the gold as an inheritance found in an estate, etc., etc., step 3 profit.

 

[griffer]

My father sent me an article saying that intelligence and financial prosperity are not positively correlated.

Point is, that it isn't hard. A systematic savings plan and a simple investment portfolio can win out over cleverness, short-cuts, hot tips and complicated schemes.

That's why I plan on being 'stupid rich'.

 

[Gary Crumrine]

I cannot recommend a well researched mutual fund portfolio enough to someone who lacks the time and experience to trade stocks.

IMHO, you need a significant amount of cash invested across many names to significantly lower your beta, otherwise you are just playing roulette.

By buying several diffferent mutual funds, or an asset allocation (lifestyle or ag tailored) fund, you leverage the diversification of the fund.

Nothing is safe. The stock market is never a sure thing, but the stats say that in the long haul it is still a good investment.

Now i sound like a shill for the fund industry, but check out Morningstar.com. They have some great educational pieces on investing.

And yes, there are other options- ETFs, Closed Ends, Index funds, etc. for diversification, but I like to keep it simple.

While I don't necessarily agree that a reduced Beta is always desirable -- the point is to capture high Beta stocks when they have a chill -- Griffer has, I think, nailed it. If one wished a basic portfolio, a S&P 500 Index Fund (Vanguard comes to mind) seems attractive. One of our portfolios is in such an account.

The next level up might be Griffer's suggestion.

Then might come something similar to keeping half your money in DVY [an exchange traded fund that holds the top 100 dividend paying stocks (some exceptions)] and the remaining half equally spread among no less than 10 individually selected stocks.

Finally, a portfolio composed exclusively of individually selected stocks. The problem here is that sometimes there just aren't enough qualified companies available at attractive prices.

All in all, I am most comfortable with alternative 03 (half in DVY, half in individual stocks) as it offers acceptable diversification (within the limits of DVY) and the opportunity of earning excess returns through individual stock selection.

Parenthetically, I was recently asked to read the manuscript copy of an introductory investment book written by my business partner and found it brilliant. She anticipates publication in early August, 2007, and I would think the book useful to almost everyone. I understand that advertising in this forum is inappropriate, but I will respond to PM's with the author and title.

Cordially,
Gary

 

[griffer]

While I don't necessarily agree that a reduced Beta is always desirable --

I was referring to the overall Beta of an entire portfolio, which for a risk averse to moderately aggressive investor, you should shoot for the 1 or less to keep the heart in check. Get your alpha from SCs and International and fully managed MC/LCs.

But that's just my one-size-fits-all, opening gambit for first time investors.

[Yeah, I rememebr loving that lil' philly LU (or Enron or whatever) when she was bucking, and loving her more when she 'cooled'. Wish I had stopped loving her sooner- the cool quickly became the chill of rigor.]

 

[Lincsong]

somthing to contemplate

I see Motorola (MOT) took a dive this year and is now trading near it's 52 week low. This might be something to get a couple shares. Even if it goes back up to it's high that's a 33% return.

Ford isn't going anywhere in terms of disappearing. Goodyear was way down a couple years ago and is now trading at $35. Xerox was pronounced DOA at $5 and it's around $17. Ford is a long term holding. Buy it, then don't lose any sleep over it, as it will only lead to frustration. If the Ford Family let's Allan Mullaly have free reign he could pull the thing off. My advice to Ford and GM; fire all the accountants, put the cash in a barrel and pay the bills with the cash.

 

[Martinis at 8]

I only invest in things that I can control, therefore that leaves out any and all publicly traded securities. Why would a sane man do otherwise?

M8

 

[PrettySquareGal]

I only invest in things that I can control, therefore that leaves out any and all publicly traded securities. Why would a sane man do otherwise?

M8

What exactly can one ultimately control other than one's outlook, opinions and actions? :icon_smil

 

[Martinis at 8]

What exactly can one ultimately control other than one's outlook, opinions and actions? :icon_smil

This is true. However, you have more control if you invest in your own business, or in investments where you have a direct say in how things are run. That was my point, as is Warren Buffet's. No?

M8

 

[Lincsong]

I think Buffett invested in things that he understood. For instance, he and millions of men shave every morning, thus he invested in Gillette. He eats hamburgers; hence McDonalds. He wears shoes; Tony Lama, Luccetti, Nocona and Dexter. He likes chocolate; Sees Candies. When he gets the controlling interest then he attempts to compliment his various companies. The official card of Disney Resorts is American Express, McDonalds has Disney toys in childrens Happy Meals, Capital Cities merged with Disney, etc.

 

[Lincsong]

It's less than 100 points shy of 14,000!!!!!!!! Who thinks it will bust through on Monday or Tuesday?????? It just broke the 13,000 mark a couple months ago.:eusa_clap

 

[jamespowers]

It's less than 100 points shy of 14,000!!!!!!!! Who thinks it will bust through on Monday or Tuesday?????? It just broke the 13,000 mark a couple months ago.:eusa_clap

Not today but soon man soon. I'll give everyone a free tip---DUK.

Regards,

J

 

[Lincsong]

54 points to go!!!!

 

[jamespowers]

54 points to go!!!!

More like 20.

 

[Lincsong]

It danced about 14,000 today, but closed at 1371. Maybe it will close about 14,000 tomorrow. ooooooooh this roller coaster is too stressful.

 

[Natty Bumpo]

56 trading days from 13,000 to 14,000.

I remember 1972 when it crossed 1000.

We thought that was the absolute top.

 

[jamespowers]

56 trading days from 13,000 to 14,000.

I remember 1972 when it crossed 1000.

We thought that was the absolute top.

Things sure have changed.
Oh and (avatar specifc) "There I was standing on the market floor when a Buffalo charged me."

Regards,

J

 

[Lincsong]

Profit taking dropped it 53 points today.