For those of us who don't know what an ETF

The thing some like about funds is that you can reduce risk by the diversity they offer. Another way to look at it is little risk means little gains.

Contrast that with actually picking a stock and buying low and selling high (at least trying to). Doing that exposes you to more risk; greater upside potential and greater downside potential.

I used to day trade before online trading was available and commissions took a bite out of my gains. When online trading became available, I had adopted more of a buy (good stocks) and hold strategy.

Take, for example, INTC. They announced earnings yesterday and were up about 1% at the close before announcing. After announcing, the stock jumped around 8% in after hours trading and gap opened up this morning with most of what it gained in after hours trading. You won't see that kind of gain in a fund because they diversify to minimize risk.

You can make money in funds. I bought a growth fund in the early 90's and kept it; it's up about 8X in about 25 years.

 

As I mentioned before, funds/investments have different levels of risks. Invest at the risk level you are comfortable with. Or for no risk w/ possible gains above the standard declared yearly percentage go with Annuities. It all depends on your risk exposure comfort level and needs for a guaranteed income.

 

The old adage about putting all your eggs in one basket comes to mind. I'm an Engineer, not an Accountant so I take my money to my Investment Counselor who puts it into Mutual Funds and Annuities. Sure he takes a small cut but it's like buying insurance for my money.

Yes and same. When we were younger I did do some of the pick and choose but we finally went with an investment firm. Brenda is my girl and her perception of finance has been fantastic for years with us. Older now we tend to go low risk investments.

Now if you just want to invest in a single stock and know exactly what you want there are places like E-Trade, Ameritrade and endless others where you pay a flat fee per trade. You can buy or sell whatever you wish. Pretty much up to you.

Ron

 

$0 commissions mean you can put on a position in bite sized chunks without the friction of a commission. @1892/share is Amazon still a bargain? How about GE @ 11.66/share?
There is no price point where commissions for online trades will reappear. The money is now in "wealth management", a euphemism for people to stupid or too lazy to manage their own money. If you're that rich you deserve to be taken for every nickel you have; or conversely to be satisfied with the ho-hum return of a passively managed index fund.

Apparently it was a bargain AT $1892/share since it now trades at $2100/share in the after hours session.

 

When I started @ Hercules their stock was ~$18 and a lot of folks sold when it hit $38 a few years later. Then it went up and "split" 1:3 and continued to climb to ~$150/share after the CEO selling off quite a few of it's subdivisions to make it the #1 Specialty Chemical Company. Gone were all of the explosive's that the company started from, plastics, carbon fiber, etc. He even sold the company Logo to the company that bought the reloading powders. The CEO was the Golden Boy of Wall Street and amassed a huge Golden Parachute in bonus' and stock options which he promptly pulled the ripcord on and retired. But just before he retired he gave his Alma Mater a $25 Million donation to their endowment fund which the company was obligated to match according to board policy. Then it went to $0 (along with all the shares I earned as matching funds in my retirement 401K account) and the Company ceased to exist. He is now (at least by former employees) known as the butcher of Hercules. A once thriving company laid to rest in ruin. Caveat Emptor when buying a single stock to invest in and watch it like a hawk.

 

My wife just pointed out Amazon was way up after well exceeding all of their holiday forecast. Pretty sure we helped with that.

Ron

 

Buying single stocks is gambling. As long as you acknowledge that, knock yourself out.

Investing in the company you work for is similar to pooping where you sleep. Way way too much risk for my taste. Personal and financial. My portfolio has only ever held up to 10% company stock and that was very early in my investment career. Today I sell all shares immediately at vesting.

I do all my own investing in low cost indexed mutual funds. Read any of John Bogle’s many books and you’ll know why. The man should have won a Nobel Prize. His name should be just as notable as Warren Buffett.

Pick an asset allocation and stick with it for 40 years, save at least 30% of your income and you’ll be wealthy.

To answer your question though... yes Schwab, Fidelity, etc will all be able to execute buy orders on any publicly traded company. These two companies also have excellent customer service and will walk you through the process.

 

Buying single stocks is gambling. As long as you acknowledge that, knock yourself out.

True, but most gambling promises a negative return on investment. About -1% at best. There are plenty of "safe"-ish stocks that pay reliable dividends and include a shot at capital growth. They may drop in the short run, but aren't going to zero like the typical casino bet. If you buy and hold long enough, it's almost a sure thing.

Investing in the company you work for is similar to pooping where you sleep.

Yup. If the company fails, you lose your job AND your savings. No thanks.

I do all my own investing in low cost indexed mutual funds.

That's what I advise my kids and anyone that asks. You can take graduate level finance classes (as I have) and that's what you'll take away: 1) Diversify, and 2) Buy and hold.

Pick an asset allocation and stick with it for 40 years, save at least 30% of your income and you’ll be wealthy.

I'm always amazed at the people that don't "get it" and choose to live paycheck to paycheck, eating beans and weenies at the end of the month until the next check arrives. On the one hand I see the value of living the best you can. You can't take it with you, after all. But in my experience, having wealth is like freedom in the bank. Nothing I could purchase would be as valuable to me as that peace of mind and freedom. Something breaks and you need a new car or a new fridge, you go buy one. No drama. Want to travel somewhere, you go. Feel like retiring, go for it. A friend rents her basement to a woman that still works at Home Depot at age 74. She spends every penny in the casino. Happy as a lark, she says. Not for me!

 

True, but most gambling promises a negative return on investment. About -1% at best. There are plenty of "safe"-ish stocks that pay reliable dividends and include a shot at capital growth.

Yep, but it is still a gamble that could leave you nothing in return for your money - and quickly. Everyone has heard of Enron, Kmart, JC Penny, GE, the list goes on, and on. Best to diversify unless you have enough that you can gamble.

But in my experience, having wealth is like freedom in the bank.

Wealth is freedom. I certainly wouldn't classify myself as 'wealthy', but I had enough in the bank to quit my depressing - dead end - but good paying job at an IC manufacture that everyone here knows, and go back to school. I could go back to school with no income, but I found a professor that likes having my leadership around for a few bucks a week. I like teaching, leading, and learning new things with him - and it's massively building my human capital for my next job.

If I hadn't had some amount of wealth, I would still be at that job, depressed, frustrated, stuck, etc. Thanks to diligent savings I was able to skip out the door to something I was excited about - even if it isn't going to grow my retirement funds!

Money is a tool - it either works for you or you work for it!

 

You gotta save. I have some siblings and other relatives that never did or even cashed out their 401k early to buy big-ticket items. Now they a small inheritance or nothing at all and have to keep working just to put beans on the table. You have to live within your means or you will have no retirement. Yes it can be tough raising a family. Saw on the news recently that <40% Americans have $4000 in ready liquidity to use for emergencies. The first raise went into the 401k plan and each after until I reached the max 18% we were allowed to put in. That made a nice nest egg for retirement.

 

The first raise went into the 401k plan and each after until I reached the max 18% we were allowed to put in. That made a nice nest egg for retirement.

18% is no longer enough in this field. Companies are very open about laying off folks in their early to mid 50's, with what I'd consider a modest severance package. I suggest no less than 30% savings, but 50%+ if you can swing it!

The IC manufacture that I worked for just had a 10% RIF in December, nearly everyone was in their 50's. Stock holders love it - company moral is at an all time low from what I can tell. I left in January.

source: https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

 

I never maxed out my 401k investment, but was very close. When I “retired”, I also was getting divorced. Between my savings, my share of selling the house in a hot market and selling a vacation home to my ex, I am very comfortable. Even have enough to start my own company in retirement.

The entire investment was is a diversified set of low cost mutual funds.

I did invest in a single stock once. I knew that the company was about to be sold and figured I’d get a windfall. But the sale price just covered preferred stock investors and left nothing for common stock holders. After that, investing in single stocks was permanently off the table.

 

Dividend stocks are something you might consider.

A few years ago, I was looking for something that gave a higher interest rate than banks and brokerages were paying (around 0.03%). Thought briefly about CD's and didn't want to be locked in for months. Then I considered on-line savings accounts. I finally settled on a stock paying better than 8% in dividends (STWD). I've had it for a few years now and have made a few thousand in dividends and stock appreciation on a $10k investment.

My largest stock holding is only paying about a 2% dividend, but it's still a thousand a month (paid quarterly).

 

You gotta save. I have some siblings and other relatives that never did or even cashed out their 401k early to buy big-ticket items.

Never knew we had the same brother.

I see that scenario daily and yes, I have a brother who just turned 60 and likely will be working forever. He actually has a Masters but has always spent more than he makes. Then too, the only thing one can do with a Masters in the Arts is teach at the university level. Myself and two sisters have tried for years to impress on him that you can't keep spending money you don't have.

Anyway retirement stories are another thread but as I mentioned earlier as my wife and I aged drawing closer to retirement our investment options changed. Like many we moved from higher risk to low risk. The idea was make and stash money when younger and cruise now and that is working out fine. I have countless friends like my brother. In a few days I'll turn 70 and was glad to retire at 63, my wife was 65.

Ron