Invest $10,000

[The Hogfather]

Which stock/stocks would you buy right now with a $10,000 lump sum (would you even recommend buying stock)?  Going forward, would you continue buying the stock/stocks you would buy today?  Say, $500/month.  What is the best way to invest this monthly amount, in your opinion?

Young investor, not risk-averse.  This is not necessarily with retirement in mind (obviously, retirement is always on the mind), as the investor already has retirement accounts, etc.

[The Hogfather]

Looking at CSCO.  Any opinions on it?

[HawgWild]

Don't take any stock tips from me or john c. 

[The Hogfather]

Don't take any stock tips from me or john c. 

Got it.  Thanks.  You know anybody who I SHOULD take stock tips from?

[HawgWild]

Why not rephrase the question by asking "What $10,000+ (or whatever $ amount you want to assign)  stock/MF/EFT purchase have you recently made?" It's easy to give a tip but to back it up is another matter. JMHO.

[The Hogfather]

Why not rephrase the question by asking "What $10,000+ (or whatever $ amount you want to assign)  stock/MF/EFT purchase have you recently made?" It's easy to give a tip but to back it up is another matter. JMHO.

I would hope the answer would be the same.  If someone has made a large purchase for their own portfolio, I would think that would be their answer.

If that's how someone wants to answer the question, that's fine. 

Tell me your recent individual stock purchases and why you made them.

[jim shell]

for me, mutual funds work best....index funds of vanguard

[The Hogfather]

for me, mutual funds work best....index funds of vanguard

Thank you for your input, Jim.

[HawgWild]

Well, since you asked.....

I recently bought some BAC because I didn't have any individual financials in my portfolio, I thought it would pass the upcoming stress test, raise the dividend and catch up with the other banking stocks. It did, and did, but hasn't, yet.

I also added some CNP to my accounts. I've been accumulating this stock for years. It's my widows and orphans fund. It recently increased it's dividend 14.5% and now pays 4%; which is more than the funds I used to purchase were getting. This is the most I've paid for it. Historically it starts acting a little squirrelly when the pps gets above $25 but it paid a $1.50 annual dividend back in the day and that's what I'm in it for.

I took a flyer on some SD.  It's been beat up pretty well for the last few years but I keep thinking that at some time this stock is going to pop.

I'm considering adding some ALU. I lost big on this stock 10 years ago and still hold those shares. I added some at $1.44 last spring and it looks to continue the rise.

[The Hogfather]

Well, since you asked.....

I recently bought some BAC because I didn't have any individual financials in my portfolio, I thought it would pass the upcoming stress test, raise the dividend and catch up with the other banking stocks. It did, and did, but hasn't, yet.

I also added some CNP to my accounts. I've been accumulating this stock for years. It's my widows and orphans fund. It recently increased it's dividend 14.5% and now pays 4%; which is more than the funds I used to purchase were getting. This is the most I've paid for it. Historically it starts acting a little squirrelly when the pps gets above $25 but it paid a $1.50 annual dividend back in the day and that's what I'm in it for.

I took a flyer on some SD.  It's been beat up pretty well for the last few years but I keep thinking that at some time this stock is going to pop.

I'm considering adding some ALU. I lost big on this stock 10 years ago and still hold those shares. I added some at $1.44 last spring and it looks to continue the rise.

Thank you, sir!

[The Hogfather]

Anyone else?

What do you guys think about CSCO?

[Ash]

I think a vanguard index fund is great.

[The Hogfather]

I think a vanguard index fund is great.

Thank you for your input.  I'm going to look into these.

[The Hogfather]

Any funds in particular that you like?

[Old Tusk]

I would suggest Vanguard total stock fund or their S&P fund for starting out.

[alwaysondbigscreen]

im kinda interested myself
i recently divested from trf
and im scratching my head as to where to jump
i still like some bank stocks but im rather bank heavy

[alwaysondbigscreen]

maybe something in the small cap value area

[The Hogfather]

maybe something in the small cap value area

Any specifics?

Here's a Small-Cap Vanguard Fund (VSMAX):

https://personal.vanguard.com/us/funds/snapshot?FundId=0548&FundIntExt=INT

What do you think?

[alwaysondbigscreen]

Any specifics?

Here's a Small-Cap Vanguard Fund (VSMAX):

https://personal.vanguard.com/us/funds/snapshot?FundId=0548&FundIntExt=INT

What do you think?

im more of an individual stock kinda guy, but i might check out what they are buying. thanks

[The Hogfather]

im more of an individual stock kinda guy, but i might check out what they are buying. thanks

From the fund info site:

Month-end ten largest holdings
(3.1% of total net assets) as of 02/28/2014
1   American Realty Capital Properties Inc.
2   United Rentals Inc.
3   Fortune Brands Home & Security Inc.
4   Jazz Pharmaceuticals plc
5   Hanesbrands Inc.
6   Wabtec Corp.
7   athenahealth Inc.
8   Packaging Corp. of America
9   Harman International Industries Inc.
10   American Airlines Group Inc.

Do you have any Small-Caps you are looking at that you would like to share?

[alwaysondbigscreen]

From the fund info site:

Month-end ten largest holdings
(3.1% of total net assets) as of 02/28/2014
1   American Realty Capital Properties Inc.
2   United Rentals Inc.
3   Fortune Brands Home & Security Inc.
4   Jazz Pharmaceuticals plc
5   Hanesbrands Inc.
6   Wabtec Corp.
7   athenahealth Inc.
8   Packaging Corp. of America
9   Harman International Industries Inc.
10   American Airlines Group Inc.

Do you have any Small-Caps you are looking at that you would like to share?

not yet im hoping some these guys will steer me the right way
if i didnt have so much in the banking sector id be thinking about more RF
BAC OR C they are all trading below book value
but i might not be the best guy to take advice from I a contrarian. if the whole world is screaming sell then im thinking about buying and visa versa
im kinda curious now as to what boeing stock is going to do if they find the plane and detremine mechanical failure

[Old Tusk]

I would think your initial found should be broadly based. While I am a big fan of their value funds, I don't believe the base of your portfolio.

[The Hogfather]

Didn't pull the trigger on CSCO.  Up 3.5% today.  Poo!

[The Hogfather]

I'm considering adding some ALU. I lost big on this stock 10 years ago and still hold those shares. I added some at $1.44 last spring and it looks to continue the rise.

ALU up nearly 4% today!  Didn't pull the trigger on it, either.

[HawgWild]

Don't try to hit a home run. Invest for the long haul. If you like ALU it's still significantly off it's 52 week high of $4.68.

[wilbur]

I would not advise buying anything right now with a large sum of money.  This market has been on a 5 year run.  When you do buy, your largest holding needs to be VOO and it's perfect for dollar cost averaging.   It's the S & P 500 ETF from Vanguard....or buy the mutual fund counterpart.  It will beat 75% of all mutual funds in any given year and it's diversified by nature.  11% return since The Great Depression is a pretty good track record.  Doubling your money every 6 1/2 years is a path to wealth. 

It's expense ratio is .05%.  Compare that to most other mutual funds and you will be amazed how that builds up over time.  Out of all the mistakes I have made, what I have learned the most is keep it simple.  Place your bet on the 500 largest companies in the United States of America.  They got there for a reason. 

[The Hogfather]

I would not advise buying anything right now with a large sum of money.  This market has been on a 5 year run.  When you do buy, your largest holding needs to be VOO and it's perfect for dollar cost averaging.   It's the S & P 500 ETF from Vanguard....or buy the mutual fund counterpart.  It will beat 75% of all mutual funds in any given year and it's diversified by nature.  11% return since The Great Depression is a pretty good track record.  Doubling your money every 6 1/2 years is a path to wealth. 

It's expense ratio is .05%.  Compare that to most other mutual funds and you will be amazed how that builds up over time.  Out of all the mistakes I have made, what I have learned the most is keep it simple.  Place your bet on the 500 largest companies in the United States of America.  They got there for a reason. 

Seems logical.  Thanks for the input.

[The Hogfather]

I would not advise buying anything right now with a large sum of money.  This market has been on a 5 year run.  When you do buy, your largest holding needs to be VOO and it's perfect for dollar cost averaging.   It's the S & P 500 ETF from Vanguard....or buy the mutual fund counterpart.  It will beat 75% of all mutual funds in any given year and it's diversified by nature.  11% return since The Great Depression is a pretty good track record.  Doubling your money every 6 1/2 years is a path to wealth. 

It's expense ratio is .05%.  Compare that to most other mutual funds and you will be amazed how that builds up over time.  Out of all the mistakes I have made, what I have learned the most is keep it simple.  Place your bet on the 500 largest companies in the United States of America.  They got there for a reason. 

You're speaking of VOO, VFIAX, and VFINX, right?

You prefer VOO?  Are there major pluses and/or minuses for VOO over the others?

I'm not really familiar with ETFs/Vanguard Funds.

Thanks in advance.

[wilbur]

You are correct.  Voo is the ETF.  With an ETF, you can sell intra-day.  ETFs are traded like stocks. So there is a $7 dollar commission on the trade through Vanguard. VFINX are the investor shares.  Which is less than $10,000.  If you have more than $10,000 it's VFIAX.  The expense ratio on VFIAX is .05% compared to .17% on VFINX.  If you are going to $ cost average in small amounts, I'd go with the mutual funds. 

Fees really do matter though.  At .05% you will pay $64 over ten years on $10,000 invested. With the average fee, you will be paying close to  $1800 over the same time period. 

Personally, I would have done better financially if I would have put all my money in the S&P 500 instead of investing (or sometimes guessing) on my own.  However,  there are smarter men on this board than me that would disagree.  I just usually lose when I try to beat the market. 

[twistitup]

Where is HIM?

[The Hogfather]

You are correct.  Voo is the ETF.  With an ETF, you can sell intra-day.  ETFs are traded like stocks. So there is a $7 dollar commission on the trade through Vanguard. VFINX are the investor shares.  Which is less than $10,000.  If you have more than $10,000 it's VFIAX.  The expense ratio on VFIAX is .05% compared to .17% on VFINX.  If you are going to $ cost average in small amounts, I'd go with the mutual funds. 

Fees really do matter though.  At .05% you will pay $64 over ten years on $10,000 invested. With the average fee, you will be paying close to  $1800 over the same time period. 

Personally, I would have done better financially if I would have put all my money in the S&P 500 instead of investing (or sometimes guessing) on my own.  However,  there are smarter men on this board than me that would disagree.  I just usually lose when I try to beat the market. 

I'm trying to figure out what to do.  I'm thinking $10,000 or so will be the initial investment and then $200/month after that.  You would recommend VFIAX in that case?

[wilbur]

Yes, but I would be careful right now.  This market has a lot of value already priced into it.  We are in year five of a bull market.  There are a lot of talking heads saying it's time for a pull back.  Buy VFIAX on sale and you will make money unless this country collapses. 

[Old Tusk]

I use VTSAX as my equity base. Only because of being the most diversified fund.  You are on the right track. Open an account and set up a monthly transfer, and then forget about it. I promise the less you mess with it the more it will grow. Playing the market can get to be a very expensive hobby.

[twistitup]

Don't invest in Mexican iron ore

[JoeyCapital]

Don't invest in Mexican iron ore

Well played

[Arkansasbeaux]

The biggest factor on your future returns is proper asset allocation. You are young and obviously growth oriented. Mutual funds will provide you some diversification within the different asset classes. The debate over active or passive funds is six one way and a half dozen the other. Nothing wrong with either. It's a personal preference. Vanguard is fine for index funds and for actively managed I'm a big fan of American Funds. As far as allocation, I would suggest the following breakdown. 15-20% aggressive, 25-30% growth, 30-40% growth & income, 10-15% income, and 30-35% of the portfolio in international (spread out amongst the different areas). I would personally go on the low side on income with the probability of interest rates rising in the near future. If you need more detail on what funds fall into the different categories, I can give you the name and ticker symbols from a few of the American Funds that I use. As to the question of lump sum or DCA, I personally DCA most of the time. However, if you haven't already done so, I would at the minimum do 5500 as a lump into a Roth for 2013. The deadline is this upcoming Tuesday, the 15th of April.

[The Hogfather]

The biggest factor on your future returns is proper asset allocation. You are young and obviously growth oriented. Mutual funds will provide you some diversification within the different asset classes. The debate over active or passive funds is six one way and a half dozen the other. Nothing wrong with either. It's a personal preference. Vanguard is fine for index funds and for actively managed I'm a big fan of American Funds. As far as allocation, I would suggest the following breakdown. 15-20% aggressive, 25-30% growth, 30-40% growth & income, 10-15% income, and 30-35% of the portfolio in international (spread out amongst the different areas). I would personally go on the low side on income with the probability of interest rates rising in the near future. If you need more detail on what funds fall into the different categories, I can give you the name and ticker symbols from a few of the American Funds that I use. As to the question of lump sum or DCA, I personally DCA most of the time. However, if you haven't already done so, I would at the minimum do 5500 as a lump into a Roth for 2013. The deadline is this upcoming Tuesday, the 15th of April.

Thanks for your response!

[Augustus]

Which stock/stocks would you buy right now with a $10,000 lump sum (would you even recommend buying stock)?  Going forward, would you continue buying the stock/stocks you would buy today?  Say, $500/month.  What is the best way to invest this monthly amount, in your opinion?

Young investor, not risk-averse.  This is not necessarily with retirement in mind (obviously, retirement is always on the mind), as the investor already has retirement accounts, etc.

Hog, if you're looking for ideas on stocks/funds to buy into... I would recommend Stephen Leebs' subscription http://www.completeinvestor.com/ It's a monthly newsletter, with occasional email updates... and he covers short term, long term, fixed income, high/low risk plays across all segments. He focuses quite a bit on energy, but because for the last decade the energy sector has done extremely well. But, he also picks out recommends for tech, metals, bio, etc.  And, his track record is pretty darn good.

I've been a subscriber for 6 years and have not been disappointed.

As far as CSCO specifically? I've followed this stock for years and they've only ever hovered in the 20's range.  If you're looking at long term, they're a no-go. If you're looking at short term or day trades... meh, maybe. But there are other tech stocks like Apple, Google, VMware that you can catch the trends and make a lot more money.

Just MHO

[BENTON PIGGEE]

VOO

[sigpooie]

hpil   and cstu, but my fav right now is any canadian based MJ operations, from medical groups to farms. The fat mining guys are pushing it.

[PEtrader]

Don't try and time the market buying individual stocks, unless you do it for a living. 

Listen to these others, build a portfolio using some vanguard index funds.


I do this for a living. 

Scary ass hell that the largest holding in that one is American Realty Capital.  I used to compete against them, and they are shady.

[rzrbackramsfan]

Anyone else?

What do you guys think about CSCO?

.

I have a question on cisco, what is their seven year average net income? 

Kkr pays an 8.5% dividend for somebody looking at dividends now.

[AstroHawg]

I'd find a good deal on a piece of rental property and use it for a down payment. 

Not for everyone, but it's a decision I'm glad I made 5 years ago.  Started with one, and now have 10 with two of them being apartments. 

I have never had really good luck with stocks.  If the old saying "what goes up must come down" is true, we are in for one helluva stock market correction.

[The Hogfather]

I'd find a good deal on a piece of rental property and use it for a down payment. 

Not for everyone, but it's a decision I'm glad I made 5 years ago.  Started with one, and now have 10 with two of them being apartments. 

I have never had really good luck with stocks.  If the old saying "what goes up must come down" is true, we are in for one helluva stock market correction.

Not sure I have the time to manage any rental properties.  Also not sure I want the headache that can come with those investments.

Have you had issues in that regard?

[AstroHawg]

Not sure I have the time to manage any rental properties.  Also not sure I want the headache that can come with those investments.

Have you had issues in that regard?

You bet.  That's why not everyone does it.  I guess I'm a borderline slumlord, but that's the best kind to be.  Low risk, moderate headache, moderate reward.  Plus you have something tangible, even if it's the land. 

If you don't have time, don't even think about it.  Just throwing it out there as an alternative to the stock market, which I do not play with (burnt!)

[The Hogfather]

You bet.  That's why not everyone does it.  I guess I'm a borderline slumlord, but that's the best kind to be.  Low risk, moderate headache, moderate reward.  Plus you have something tangible, even if it's the land. 

If you don't have time, don't even think about it.  Just throwing it out there as an alternative to the stock market, which I do not play with (burnt!)

Thanks for the feedback.

[rzrbackramsfan]

Property management companies are a good route.  I've found lots of deals where the difference between rent and principal is about 250 a month.  Property mgmt would be around 70, so that's 180 a month off around a 17k investment - 70k house with 3k closing costs.  That's like a (180x12)/17k dividend yield, not to mention the principal, interest tax shield, and house appreciation you'll get.  Propert tax is cheap, around 350 a year, and as far as repairs and vacancies, my parents own a prop mgmt company and I used to work for them, repairs are not that common (get one with a good roof though) and they're cheaper with a prop management firm and vacancies are low.  Their firm is in Springfield mo whicj is where I'm pulling my numbers from.

Even more fun is this, you're probably a business student or business minded person, I challenge you to this, if you don't have the 17k, find a partner to convert through an llc and write a contract that covers every potential dispute you'd have.  Those are good skills to have. 

With your other 1500 after you do the real estate, try to hit a home run.  All in on deeply in the money 1 year options on a leveraged volatility index.  That would be an EXTREMELY sensitive bet on volatility and then choose the index.

That's around my strategy anyways. I'm going to probably manage it myself though.  And on the options I've never used this myself, but before you buy a put or call, check out this thing called the put call parity on investopedia.

[rzrbackramsfan]

Whoa that was long, and I'm on my iPhone,  so yea I know it's tough to read I'm sorry.

[rzrbackramsfan]

You bet.  That's why not everyone does it.  I guess I'm a borderline slumlord, but that's the best kind to be.  Low risk, moderate headache, moderate reward.  Plus you have something tangible, even if it's the land. 

If you don't have time, don't even think about it.  Just throwing it out there as an alternative to the stock market, which I do not play with (burnt!)

Haha idk how slummy, but I've norticed high risk high reward.  You could buy a house for 40k or 10k down and it'll probably rent for 450-500 which is just an absolutely ridiculous return, but somebody might get murdered at it or a meth lab etc... I want to buy one of those so bad and have my parents manage it but they won't.

[twistitup]

Id do my research and invest in the most cutting edge vaporizer company out there....smoking of all kinds is trending down - vaporization is blowing up / a healthier alternative- it is here to stay. Tobacco smokers and herb smokers are basically using the same devices.

Yes, regulations are on the way for the liquid compounds  but this will only make he vaporizer industry more legit. Too bad Storz / Bickel is not publicly traded - they are the best....but there are others. Focus on a cpamy that makes the pen - it's portable and people love it.