I'd like to buy $1K or $2K of 5 or 10 different individual stocks...putting a few eggs into a lot of baskets.

I'm retired, 55, and since we need some kind of a time frame, I will say that I would have no interest in drawing from the account for 10, 15, or more years.

Now, what might be interesting to invest in specifically?

I have been in the market for a number of years, so I am comfortable with its many ups and sometimes extreme downs.

What would you buy?

Sue

I will check the holdings of some of the funds....Good place to start (for me anyway)

I'm not comfortable with tech stocks. I belonged to a small investing club. We doubled our money in no time b4 things adjusted and we broke up. I ended up with just a little more than I had started with a year b4...and a lesson was learned which did not cost me, luckily.
We made money (on paper).
We lost money (on paper).
I came out ok and wiser.

Thanks

Sue

Balloons go up and up ...

... and up some more, quit often.

And they usually come down, as well.

I do figure that Berkshire B, plus a lot of other stocks, have a long term trend upward.

Plus, for many, increasing dividend rates along the way.

But Berkshire B's big brother (30 times as big) ...

... hasn't paid a dividend ...

... since 1967.

One could have bought a share for about $12.00 in 1965 - and what must one pay for Big Brother now - about $90,000.00 somewhere?

A proviso, however - Warren Buffett, the genius behind the growth, is getting a bit long in the tooth. Who knows how much longer he'll be around to manage it? And whether his successors will be anything like as shrewd?

He recently turned over a good deal of his charitable assets to Bill Gates to manage, along with his own Foundation - I guess he likes the way Bill Gates and his advisors manage his.

Good wishes to you for (increasingly) skillful investing.

Nobody cares as much about your money as you (except some folks who'd like to transfer (some of?) it from your pocket into theirs.

ole joyful

Very few equity-based mutual funds have grown faster, long term, than the market averages ... in fact, some of them invest a substantial portion of their pool to buy a basket of stocks that do reflect the market averages.

They charge a managment fee, that in the U.S. is often about 1/5 or 1/6 of the gain - in Canada, it's more like 1/4 of it.

If one has a small investable account, perhaps it makes sense to use mutual funds, but with a larger amount of funds available for investment, or if one has a longer time frame, why not invest in individual stocks, yourself, and put the management fee into your own pocket?

There are some stocks out there that own a variety of companies, one being the Berkshire Hathaway B that has been referred to which recently increased from about $3,000. (at which level it had stayed fairly stable for a time) to about $3,200. per share, if I remember correctly.

Correction - that's $3,587., as of 4:02 p.m. Mon Nov. 6.

I am *not* crying any blues over that little piece of information (I have a fairly modest 3 shares).

Some find that buying solid, stable stocks with a good dividend payout record does well for them. Ones that have good prospects of avoiding becoming obsolete due to technical innovations, e.g. companies making buggy whips when people quit travelling by horse and buggy and started going around in autos.

Such quality stocks usually take less of a beating when the market goes down, as well.

Not only that, if one invests, say $10,000. to earn interest, the value of the asset does not grow.

Thus the rate of interest does not change substantially, long term - and you have no idea what interest rate may be offered at the end of the term guaranteed.

But I bought a stock 39 years ago for something over $4.00, paying about 6 cents to a dime annual dividend.

The stock price increased, including some drastic fluctuations, until now it can be sold for about $85.00.

And the rate of annual dividend has grown commensurately - it pays $2.80 per share, now.

Some stocks have increased their dividends annually, for 25 - 40 years, and a few for an even longer period, with a short space of no increase during that period, which knocks them out of the uninterrupted annual increase category - but most of us would be very pleased with our long-term result, I think.

P & G, Johnson & Johnson and Coca Cola were some that I heard referred to, recently, in such a category - I'm not sure of the exact data. Check them out for yourself.

In Canada, I pay a lot lower tax rate on those dividends (on Canadian stocks) than I'd pay if I earned interest (which is taxed at top rate).

Further, I haven't had to answer to the income tax folks regarding the increased value of the stock - and won't, until I either sell them (or die).

Don't plan to do either, this week or next.

When I sell, I deduct the amount originally invested.

Then pay tax, at regular rate on half of the capital gain - but I keep half of it, free of tax.

Which gives me a substantial proportion of the benefits gained by the guys who have invested heavily in tax-deferred retirement stuff (without the restrictions that they've faced, some of which have been relaxed in recent years).

But when the guys liquidate their tax-deferred retirement account, they pay tax on every dollar.

However - they invested before-tax money, say $1.000. and, after paying tax, I invested a substantially smaller figure, say $750.00. Which leads many advisors to claim that I'll never be able to catch up.

But suppose I borrow $200. or so (when the bank will agree to lend up to $350.) when I give them the asset that I bought with the $700. as collateral.

I pay a low tax rate on the dividends, use some of the dividends on the stocks that I own to help pay interest on the loan, so I am not out-of-pocket paying the interest on the loan. Whixch means, of course, that I'm getting a rather low current rate of return from my original investment.

Also, the interest that I pay on most loans for investment purposes is deductible, so I get a nice tax deduction.

Also - if you put your $10,000. into the bank 5 years ago, they paid you the agreed amlount of rent on the money in the meantime ... and now, if you want the money back, they'll give you ...

... precisely $10,000.

Which will buy quite a lot less than it would have, 5 years ago.

And on the $200. that I borrowed from the bank, I paid interest only ongoing (at a higher rate than they give you, of course - but they rented your dollar out about 8 times, so they're not doing too badly).

If I repay the bank now - I owe them exactly $200.00 - that'll buy somewhat less then it would have, 5 years ago.

So I gained more or less the value of inflation, as well. The guy who invests using dollars guaranteed not to shrink - they can't grow, either. S/he loses due to inflation.

But - as my stock price went up, say to $20.00 per share, the bank would be willing to lend me $10.00 (and I might feel comfortable borrowing about $5.00 - 6.00). But - don't forget, that's a larger amount than the original price that I paid for each share of the stock.

And I referred only to using the shares that I bought with my money as collateral.

I don't want to have the bank call me when share prices take a beating, saying that they need some cash, or more collateral ... today (tomorrow at the latest).

But I have those shares that I bought with the borrowed money to use as collateral, in case of need.

This system is *very* risky if one is using stocks where there's even a slight possibility that they may take a drastic temporary drop in price, which is even more true should that drop be permanent - for then you'd owe the bank a large amount, without possibility of being able to have collateral to back the loan, which might cause you to be forced to liquidate other important assets, e.g. your home. Or even, in the worst case, go bankrupt.

Hope these ideas help.

ole joyful

Buffett has always meant for the Berkshire stocks to be a long term investment. There are no splits and no dividends paid out for that reason.

I don't know what's going to happen when Uncle Warren passes the torch to Charlie Munger. I also don't foresee that happening any time terribly soon.

Berkshire A closed at a new high of 107200.00 yesterday and B shares at 3587.00. I only wish, as employees we would have been able to invest in Berskshire much earlier than we were through our 401k.

Thanks for the info - I appreciate it. I bought Berkshire B abvout 5 years ago for around $1,800. - so I'm doing no crying. Well - a little, maybe - it's in my retirement account! I should have switched it a while ago for equal value of something outside that doesn't grow as well.

I'm not a fan of our tax-deferred plans here in Canada, though about 95% (or more) of financial planners figure that they're the greatest thing since sliced bread.

Yes, one saves tax going in, so if I pay tax, then invest outside the tax-deferred stuff, a number of advisors say that I can never catch up.

But the dividends on Canadian stocks come to me at a much reduced rate of tax, which doesn't apply when one holds them in the plan.

And when I withdraw a Dollar from either the tax-deferred plan, or its successor that I must set up at age 69, with no more deposits and required annual withdrawals at increasing rates (to age 90 - level after that at 20% of ongoing annual balance).

As I outlined above - a stock that I bought nearly 40 years ago for slightly over $4.00 was worth $89.50 last Friday. I say "worth" ... but, as I used to say when I sold corn-fired heaters from a demonstraion trailer and someone asked what they were "worth", that I wasn't sure what they were "worth" - but we asked $1,895 for them (including short intake and exhaust pipes).

And I don't have to answer to the Canada Revenue Agency for that increased value, until I sell the stock (or die), but then I deduct my cost, and pay tax on only half of the capital gain. Which means that I achieved not only a substantial tax deferral, as did they, but substantial tax avoidance, as well.

I don't think that I can come out ahead, though, if I'm unwilling to do some borrowing in order to have a larger amount working for me through some of the intervening years.

As I outlined in my earlier post.

Which takes some knowledge and experience in order to avoid quite possibly getting burned - which I didn't want to happen in my own account, and most certainly did not for my clients.

Hope you're having an outstanding week ... it's raining here and rather chilly, so I'm glad your not "out standing" in that.

ole joyful

I like Nordstrom, not only shopping there....it's a dependable growth stock. Have it in my Roth, but not much else I'm crazy about.

Through American Funds I've had 10% growth over the past year & expect better this next.

Sharlee

Since I had lost so much on my own in the past I feel secure with this particular person.

Sharlee

No doubt you'll be selling those stocks/mutual funds one day.

At that time, no doubt you'll need to calculate what capital gain your investment has developed, for income tax purposes.

Your cost is not only the amount that you invested originally, but includes the amount of each dividend that was reinvested throughout the years. No doubt you've been declaring that dividend income annually, as you've gone along. If you haven't it's more than likely that you should have (I'm not conversant with the ins and outs of the U.S. tax system).

If so, it's important that you record each amount as it is reinvested, as you go along, so that you'll be able to calculate the capital gain easily when that asset is liquidated.

Good wishes for increased knowledge about wise use of money, as the months and years go by.

ole joyful

Chemocurl: Did you ever check out Nordstrom (JWN) stock? Has had a good run since last time on this site. Just about ready to unload other individual stocks in my Roth & put more into Nordys. It's that stable & continuous growth. Anybody still buying Starbucks?
Thanks,

Sharlee

That stock that I said was worth $85.00 recently has recently gone over $100.

And I heard, a couple of days ago, that they are going to raise their dividend about the $2.80 that they pay now.

Not about to buy more stocks now (except a couple of new stocks of local companies that I like, possibly).

Market looks to high, and overdue for a larger correction than took place last week.

ole joyful

They increased the annual dividend to $3.08 (from $2.80 last year, $2.60 at end of '04). That's over 18% increase in 2.5 years.

And the dividend is taxed at a much lower rate than I must pay on interest earnings.

ole joyful

Sharlee, what you and many heard about GOOG when it IPO'd
was all the experts "warning" the retail customer about buying Google at its IPO price of $85. Many of these same "pros" are recommending it at $500 . IMHO, what they were really telling the retail investor back then was "Don't you dare buy it before we do".

Look at Citigroups recommendations on Cablevision. They had investors selling it at $28, and upgraded it from "sell" to "Hold" at $36.

The best thing I did years ago, was to fire my broker from Smith Barney. He had me sell TXN for HD and KMart!!

I'd be leery about buying any stocks right now, and certainly not listening to any "pros" out there. They seem to have a way of recommending stocks while they're riding high. As soon as the markets start to come down (and almost ONLY then) do they say "well they did get ahead of temselves"