Buying (1) share of APPL a waste?

close2reality said:
since my last post I liquidated the AAPL share as it as pointless and done for novelty, and I have $4000 waiting to be invested in either a mutual fund or an index fund. What's holding me back from committing right now is how long it's been a bullish market.

It would suck to dump 4K into a S&P500 index fund and watch it tank for the next 3 months. I would rather give the market some time and begin my investing portfolio ahead of the game...which is at the beginning of a new bull run.

Whether the market corrects or not in the near future...thats way above my head. What I do know is history tends to repeat itself in general and 6-7 years seems to be the cycle.
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Six days ago you knew little of the stock market, fees and how it works. Today you think you can time investing at the start of a new bull run. Yikes.
 
close2reality said:
Question...

Do I (A):

Buy into an S&P Index Fund now, minimum initial investment of 3K and contribute 100/month moving on.

or

Do I (B)

Start out in a starter fund with a couple hundred dollar initial investment and contribute a couple hundred a month until I have accumulated enough to step up to the S&P Index. This would also allow me to play a cautious hand of cards with all the correction threats currently looming.

Ideally, I want to just get into the market and invest the 3K so I can get started in the S&P now, but of course not if the wiser approach would be (B) given the situation latley.

Any advice?
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It really comes down to how risk averse you are. Do the math and decide how your portfolio would look with several scenarios. What would your outcome be if the market increased 2% over the next 3 months, then tanked by 25%, to come back 1.5% per quarter for the next several years?

If you think the market is high and likely to tank, then just dollar cost average by doing automatic investments and keep some cash on the sidelines to dump in after a big dip. On the other hand, if you're looking at the long term (you probably should be), then the dips don't matter as much and you could put it all in and continue adding as time goes on.

When I really got started, I had a ~$4k windfall and started an account with Edward Jones investing the entire amount at once.
 
rdowns said:
Six days ago you knew little of the stock market, fees and how it works. Today you think you can time investing at the start of a new bull run. Yikes.
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Reading profusley has been my friend. I haven't scratched the surface, but know a lot more than I did the first day I posted this thread.
 
wct097 said:
Dollar-cost-averaging.

I liquidated about $10k from the individual stock I owned and am having my investment account automatically invest $200 or $250 every couple weeks in SPY. My thought is that it'll invest about $5k over the next two years spreading out the buys and mitigating the risk of a large drop wiping out the investment. If the market does drop, I'd double or triple up on the automatic investment.

edit: It's tough to time the market. You may sit on the sidelines too long or miss the bottom or jump in too late.
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This is excellent advice.
 
Arran said:
I disagree. It's a great way to learn, with very little risk.

OP - Consider it $125 for training and you'll probably get the money back!

Just watch it every day, read the financial press assiduously and it'll all start to make sense.
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That's true, it is a decent way to learn. It's just not a good way to turn any real profit.
 
I also may go a more diverse route with ETF's using the same 3K to start.

- Vanguard Total Stock ETF (60%/17 shares roughly)
- Vanguard International Stock ETF (20%/9 shares roughly)
- Vanguard Bond ETF (20%/7 shares roughly)

This would give me a diverse stance.

The question I'm trying to figure is...am i going to have a higher gain with dollar cost averaging within a mutual fund or infrequent larger lump sums with ETF's.
 
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I also am a little confused with the bid-ask spread.

Down the road years from now after a few years of dollar cost averaging and building up my portfolio...if i ever had to liquidate my portfolio...is the spread something I need to be concerned about?
 
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