Investment Advice for Squilly

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
Ok, Squilly I know I've given you some grief in the past, but I'd like to share with you some ideas about investing. I have been pretty successful using a particular strategy that someone shared with me about 10 years ago. For the most part, it has worked well for me. I starting using this in my IRA in 2006 and since that time my account is up 142%.

So, to get started, I want to ask you a few questions:

1. How old are you?
2. Do you have an online brokerage account, ie. TDameritrade, Scottrade, E-Trade, etc.
3. How much do you have to initially invest?
4. What are your goals for this money?
 

Squilly

macrumors 68020
Nov 17, 2012
2,258
3
PA
Ok, Squilly I know I've given you some grief in the past, but I'd like to share with you some ideas about investing. I have been pretty successful using a particular strategy that someone shared with me about 10 years ago. For the most part, it has worked well for me. I starting using this in my IRA in 2006 and since that time my account is up 142%.

So, to get started, I want to ask you a few questions:

1. How old are you?
2. Do you have an online brokerage account, ie. TDameritrade, Scottrade, E-Trade, etc.
3. How much do you have to initially invest?
4. What are your goals for this money?
19
TD Ameritrade
$2000, at first invested in 10 stocks, narrowed it down to 3 - DDD, KKR & KR.
Make more money
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
19
TD Ameritrade
$2000, at first invested in 10 stocks, narrowed it down to 3 - DDD, KKR & KR.
Make more money
Ok, good.

A couple of clarifications:

1. Of the $2,000 how much is in cash or is it all invested in the 3 stocks you listed?
2. Making more money is a pretty generic goal. What do you want to use the money for? A car, cheap liquor & cheaper women, pay off debt?
 

Squilly

macrumors 68020
Nov 17, 2012
2,258
3
PA
Ok, good.

A couple of clarifications:

1. Of the $2,000 how much is in cash or is it all invested in the 3 stocks you listed?
2. Making more money is a pretty generic goal. What do you want to use the money for? A car, cheap liquor & cheaper women, pay off debt?
It was all invested. Now it's about $2400 with $120 in cash over ~15 months.
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
It was all invested. Now it's about $2400 with $120 in cash over ~15 months.
Ok, if I'm understanding you correctly, you started with $2,000 and your account is currently worth $2,520 ($2,400 in stock + $120 in cash). That is a 26% gain in 15 months. That is awesome!

What about the second question: What do you want to do with the extra money you make?
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
Yes. I'll probably be adding $10k of Apple in the near future.
So, at the current price $10,000 would get you 16 shares of Apple. If you do that, then 80% of your portfolio will be in just one stock. That is a very risky position to be holding. Basically, you are betting everything on Apple to succeed. Now Apple has a pretty good track record, but not always. If you did that in September 2012 when Apple was around $700, then you still wouldn't be back up to that price.
 

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Squilly

macrumors 68020
Nov 17, 2012
2,258
3
PA
So, at the current price $10,000 would get you 16 shares of Apple. If you do that, then 80% of your portfolio will be in just one stock. That is a very risky position to be holding. Basically, you are betting everything on Apple to succeed. Now Apple has a pretty good track record, but not always. If you did that in September 2012 when Apple was around $700, then you still wouldn't be back up to that price.
Right. But I'm betting that because of their track record and the fact that they'll be down to below $100 to reach more investors and get a hefty dividend AND releasing a larger iPhone, it'll shoot back up.
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
Right. But I'm betting that because of their track record and the fact that they'll be down to below $100 to reach more investors and get a hefty dividend AND releasing a larger iPhone, it'll shoot back up.
That could all very well happen. Or it could be a huge flop and the stock will tank. Basically, you are trying to "time the market." As most experienced investors will tell you, that is not always an easy thing to do.

Now in fairness and full disclosure, I do own Apple stock and it is about 30% of my IRA. Even that position is too high. However, I bought it for the same reasons you want to: the dividend and the stock split. After the split, I'll probably sell off some of it.
 

Squilly

macrumors 68020
Nov 17, 2012
2,258
3
PA
That could all very well happen. Or it could be a huge flop and the stock will tank. Basically, you are trying to "time the market." As most experienced investors will tell you, that is not always an easy thing to do.

Now in fairness and full disclosure, I do own Apple stock and it is about 30% of my IRA. Even that position is too high. However, I bought it for the same reasons you want to: the dividend and the stock split. After the split, I'll probably sell off some of it.
Fair enough. If I buy, I'll sell a bit after the split and see what happens. Don't expect it to dip though.
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
Fair enough. If I buy, I'll sell a bit after the split and see what happens. Don't expect it to dip though.
I don't expect it to dip either, but it could.

What I recommend to most of my friends is invest money in the entire market or a segment of the market and not just one particular stock. This is what mutual funds and ETFs do. It is a basket or collection of stocks that covers a market or segment of the market.

I first learned and tried this strategy using an ETF called PowerShares QQQ. It trades under the ticker symbol QQQ. It is tech centered EFT. Its top 10 holdings are:

Apple 13.17%
Microsoft 8.21%
Google, Class A 3.72%
Google 3.68%
Amazon 3.52%
Qualcomm 3.33%
Intel 3.27%
Gilead Sciences 2.98%
Facebook Class A 2.98%
Cisco 2.94%

The top ten holdings account for 47.8% of the entire holdings of QQQ, and there are a total of 101 stock holdings in the entire fund.

http://portfolios.morningstar.com/fund/holdings?t=QQQ&region=usa&culture=en-US&ownerCountry=USA

Are you with me so far?
 

Squilly

macrumors 68020
Nov 17, 2012
2,258
3
PA
I don't expect it to dip either, but it could.

What I recommend to most of my friends is invest money in the entire market or a segment of the market and not just one particular stock. This is what mutual funds and ETFs do. It is a basket or collection of stocks that covers a market or segment of the market.

I first learned and tried this strategy using an ETF called PowerShares QQQ. It trades under the ticker symbol QQQ. It is tech centered EFT. Its top 10 holdings are:

Apple 13.17%
Microsoft 8.21%
Google, Class A 3.72%
Google 3.68%
Amazon 3.52%
Qualcomm 3.33%
Intel 3.27%
Gilead Sciences 2.98%
Facebook Class A 2.98%
Cisco 2.94%

The top ten holdings account for 47.8% of the entire holdings of QQQ, and there are a total of 101 stock holdings in the entire fund.

http://portfolios.morningstar.com/fund/holdings?t=QQQ&region=usa&culture=en-US&ownerCountry=USA

Are you with me so far?
I understand. At first I had 10 or 11 stocks in my portfolio split between $2000. I had 3 biopharmaceuticals, all of which I pulled out before they all became successful. I was all around the market before I stayed with my current three.
 

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,533
8,156
Colorado
I understand. At first I had 10 or 11 stocks in my portfolio split between $2000. I had 3 biopharmaceuticals, all of which I pulled out before they all became successful. I was all around the market before I stayed with my current three.
Good.

I hate to say it, but I'm booked for the rest of the day and evening. But tomorrow, we'll get into what I want to share with you.
 

nebo1ss

macrumors 68030
Jun 2, 2010
2,735
1,242
Squilly with the gains you made in the last 18 months. You should be giving investment advice to ucfgrad.
 

Peace

macrumors Core
Apr 1, 2005
19,466
3,831
Space--The ONLY Frontier
So, at the current price $10,000 would get you 16 shares of Apple. If you do that, then 80% of your portfolio will be in just one stock. That is a very risky position to be holding. Basically, you are betting everything on Apple to succeed. Now Apple has a pretty good track record, but not always. If you did that in September 2012 when Apple was around $700, then you still wouldn't be back up to that price.
Remember AAPL is splitting 7-1 in June.