Comments on: Are single stocks too risky? http://www.bluntmoney.com/are-single-stocks-are-too-risky/ Tue, 06 Jan 2009 22:02:10 +0000 http://wordpress.org/?v=2.3.2 By: JoeTaxpayer http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39192 JoeTaxpayer Sat, 12 Jul 2008 13:09:48 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39192 I agree with Kyle's first remark. Dave's audience is not sophisticated enough to buy individual stocks. The corollary to this is that if you have the skill and interest to create and maintain the 10 stock portfolio, you are well beyond having any interest in Dave. Joe I agree with Kyle’s first remark. Dave’s audience is not sophisticated enough to buy individual stocks.
The corollary to this is that if you have the skill and interest to create and maintain the 10 stock portfolio, you are well beyond having any interest in Dave.
Joe

]]> By: Brandon http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39137 Brandon Fri, 11 Jul 2008 06:35:02 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39137 i agree with several people's comments....DR's target-audience are 'debt-addicts'. With a limited amount of time each day to reach this audience, he has to "genericize" things.....thus, what you write about. As you become more financially-savvy, you have to adjust his advice/information to fit your needs and desires. His core-tenants though, are great when it comes to financial basics for the masses. Interesting post! i agree with several people’s comments….DR’s target-audience are ‘debt-addicts’. With a limited amount of time each day to reach this audience, he has to “genericize” things…..thus, what you write about.

As you become more financially-savvy, you have to adjust his advice/information to fit your needs and desires.

His core-tenants though, are great when it comes to financial basics for the masses.

Interesting post!

]]> By: Moneymonk http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39045 Moneymonk Wed, 09 Jul 2008 22:53:55 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-39045 I think he's smart to give that advice given his audience mostly are concrened with debt. So be safe he just give a generic way to invest. I will tell anyone to invest in growth mutual funds or index funds that are not educated of investing. However I own VISA stock, because I did my homework on it. But I will not recommend that to everyone DR is playing the safe route I think he’s smart to give that advice given his audience mostly are concrened with debt. So be safe he just give a generic way to invest.

I will tell anyone to invest in growth mutual funds or index funds that are not educated of investing.

However I own VISA stock, because I did my homework on it.

But I will not recommend that to everyone

DR is playing the safe route

]]> By: kitty http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38967 kitty Mon, 07 Jul 2008 17:13:32 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38967 " Another thing to consider in this arena is that the fees will usually be higher when investing in individual stocks as opposed to mutual funds." Not necessarily. If you use a discount online broker like TDAmeritrade or eTrade than you pay a fixed price of, $10 a trade. Which means that buying and selling a 100 shares of a stock that cost, for example, $40 - a pretty average transaction, would be .5% - not that high. Sure, it'll be more for a more expensive stock, but people often buy more than 100 shares of those. Also, unless you are trading, you probably don't buy and sell every stock you own every year. So at any given year, the percentage of your total portfolio value may be lower. Additionally, when you buy and sell individual stocks you don't have "capital gain distributions". You only pay taxes when you actually sell stock with a gain. With mutual funds in a taxable account, you sometimes pay taxes on money you don't even see. ” Another thing to consider in this arena is that the fees will usually be higher when investing in individual stocks as opposed to mutual funds.”

Not necessarily. If you use a discount online broker like TDAmeritrade or eTrade than you pay a fixed price of, $10 a trade. Which means that buying and selling a 100 shares of a stock that cost, for example, $40 - a pretty average transaction, would be .5% - not that high. Sure, it’ll be more for a more expensive stock, but people often buy more than 100 shares of those.

Also, unless you are trading, you probably don’t buy and sell every stock you own every year. So at any given year, the percentage of your total portfolio value may be lower.

Additionally, when you buy and sell individual stocks you don’t have “capital gain distributions”. You only pay taxes when you actually sell stock with a gain. With mutual funds in a taxable account, you sometimes pay taxes on money you don’t even see.

]]> By: Kyle http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38896 Kyle Sat, 05 Jul 2008 18:08:27 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38896 I think for the purposes of Ramsey's target audience (financially unsophisticated people), his advice is probably good. It's probably a bad idea to encourage everyday Joe to buy stocks based on a hunch without doing any research. Of course, an experienced investor could definitely buy a diversified basket of stocks as well as any mutual fund manager. The problem is that once you hold more than 4 or 5 individual stocks, it becomes almost a fulltime job keeping up with everything. I think for the purposes of Ramsey’s target audience (financially unsophisticated people), his advice is probably good. It’s probably a bad idea to encourage everyday Joe to buy stocks based on a hunch without doing any research. Of course, an experienced investor could definitely buy a diversified basket of stocks as well as any mutual fund manager. The problem is that once you hold more than 4 or 5 individual stocks, it becomes almost a fulltime job keeping up with everything.

]]> By: Hokie Hokie Hi http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38708 Hokie Hokie Hi Mon, 30 Jun 2008 21:33:19 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38708 If you buy individual stocks and seek diversification at the same time, then you are dilluting your own returns. Diversification = less risk = less return. Therfore, by the time you average in transaction costs you usually come out behind what a good mutual fund can do. They can conduct thousands of transactions at a much smaller cost than an individual. If you buy individual stocks and seek diversification at the same time, then you are dilluting your own returns. Diversification = less risk = less return. Therfore, by the time you average in transaction costs you usually come out behind what a good mutual fund can do. They can conduct thousands of transactions at a much smaller cost than an individual.

]]> By: Natalie http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38703 Natalie Mon, 30 Jun 2008 19:41:55 +0000 http://www.bluntmoney.com/are-single-stocks-are-too-risky/#comment-38703 Looking at the track record for each mutual fund or single stock is a good idea, too. Looking at the track record for each mutual fund or single stock is a good idea, too.

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