How do you invest? Actively make own choices? or hire someone?

Bit of my own research and knowledge, coupled with the experience of a broker that I trust.

 

Motley Fool claims an index fund performs as well as any mutual fund. And there's no commission off the top either.

 

I work through a broker for buying and selling (2x/year, total cost $100). But I make all my own investment decisions. They send me data and make some recommendations, but I make all the final decisions.

Sachin

 

I leave all the decisions to the lil' lady, who works in the field.

In addition to retirement savings, we put a portion each month in a high-yeld bond fund (5-year return in the 9% range) and a couple of small stock funds.

 

I'm 25 and should probably take more risks but I put around 25% in US index funds the rest in mutual funds. I've mainly been investing in international mutual funds which have been doing pretty well over the past few years. Occasionally I'll put a grand or so on a stock if I get a good recommendation but those have been very hit or miss. I like to save and I imagine that I'll get more into trading stocks as I get older but right now just putting money away in mutual funds is building a good base. Unless I end up very wealthy I imagine that I'll want to manage my investments myself.

 

For equities, about 75-80% in index funds (maybe 20% of that figure in int'l equities, which are semi-managed in that the fund managers have to select the countries) and the remainder in the company I work for - that's it and I'm fine with that. The former has outperformed the latter over the past year but I'm bullish on my firm.

I avoid managed funds as much as possible.

 

I stay away from index funds. They perform well only in one market: an up market. I use the following strategies with varying degrees of success/pain:

1. Managed value funds, contrarian funds or funds focusing on dividend returns. If you can find a stock fund that made good returns after expenses (10%+ in 1997 and also in 2000/2001), I'd buy it.
2. Individual stocks that I perceive to be undervalued or out of favor (e.g., Pfizer).
3. Stock funds the focus on sectors or geographic regions (currently I have money in Europe stock fund which has had a great currency gain, but might dump soon ... recently sold Energy fund).
4. High-yield bond funds. Otherwise bonds are definitely off-the-table at the moment.
5. Stocks hedged by covered calls in an IRA (e.g., Sun Micro/VLCCF/GM).
6. My house.

All money not in a 401(k) is at Fidelity where the web site is good and there is a large variety of fund choices.

 

100% into a 401k managed by Fidelity through work. So far so good. I don't make changes without being informed. But I can't help but feel I could be doing better. Unfortunately, I don't make much money being that I'm the sole bread winner in the house. Still, I manage to sock away 10%, looking to boost it to 12%. But gas price increases have really hit us. Couple that with yet another sh!tty raise at work and I don't think I'll be able to afford the increase. Here's hoping I get a better paying job when I graduate this summer. Telecom sucks balls.

 

AMEX Financial Planner. She's making me 20% annually, very diversified between muni paper and equity funds, mostly PIMCO managed. That's just fine.

No way, no how am I going to do my own investing. I wouldn't do my own medicine, wouldn't represent myself in court, so why would I manage my own money? It's a traditional build-or-buy business decision for me: it'd cost me waaay more time than I have to run analyses on companies or funds, I'm not particularly good at it to begin with, and investing via hot tips on MSNBC sounds so much like playing the ponies with a subscription to the racing forum. If I can pay someone to do all of that for me, why the hell not?

 

Dollar cost averaging into an index fund is a brilliant and easy way for anyone to get rich. Half my monthly investment dollars go into Fidelity index funds, which have the lowest fees in industry. I don't fret about down markets. Instead I view it as buying shares on sale.

The rest of my retirement portfolio goes into actively managed mutual funds. Money outside of retirement accounts into individual stocks utilizing a buy and hold strategy. I'm also a fan of DRIPs, although the bookkeeping is a headache.

 

My family uses a series of advisors for our money. The Bank to which we belong has invested us in a VC firm and a PE firm and are doing quite well.
We have shifted to Growth funds away from value (as there isn't much value to be found right now) as the advisors and I are bullish on the economy right now. We generally don't trust the large securities and investment fund groups, preferring to go with smaller outfits.

 

Used to have an Amex advisor, and I made 21% a year, however the fees were ridiculous and they take way too much for maintenance fees. It was for that reason that I cashed out (yes the penalty was severe and it sucked). Now I just do my own investing and I must say that I feel very much in control and feel that Im doing much better knowing exactly where my money goes. You know as stupid as it may sound, Ive found out that I feel better when I do my own investing than when someone does it for me, and thus to me its more important to feel good than to feel uneasy and make a tad bit more.

 

For how long?

A lot of that stuff you could buy yourself, and forget it.

 

You sound like a broker.

Of course 'index funds' (S&P 5000, Total Market, etc) perform well in only one market- THEY ARE THE MARKET.

You realize it's also possible buy indexes in asset classes that tend to zig when the market zags, and vice versa?

 

I have a no-load mutual fund & several stocks that I have acquired over the years. Each year I splurge & put 5% of my money in to a stock recommended by the Barron's Roundtable. Half the time that has paid off nicely & half it hasn't. But it keeps me from churning my other stuff. I also have a 401 at work that lets me invest in a small list of funds, mostly Fidelity.

 

* Do all my own investing.

* ~90% equities/%10 bonds

* Heavily diversified in the market itself:

* All in mutual funds which are split between 401ks, IRA's and regular brokerage accounts (Schwab)

I try and fill up the proverbial tic/tac/toe +1 board of the following 10 items

Large Cap Growth
Mid Cap Growth
Small Cap Growth
Large Cap Blend
Mid Cap Blend
Small Cap Blend
Large Cap Value
Mid Cap Value
Small Cap Value
International

I adjusted my portfolio years ago to lean more to the value side of things as I am more conservative in my approach

I have been thinking of adding real estate to my portfolio, but even though I don't consider my home an investment, the simple fact that I own it outright and it is worth ~$600k now makes me weary of investing anything more in real estate.

Andy

 

************ brokers and fund managers. Most are ignorant leeches. I manage my own portfolio of stocks and double my money about every 3 years (26% annual return). Learn to pick your own stocks, use protective stops, and get in the game. There is nothing a fund manager can do that you can't do yourself. If he had the secret to the Holy Grail, he wouldn't be a fund manager. He'd be trading full-time and getting rich.

 

Hi Mario,

When you track your return, are you just tracking your investment growth or your overall portfolio growth (investment growth + savings)?

By using Karl's wonderful excel formula, I was able to calculate my overall portfolio growth to be on average 22.4% over the past 6 years.

But much of this "growth" is due to savings and investment, and I have yet to figure out how to just seperate the investment growth from the overall growth.

I guess in way I really only care about overall growth since that is truely the money I own but it would still be interesting to figure out just the investment growth itself on average across the various ira's, 401k's and brokerage accounts we have.

Andy

 

Andy,

If you are filling out all the style categories, you have effectively created a total stock market index fund. But I would guess that your efforts are significantly more expensive than the ETFs or mutual funds that are out there with very low expense ratios.

 

That is a fair point except that while I try to diversify across the board, everything is not balanced (ie it does not represent the total market).

I pay only a small amount of attention to expense of my funds. I only care about what the total return is after tax. That way its all fair to compare.

I find too many people who get caught up in expenses, taxes, loads etc ignore the fact that even a fund with higher expenses, taxes and loads, in the end can be better than a fund that has lower expenses, taxes and no loads.

In general I am doing significantly better than the total stock market has over the past 6 years.

Andy