mutual funds and individual stock question

Hello, and pardon me, if this question is too simple, but I am
still in the dark on some issues, as I am fairly new to investing, and have
taught myself a lot reading many books, and mags, and newspapers as well as
internet sites.
I am pretty well versed in mutual funds, and my 401k plans, and
various other investments I have going.
The question is, I have never yet paid attention, to investing
directly in the market through stocks.
Since I am young, I make sure all my investments contain at least
80 percent in stock and hopefully closer to 90 percent mix. Am I
making a mistake, by not learning about investing directly in stocks, and
not only investing in stocks through my various funds, and company sponsered
annuities, which invest in funds?
Should a well rounded long term investment portfolio, always
contain individual stock?
I dont wish to have investments, which I need to spend a
considerable amount of time each day studying the market, as time is a
commodity, that I dont have much access of. All my investments are directed
towards retirement which is still at least 30 or more years away.

Much regards for any insights.

Re: mutual funds and individual stock question

Stick with funds if you don't have the time. Funds give you professional
management. They offer diversity and the good funds will provide
satisfactory returns.

If you're young you should have most of your money in stock funds. Don't
ignore international funds.



"J.Lef" <> wrote in message
news:Nc9cf.4721$
> Hello, and pardon me, if this question is too simple, but I am
> still in the dark on some issues, as I am fairly new to investing, and
> have taught myself a lot reading many books, and mags, and newspapers as
> well as internet sites.
> I am pretty well versed in mutual funds, and my 401k plans, and
> various other investments I have going.
> The question is, I have never yet paid attention, to investing
> directly in the market through stocks.
> Since I am young, I make sure all my investments contain at least
> 80 percent in stock and hopefully closer to 90 percent mix. Am I
> making a mistake, by not learning about investing directly in stocks, and
> not only investing in stocks through my various funds, and company
> sponsered annuities, which invest in funds?
> Should a well rounded long term investment portfolio, always
> contain individual stock?
> I dont wish to have investments, which I need to spend a
> considerable amount of time each day studying the market, as time is a
> commodity, that I dont have much access of. All my investments are
> directed towards retirement which is still at least 30 or more years away.
>
> Much regards for any insights.
>

Re: mutual funds and individual stock question

"J.Lef" <> wrote in message
news:Nc9cf.4721$
> Hello, and pardon me, if this question is too simple, but I am
> still in the dark on some issues, as I am fairly new to investing, and
have
> taught myself a lot reading many books, and mags, and newspapers as well
as
> internet sites.
> I am pretty well versed in mutual funds, and my 401k plans, and
> various other investments I have going.
> The question is, I have never yet paid attention, to investing
> directly in the market through stocks.
> Since I am young, I make sure all my investments contain at least
> 80 percent in stock and hopefully closer to 90 percent mix. Am I
> making a mistake, by not learning about investing directly in stocks, and
> not only investing in stocks through my various funds, and company
sponsered
> annuities, which invest in funds?
> Should a well rounded long term investment portfolio, always
> contain individual stock?
> I dont wish to have investments, which I need to spend a
> considerable amount of time each day studying the market, as time is a
> commodity, that I dont have much access of. All my investments are
directed
> towards retirement which is still at least 30 or more years away.
>
> Much regards for any insights.

It's a personal choice. Individual stocks have more potential to make or
lose money, depending on how well you choose. They are generally more
volatile (price change) than a diversified stock fund.

If you are willing to do the homework and study some companies to see if you
can pick some with good potential and sound finances then I would say go for
it. If you are not interested in spending your time analyzing companies
(and following them over time) then stick with mutual funds.

Just my opinion,

-herb

Re: mutual funds and individual stock question

J.Lef wrote:
> The question is, I have never yet paid attention, to investing
> directly in the market through stocks.
> Should a well rounded long term investment portfolio, always
> contain individual stock?

Looking over a demographics research network, they present a study of
40,000 equity investment accounts in a brokerage, where a vast majority
of investors are considered un-diversified within a high correlation
for inconsistancy taken on as risk.. Investor diversification
constructs are likely to be misconstrued within strategy correlations
between stocks. Diversification among low income investors are least
diversified.

In another paper, Federal Reserve Bank employs a (1) sensitivity test
on how a given group of stocks will be impacted by large movements in
financial variables - movement without reason, a first approximation
impact of broader market dynamics. A (2) scenario test is then
devised for portfolio context over common portfolio historical events.
The portfolio's financial focus is important to formulate scenarios.
Some scenarios include the U.S. stock market declines in October 1987,
the Asian financial crisis of 1997, the financial market fluctuations
surrounding the Russian default of 1998, and financial market
developments following the September 11, 2001, terrorist attacks in the
United States.

Interesting ideas, given an unlikely portfolio focus to begin with by
way of contrast -

As of Sept 30, 2005, the Vice Fund had returned 4.87 per cent
year-to-date; 21.91 per cent over 1-year; 20.08 per cent over three
years (average annual return); and since its inception, an average
annual return of 17.55 per cent. Its portfolio consisted of 25.21 per
cent gaming stocks, 23.53 per cent defence stocks, 21.90 per cent
alcohol stocks, 15.88 per cent tobacco stocks, and 13.48 per cent
"other."

The "other" category includes such stocks as Playboy Enterprises,
Harley Davidson, Rick's Cabaret International Inc (operator of a chain
of strip clubs), and Guitar Center Inc (the biggest U.S. retailer of
electric guitars, amps and other equipment for playing the devil's
music). [Hmmm ... had GC in my notes with Netflix awhile ago, odd
-flash]

They own 14 casino and lottery stocks, eight booze companies, one
aerospace and defence company, and seven tobacco companies.

The Vice Fund trades under the symbol VICEX, and as of Oct. 28 had a
net asset value of $15.70 (U.S.) a share. Its 52-week high is $16.92,
its 52-week low $13.79. It has a MER of 1.75 per cent. Minimum initial
investment is $2,500. The fund has been hammered pretty hard since
mid-September, according to Bloomberg, and it is now down 6.55 per cent
over the last three months, and only up 0.55 per cent year-to-date.

Re: mutual funds and individual stock question

"J.Lef" <> wrote in message
news:Nc9cf.4721$
> Hello, and pardon me, if this question is too simple, but I am
> still in the dark on some issues, as I am fairly new to investing, and
> have taught myself a lot reading many books, and mags, and newspapers as
> well as internet sites.
> I am pretty well versed in mutual funds, and my 401k plans, and
> various other investments I have going.
> The question is, I have never yet paid attention, to investing
> directly in the market through stocks.
> Since I am young, I make sure all my investments contain at least

If you decide to go into individual stocks, by all means investigate
dividend reinvestment plans (DRIPs). In addition to bypassing the sales
charges and management expenses of mutual funds, these plans also bypass the
brokerage fees of buying and selling individual stocks.