Anyone uses Schwab Stock Slices?

[jnw]

I've been thinking I might take a portion of my money I'd otherwise put into VTI and hand picking certain S&P 500 stocks instead.

Schwab allows you to buy fractional shares of these companies commission free.

For example, VTI includes TSLA, AMZN and FB.  I don't care for these companies.  I also don't care for banking, healthcare and airlines.  I might buy banking stocks again after a huge crash, just before the government bails them out again due to this housing bubble.  I also think healthcare is way overpriced and don't support the drug prices they are charging.. I think the government will crack down on them, regulating them and stocks will drop -- so that's why I am not into healthcare.  Airlines for obvious reasons.. covid.. the unending covid pandemic.

I'm interested in a few stocks right now:  AAPL, BRK-B, WMT, MSFT, DLTR, LMT, ORLY etc.. I think all of these companies would fair well during inflation/recession.    Apple has always been my favorite company -- since the App store was announced in 2009 -- and they will only continue to grow larger and larger pulling more and more into their ecosystem.  Inflation won't affect Apple; they can freely charge more for their products with respect to inflation because people will still buy them.. there is no alternative to these people, including myself.

ORLY is like around $725 per share right now and so it'd be nice if I could buy like 1/4 share of it at a time.    I couldnt' afford $725 for one share. 

I might just do this with only 1/3rd of what I would of normally invested into VTI.    I'll know how I fair compared to VTI after a few years.  If I don't do as well say after 5 years, then lesson learned and I'll just move it back to VTI.

[jnw]

Are there any drawbacks to Schwab Slices?  Any hidden fees?  Seems like a good deal. Does it complicate tax returns with fractional shares? How about if I keep the fractions at like 1/2 1/4 1/8 shares?  That way I can eventually have a whole number of shares instead of fractional.

I guess this would allegedly be cheaper than buying VTI since there is no expense ratio.. no commissions etc.

[MustacheAndaHalf]

I you track a handful of stocks closely, then the annual shareholder vote makes you more like an owner.  If you max out Schwab's limit of 30 slices, you might find getting votes every week or two gets a bit annoying.
https://www.schwab.com/fractional-shares-stock-slices

Over the past 12 months, BRK-B has gone up +30%.  I bought shares last week under the mistaken impression it was like a value ETF with Warren Buffet as the active manager.  But I should have checked the P/E ratio before I bought - I'd prefer a stronger value tilt.  I'm actually going to sell my shares today.
https://www.morningstar.com/stocks/xnys/brk.b/trailing-returns

I think many newer investors think Buffet's "be greedy when others are fearful" applies to the -7% YTD drop in the market.  They might be looking at other retail investors, and seeing their fear, assume that's what Buffet meant.  I can't speak for Buffet, but I doubt he cares much about a -7% drop given his investing experience.

[jim555]

I've played around with the slices in the IRA.  Works well, no fees.  Created my own index of 200 stocks.  Since you are a direct owner you get corporate actions like splits, mergers and proxy votes.  Ended the experiment and closed them out. 

[jnw]

Giving it a shot because it seems fun and I like the following companies and think they will do well through inflation/recession perhaps. 

I am going against my investment plan which says to currently only invest in I-Bonds and Mortgage Payoff.. but it's only $490 and I'll do it just this once :)  Doesn't hurt to diversify a little.. maybe I might doing again next month for $490 as well.  But mostly I'll be just paying off mortgage I think after getting $10k in I-Bonds this year.

Today I have market orders for $70 each into the following S&P 500 companies for $490 total:

AAPL  Apple
MSFT Microsoft
WMT Walmart
DLTR Dollar Tree
ULTA Ulta Beauty
ORLY O'Reilly Auto Parts
AVGO Broadcom

I admit of all the above I know the least about AVGO but it looks good so throwing it in :)   I'll look more into this stock later.

I threw WMT in because I found out they own Sam's as well.  I've been switching from Aldi here and there to Sam's and WMT on certain products because the somes deals aren't as good compared to Walmart and Sam's.  Also I found out certain items I've been buying from Amazon are like 40% cheaper at WMT and Sam's.  Like I spent $14 on flour sack towels at Amazon and at Walmart they were like $8.50.  A restaurant style 10" nonstick fry pan is $15 at Sam's compared to $25-30 that Amazon wants.   So during this period of inflation where people are more careful about there money I see WMT doing more favorably compared to AMZN.  I'm not going to renew my Amazon subscription later this year.. it's $139 ridiculous.  Now they are charging sellers a 5% surcharge.  One reason Amazon did so well early on is they had an unfair advantage for years by not charging state sales tax, really hurting all the states' local brick & mortar businesses; they no longer have that.  I see why Jeff Bezos quit acting as CEO and launched himself into space lol. (But I realize a lot of AMZN's income is from their internet hosting / cloud services or whatever.. but I have MSFT for that.)

I was tempted to throw JNJ (Johhnson & Johnson) in but I generally hate Big Pharma. I think they charge too much in America for the drugs -- like $300+ for insulin compared to $35 in canada for the same drug.   Americans are getting charged ten times more.  Congress keeps threatening to tackle this problem, I don't know if they will or not or how much it will impact JNJ and Pfizer etc.. but I am not gonna risk it.

I am staying out of financial/bank sector because  I think there is a gigantic housing bubble and well we know what happened last time to the banks back in 2008/2009.  No thanks.   So that's why I am leaving out financial sector, but I don't know much otehr than I think there is a huge housing bubble.

I am avoiding the energy sector because it's just too volatile for me.  Who knows how the Russia invasion will end and how it will affect oil / energy prices.

I went through all the tech stocks in S&P 500 one by one and well AVGO stood out as well as AAPL and MSFT.  I don't care for Google or FB.

My guy likes O'Reilly better than Autozone because he thinks the parts are of a little better quality.   People will be fixing their existing cars more because they've become too expensive.

I'll probably add BRK/B next month to the slices.  For 8 stocks @ $60 each = $480.  I just thought BRK/B is a little bit above the moving average and it seems to be struggling a little compared to S&P 500 past few days.. So I'll give it one month then buy.  I already got a lot of BRK/B in my Roth IRA.  I buy BRK/B for the long term, but I just wanna wait until next month :)

Gonna keep my eye on KR (Kroger) as well.