Process of buying stock (AMZN)

[King Stilts]

Hello Mustachians,

You might not like me for suggesting or creating this post, but hear me out.

I'm 25 and from Seattle, WA.  I've been sticking to the MMM plan for 2 years now, just in that time span growing a 12k IRA and 25k employer matched 401(k).

My interests have recently been directed away from the broadness of Target Date index funds to the intimacy of individual stocks, specifically Amazon.  Getting certified through Amazon Web Services is what set me up to be in the position I'm in now, and really think the sky is the limit for Amazon and want to personally own a brick just for the hell of it.  It's still a damn good investment, right?

I just want to know that since I've been thinking about opening a taxable account recently in addition to my Vanguard Roth IRA, is there anything keeping me from buying individual Amazon stock through Vanguard once my taxable brokerage account is funded?

Thanks for any help, I appreciate any and all comments.

[aschmidt2930]

There's nothing stopping you. I think Amazon is a solid investment.  The future is never certain, but they seem to be building a business built for the future.  I love what they're doing with logistics. They'll be delivering products to your door in a couple hours soon, and it'll put the final knife in the big box stores imo.

[Rubic]

OP: I'm not going to try to talk you out of investing in Amazon.  However, I'd like to point out something that's often overlooked in investing in individual stocks.  You've identified AWS as an outstanding, world-changing IT service.  I'd agree with you.  My entire business has been running on AWS for the past 5 years and I've even contributed some modest open source code to the cloud stack.  We've switched from having to maintain a room full of servers and sysadmins to DevOps running everything from our laptops. AWS provides us with virtually unlimited processing power and unlimited redundant storage capacity.

However, just because AWS is a game-changer in IT, doesn't make Amazon a no-brainer investment.  There's already a high expectation of AWS's growth baked into the price of Amazon's stock.  It could be that even with its anticipated growth, the market is still underestimating the net returns 5+ years hence, but you're essentially betting against the market consensus.  Can AWS grow >30% year over year for the next 5 years?  Perhaps.  I haven't a clue.  But I know I'm not smart enough to project with any certainty that it will exceed its current growth expectations -- and moreover exceed them to the level that would justify the investment risk.

A great business does not make a great investment.  Price is what you pay, value is what you get.

[Jack]

There's also the argument to be made that because your business is associated with Amazon's and because you live in a real estate market with prices substantially driven by Amazon, overweighting AMZN is even riskier for you than it is for normal people.

Anyway, to answer your actual question:

I just want to know that since I've been thinking about opening a taxable account recently in addition to my Vanguard Roth IRA, is there anything keeping me from buying individual Amazon stock through Vanguard once my taxable brokerage account is funded?

Everybody recommends Vanguard because they have very cheap index funds/ETFs, but that's not what you're buying. Take a look at Vanguard's brokerage fee structure -- they're not the cheapest discount brokerage. Instead of buying through Vanguard, you should consider shopping around for the cheapest brokerage (carefully considering not just trade commissions, but all fees). Robinhood, for example, currently has zero trading commissions.

[Scandium]

If you're just buying some amazon shares once I'd just do it in a taxable account with vanguard, to keep everything in one place. If you plan to do it constantly (not that I think you should, I'd argue you shouldn't) then look for a cheap broker. You can buy amazon shares for free through loyal3 for example.

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