Author Topic: Individual stocks I own  (Read 2410 times)

theolympians

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Individual stocks I own
« on: January 26, 2018, 10:42:53 AM »
Hello, I have a basic understanding of investing. I own a handful of individual stocks among various ETFs. Some were recommended to me by a financial advisor. He now recommends selling some of the holdings of the stocks to re-direct the funds into other investments. The stocks are: IBM, John Deere, Express Scripts, Fortis, and Suncor Energy. Any thoughts on long term (5 year) outlook on the stocks? Any reasons to increase holdings of any?

VoteCthulu

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Re: Individual stocks I own
« Reply #1 on: January 26, 2018, 11:16:37 AM »
This is not the best forum for getting advice on buying individual stocks. My advice is to sell them and invest the money according to your IPS in low cost index funds.

RWD

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Re: Individual stocks I own
« Reply #2 on: January 26, 2018, 11:43:21 AM »
Dump it all into index funds
http://jlcollinsnh.com/stock-series/

anisotropy

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Re: Individual stocks I own
« Reply #3 on: January 26, 2018, 12:20:12 PM »
Hello, I have a basic understanding of investing. I own a handful of individual stocks among various ETFs. Some were recommended to me by a financial advisor. He now recommends selling some of the holdings of the stocks to re-direct the funds into other investments. The stocks are: IBM, John Deere, Express Scripts, Fortis, and Suncor Energy. Any thoughts on long term (5 year) outlook on the stocks? Any reasons to increase holdings of any?

I will comment. Out of the ones you mentioned, Suncor is the only one I looked into and one that we hold directly, SU.TSE.  Despite the world's shift away from Oil, suncor's long term prospects are ~ok for now, at least in my view. It's one of the few profitable Canadian e&p comps through out the boom and bust cycle. Cashflow has been good, same with financial health. Growth and ROE are probably going to be a touchy subject going forward, due to secular changes.

We got it back in Feb 2016 when we timed the broad market bottom (luck mostly) as the whole energy sector was melting down, it is pricey now but could go higher if the boom lasts.

I will also comment on Fortis, I looked into it back in early 2017. My concern at the time was that in a rate rising environment, utilities stocks tend to underperform, even if the companies themselves do well. :|

Generally, most people will do better in the long run from going the index/passive route.

theolympians

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Re: Individual stocks I own
« Reply #4 on: January 26, 2018, 12:33:31 PM »
I have a 403(b) exclsively in index funds. My Roth has another index fund, and the stocks I mentioned. Most of my investments are in funds, not individual stocks. There is more risk in indivudual stocks, but I can live with that.

boarder42

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Re: Individual stocks I own
« Reply #5 on: January 26, 2018, 12:34:05 PM »
Dump it all into index funds
http://jlcollinsnh.com/stock-series/

2nd

how much are you paying this financial advisor to give you poor suboptimal advice - i bet if you took him out of the picture you'd be make way more money and you wouldnt be worrying about which stocks you own b/c you own them all.

anisotropy

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Re: Individual stocks I own
« Reply #6 on: January 26, 2018, 12:42:45 PM »
I have a 403(b) exclsively in index funds. My Roth has another index fund, and the stocks I mentioned. Most of my investments are in funds, not individual stocks. There is more risk in indivudual stocks, but I can live with that.

Since you are American I assume your SU is listed on NYSE. If so and the boom lasts, your SU will outperform the Canadian counter part by a wide margin, heck, it might even outperform the S&P. For that to happen, WTI needs to top 80 for at least 6months+

YoungInvestor

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Re: Individual stocks I own
« Reply #7 on: January 27, 2018, 11:00:49 AM »
How much capital gains are imbedded in the stocks?

If they're not significant, I would dump everything in index funds.

Financial.Velociraptor

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Re: Individual stocks I own
« Reply #8 on: January 27, 2018, 12:31:13 PM »
Express scripts is losing their biggest customer (who is also suing them for billions).  They provide a service that no longer makes sense thanks to widespread computerization.  In fact, many hospitals and insurance companies are beginning to insource the work.  I think low enough of ESRX that I hold shares short.  Don't really know the other tickers.

Bicycle_B

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Re: Individual stocks I own
« Reply #9 on: January 27, 2018, 12:58:28 PM »
No opinion on the specific stocks, strong opinion regarding financial advisors.  Few provide enough value that taking their advice is profitable compared to investing in low cost stock index funds. 

Since the bulk of your investments is already in index funds, and I am not opposed to owning individual stocks in the right circumstances, my main questions are:

What is your relationship to this financial advisor?  Is it professional, or is this some acquaintance sharing their opinion with you who happens to be a financial advisor?  Are you paying them for this advice? Are you buying the stock through a company of theirs?

Example: I have family members who bought individual stocks through Edward Jones.  They also bought various managed funds through Edward Jones.  They paid fees to buy or sell the individual stocks that were much higher than a self-service broker like E*trade, Ameritrade, etc (as in, fees higher by 10x or more).  They paid even higher amounts in the managed funds through annual fees.  Over time, it appears that more than 15% of their investments were eaten up by unnecessary fees.  Hence, my strong opinion is that the main question isn't whether a fraction of your portfolio is individual stock vs mutual funds, it's what fees are you paying.

Here's a basic article on how to get tolerably low fees buying individual stocks.

https://www.nerdwallet.com/blog/investing/how-to-buy-stocks/

Re stock picking, I recently read a post by an MMM member who picked them for several years, beat the market by 2% per year and recently announced he was quitting that because it wasn't enough $/hr for him.  I think it was someone who is FI, sorry I can't remember who.

Here is an interview and book about stock picking that is supposed to be good.  Full disclosure, the book author is an acquaintance of mine.  The book is on my read-this-year list.

http://www.thinkadvisor.com/2017/06/01/how-value-investor-gary-smith-made-millions

For the record, I support the MMM portfolio of Vanguard index funds (2 parts stock, 1 part bonds) as the default portfolio for MMM readers.  I just assume that if a person wishes to spend their time studying individual stocks and buying them instead of index funds for the stock portion, it can be done with reasonable odds of not losing money if you learn enough.  Good luck in your learning adventures and congratulations on being an investor with the guts to include equity in your investments.
« Last Edit: January 27, 2018, 01:01:39 PM by Bicycle_B »

Mighty-Dollar

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Re: Individual stocks I own
« Reply #10 on: January 27, 2018, 02:22:36 PM »
Some were recommended to me by a financial advisor. He now recommends selling some of the holdings of the stocks to re-direct the funds into other investments. The stocks are: IBM, John Deere, Express Scripts, Fortis, and Suncor Energy. Any thoughts on long term (5 year) outlook on the stocks? Any reasons to increase holdings of any?
Google "efficient market hypothesis". Stocks are always fairly priced. Everyone always has access to the same information about companies and the economy as everyone else. To think that Mr. Advisor has magical stock picking powers is madness. Predictably even Wall Street mutual fund managers cannot beat the indexes. What does that tell you? That Mr. Advisor is trying to make money off of you from asset management fees and / or transaction fees. Buy index funds and only index funds. Cut Mr. Advisor loose.

davisgang90

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Re: Individual stocks I own
« Reply #11 on: January 28, 2018, 04:15:23 AM »
I put a small amount of my IRA into a brokerage account years ago and bought a few stocks for fun. 

Over the years, I've played around, bought and sold. 

Overall, the amount has tripled since I started roughly 17 years ago, so not a great return.  Currently it is all in a few shares of Amazon that are doing quite well.

My lesson, index funds set and forget are the way to go for me!


Silverado

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Re: Individual stocks I own
« Reply #12 on: January 28, 2018, 08:31:26 AM »
We have semi-small positions in abot a dozen stocks. A few came from MO splitting off PM, Kraft, Mondelez.
PG, DE, HSY, SBUX, KO, KR, MSFT, and two lovely blocks of GE. All base positions have been in portfolio for over ten years, and the most recent purchase was six years ago. We don't trade, we don't play. We buy and hold.

I expect these to go into a donor fund sometime in the next couple decades. These make up right around 4% of our portfolio. There's another 3% in two active mutual funds in taxable from almost twenty years ago. When we see a correction, I'll swap them into VTSAX where the rest of our taxable bucks are. Didn't know enough in the last recession to go to lower cost index funds.

I enjoy the individual stocks. They aren't doing much to overall portfolio, and I get a kick out of watching the history since we have dividends being reinvested (yes, in taxable, yes it could be a pain, but that's where donating should help a bit).

So we will hang on to them. Even if (when?) one of the companies goes bankrupt, that will also be interesting to actually see a holding value just go away. I'll be a tad cranky, but the rest of portfolio gets all the fresh cash which is about the same amount per year right now as we have in individual stocks, so the percentage should just keep decreasing anyway.