Stock Investment

[Ed4252]

Is anyone experienced with the stock market that could possibly give me some advice? I plan on buying 5 long term stocks that I plan on holding onto for 20-40 years. Which stocks would you recommend? Do you suggest me looking at the mid-cap options that have huge potential or the large-cap ones that are stabalized. What's everyone's thoughts on Burger King, Hansens and Starbucks in the future?-does it have the potential to be just as good as MCD/KO/PEP?


Right now I'm thinking about getting Johnson and Johnson's, Proctor Gamble and ExxonMobile. Any other good options?

[RugbyD]

I wouldn't personally look at a stock for its 20-yr potential b/c that would imply that i have an opinion of 20 yrs from now.

In line with the type of companies you mentioned though, i generally like Sonic as a steady-growth play.

[Field]

First off, if you have a long term investment horizon like you apparently do, I would recommend a mutual fund or an ETF. Holding only a few particular stocks for 20-40 years is not a wise investment, you would be taking on way too much risk. If one of those stocks tanks or goes into bankruptcy you immediately lose a significant part of your investment.

[CheeseBeger]

Yes if you are just buy and holding might as well just buy the market. Reguardless you want to be well diversified here and picking five stocks you like won't really do that.

[chadlincoln]

I'm in two mutual funds:

CGM Focus Fund - CGMFX
Vanguard Global Equity - VHGEX

I'm happy with them.

[WhiteHot]

to Individual Stocks
to ETFs for Mutual Funds

[Coppermine]

:-t to Individual Stocks
to ETFs for Mutual Funds

That's a good point; if you're looking for a long term (20 to 40 years) investment, individual stocks probably would not be a very good way to go. You'll fare much better with an aggressive mutual fund than you would with stock in just a few companies. That's breaking the golden "never put all your eggs in one basket" rule when it comes to investing, even if it's a few baskets.

Diversifying your investments it's always the preferred financial advice. Speaking of, if you're serious about long-term investing, it would be well worth your while to consult a financial adviser at your bank or through a company like Ameriprise.

Individual stocks can be an excellent investment, but you need to stay on top of the market and be prepared to dump them if things go sour.

[Ed4252]

Thanks for everyone's response. So individual stocks wouldn't be a good idea even if it's only a portion of my portfolio like 30-50%??

Is there a way to evaluate mutual funds based on how much risk/growth they will have?

[Coppermine]

Thanks for everyone's response. So individual stocks wouldn't be a good idea even if it's only a portion of my portfolio like 30-50%??

Is there a way to evaluate mutual funds based on how much risk/growth they will have?

It might be fun to have some individual stocks as a part of a diverse portfolio. They're just probably not the best very long-term investment because the value of individual stocks are difficult to project.

A financial adviser would be the best person to talk to concerning the risk/gain attributes of individual mutual funds and investment packages. I know some banks, especially credit unions, often offer a financial advice services for free.

[CheeseBeger]

Thanks for everyone's response. So individual stocks wouldn't be a good idea even if it's only a portion of my portfolio like 30-50%??

The key idea to remember is whether it is 5% or 100% of your portfolio, having diversification is always better. Diversification is so popular because it allows you to have the same returns as buying a few individual stocks with a lower overall risk. So you get more bang for the risk you take on. There is always some "optimal" risk/reward combonation that you want to have, no matter what percentage of your porfolio it is.

Is there a way to evaluate mutual funds based on how much risk/growth they will have?

What I did was go to Vanguard and bought one of their "Target Funds." They manage these funds depending on what age catagory you are in and how long you want to hold onto the funds, which sounds perfect for you. They will then adjust the holdings of the fund as you get older (less international, less stock, more bonds).