08-18-2014, 11:53 AM
I plan to do exactly what EricL said, $1000 per position until I'm comfortable with the level of diversification I've built up. It seems like most dividend growth investors only invest in stocks (big surprise...). I've only ever invested in stocks which is probably why this style of investing works for me, but I am curious about these other types of investments. Off topic, but with DRIPS I tend to fall on the side of I would rather choose where I reinvest my dividends. I know I have to pay broker fees that way, but for now it allows me to combine fresh capital with dividend income to add new stocks. At some point I will start adding to current positions, but I think I'll be more comfortable if I choose what company at what price.
It seems like, if my goal is to build a diversified portfolio, I should avoid paying someone else and do it myself. But what about an ETF like JNK (I literally know nothing about this other than it invests in bonds, pays a distribution and takes it's cut via the expense ratio)? If I get exposure to bonds and it pays me to hold the position would I want to add more diversification that way? I wouldn't expect much growth out of a position like that, so I guess it wouldn't fit with most peoples strategy around here. I suppose the argument could be made that there are better places to put my limited capital, so why invest in it if I have a better option.
It seems like, if my goal is to build a diversified portfolio, I should avoid paying someone else and do it myself. But what about an ETF like JNK (I literally know nothing about this other than it invests in bonds, pays a distribution and takes it's cut via the expense ratio)? If I get exposure to bonds and it pays me to hold the position would I want to add more diversification that way? I wouldn't expect much growth out of a position like that, so I guess it wouldn't fit with most peoples strategy around here. I suppose the argument could be made that there are better places to put my limited capital, so why invest in it if I have a better option.