10-08-2014, 10:53 PM
(10-08-2014, 08:55 PM)Dividend Watcher Wrote:(10-08-2014, 04:59 PM)Joey Batz Wrote: The ETF idea was just a hedge against, well, myself. I'm rapidly learning, but I'm still in the learning phase nonetheless.
That is perfectly understandable. When you are faced with such a steep learning curve, and really it's not that bad, you tend to want something to give you a sense of security. Hell, I'm still learning.
Of this list, tell me which ones will be out of business or teetering on it in 20 years:
COP/CVX/XOM/JNJ/BDX/PG/CL/GIS/KO/PEP/GE/EMR/MMM/UTX/T/VZ ?
Maybe the oils will have to adapt but I bet so will the others.
That's why we often mention core companies in our portfolios. I think any of the above, if you buy with a P/E less than 20 (and for some that's a little high), will still be here 20+ years from now even if you don't read a single word about them in the interim. On top of that, you'll most likely have made money whether you reinvested the dividends or used them for other purchases. But that's me.
The other factor is your own temperment. If you need an ETF, bond fund or money market fund to enable you to sleep at night, then that's what you need to do. The worst thing is to be nervous and take an adverse action (like selling at the bottom) to mess up your plan. Had to edit this -- the worst thing you can do is listen to me, the former is probably the 2nd worse thing to do.
Haha, no your advice is good. Honestly, I'm not putting any of my money into funds, for the reasons of 1) The S&P 500 is so high right now; and 2) I'm nowhere near as good at analyzing funds as I am with individual stocks (which I'm no master at either, but still learning and learning quickly). There are other reasons, of course, but those are the main two.
I'd still recommend ETF's for a friend of mine who wants to invest and just doesn't have the time for me to sit down with him and teach him how to invest, provided he's not OK with me handing him a list of stocks and telling him to invest in those. They're probably the best thing for the "know-nothing investor" as Warren Buffett put it.