12-16-2014, 08:44 AM
I would start with an ETF that reflects my favorite theme. For instance VIG, DVY, SDY are all solid dividend funds. The funds give instant diversification and holdings provide a nice list for future consideration. So you get an instantly diversified basket of stocks, stocks which you can begin to get familiar as you prepare for the eventual purchase of some individual names. VIG is an example of a dividend growth ETF: has very low expenses of only 0.1%, has very familiar names in the top ten (JNJ KO PEP IBM WMT XOM QCOM UTX CVS MMM), and gives a yield of about 2%. There are other ETF's that focus on higher yield, world wide diversification, country specific exposure, or most any theme in which an investor may be interested.
Anyway, my suggestion to to start out diversified with an ETF pick, then gradually enrich some of the positions in the ETF by buying a few shares of some of its favorite holdings. Go very slowly, and learn as much as you can about the companies before taking much of a plunge. Along the way you will learn lots more about sectors, about specific companies, about different investment vehicles. There is so much to learn. What is an ETF? What is a CEF? What is a growth stock versus value or income stock? What are mlp's, REITS, BDC's? The amount of info is overwhelming. So go slow, keep it simple, and learn one little bit of the market at a time. IMO, starting with the proven big cap dividend growth stocks is about as sure a step as a novice could take.
Anyway, my suggestion to to start out diversified with an ETF pick, then gradually enrich some of the positions in the ETF by buying a few shares of some of its favorite holdings. Go very slowly, and learn as much as you can about the companies before taking much of a plunge. Along the way you will learn lots more about sectors, about specific companies, about different investment vehicles. There is so much to learn. What is an ETF? What is a CEF? What is a growth stock versus value or income stock? What are mlp's, REITS, BDC's? The amount of info is overwhelming. So go slow, keep it simple, and learn one little bit of the market at a time. IMO, starting with the proven big cap dividend growth stocks is about as sure a step as a novice could take.
Alex