What are y'all investing in long term? 10-20 years.

[manlymatt83]

I get that the move is to not invest in individual stocks, and instead do ETFs. However, most of my IRA is ETFs and a few mutual funds... I have some individual stocks, like some shares of JBLU. However, on a lot of stock forums I see things like "What's a really risky stock that might make me a millionaire?". Nothing in between....

I'm not looking for that thing that could go up 10,000% over the next year. But I was reading an article on fool.com and people were saying companies like Johnson & Johnson would have turned $10k into $95k if you had bought 20 years ago (more than double the returns of the S&P). What are those investments of today?

Are they things like AMZN, NFLX, AAPL? Are they still the J&J type stocks? Any input would be helpful!

 

[DaveSimmons]

>> people were saying companies like Johnson & Johnson would have turned $10k into $95k if you had bought 20 years ago (more than double the returns of the S&P). What are those investments of today?

And picking the winning lottery numbers for 10 Powerball jackpots would make you a billionaire

Just remember how well actively managed mutual funds do against the S&P 500. Those people are paid hundreds of thousands to millions to work on this full time, have access to ten times as much data as you have, and have the best analysis software money can build and they still fail.

I stick with index ETFs and avoid the gambling . It's boring but safe, requires zero effort, and has much lower risk. Of course you give up the chance at the "big score" if you beat the house, but I can live with that. Quite well in fact based on my current nest egg.

If you want to gamble, treat it as a hobby separate from your real investments, and budget for it like you would vacations or some other hobby like golf. Consider that money lost when you pick some stocks. And remember that fool.com is a site for gamblers not real investors (or True Scotsmen ).

 

[manlymatt83]

>> people were saying companies like Johnson & Johnson would have turned $10k into $95k if you had bought 20 years ago (more than double the returns of the S&P). What are those investments of today?

And picking the winning lottery numbers for 10 Powerball jackpots would make you a billionaire

Just remember how well actively managed mutual funds do against the S&P 500. Those people are paid hundreds of thousands to millions to work on this full time, have access to ten times as much data as you have, and have the best analysis software money can build and they still fail.

I stick with index ETFs and avoid the gambling . It's boring but safe, requires zero effort, and has much lower risk. Of course you give up the chance at the "big score" if you beat the house, but I can live with that. Quite well in fact based on my current nest egg.

If you want to gamble, treat it as a hobby separate from your real investments, and budget for it like you would vacations or some other hobby like golf. Consider that money lost when you pick some stocks. And remember that fool.com is a site for gamblers not real investors (or True Scotsmen ).

I think that's the thing -- most of my IRA (90%) is mutual funds & ETFs. But as I'm still young, I'd love to pick a few individual stocks (or more riskier ETFs) to maybe take a small gamble on. Are you saying these types of long terms gambles should be done outside the IRA?

 

[DaveSimmons]

There might be tax advantages to doing the trading in the IRA instead of a regular brokerage account, I haven't looked into that. On the other hand, the fees for buying individual stocks in it might be higher than in a regular account, wiping out any advantage.

I meant that 100% of your IRA amount (and more) should go towards safe investments, even if you do it with a split like this:

IRA - $2,000 safe, $3,000 gambling (if there was a tax advantage that was better than any extra fees)
Regular brokerage account - $3,000 safe to make up for the gambling in the IRA

Also, you should not gamble with any of the growth from the safe investments, or borrow from it to make up for gambling losses. That's spending the rent money in Vegas because you "know" your luck will change soon.

If you want to gamble it should be with extra money beyond your $5K/year. Even then you're more likely to win if you just put that extra money into index funds, aka the house.

 

[dullard]

I think that's the thing -- most of my IRA (90%) is mutual funds & ETFs. But as I'm still young, I'd love to pick a few individual stocks (or more riskier ETFs) to maybe take a small gamble on. Are you saying these types of long terms gambles should be done outside the IRA?

While you can invest in individual stocks in many IRAs, it is often frowned upon. This is because individual stocks are often a gamble, and you shouldn't be gambling with your long term survival (which is basically what an IRA is intended for).

Do your gambling outside of an IRA, so that in the worst case scenario, you still have a nice safety cushion in your IRA to fall back on. Also, if your individual stock gambles lose money, you can get tax savings from the losses.

 

[Exterous]

I get that the move is to not invest in individual stocks, and instead do ETFs. However, most of my IRA is ETFs and a few mutual funds... I have some individual stocks, like some shares of JBLU. However, on a lot of stock forums I see things like "What's a really risky stock that might make me a millionaire?". Nothing in between....

I'm not looking for that thing that could go up 10,000% over the next year. But I was reading an article on fool.com and people were saying companies like Johnson & Johnson would have turned $10k into $95k if you had bought 20 years ago (more than double the returns of the S&P). What are those investments of today?

I wouldn't spend a large chunk of your investments on individual stocks as it doesn't seem to be a good main vehicle to increase your wealth when just having an index fund is pretty darn good.

That said, if we're talking about outside an IRA:

I think its generally a bad idea to think about holding something for 10 to 20 years. If it happens thats one thing but don't become so enamored with a company that you don't sell when it comes time. Its also tempting to buy into a company over concerns that you'll miss out. But there are a lot of good companies out there and, while the market is generally efficient, its not always rational over short periods of time. What I do is set buy orders, good until cancelled, on companies that meet a variety of factors and set that buy price at a decent amount below market value. The factors are along the lines of: large market cap, Revenue growth over 0% in 4 of last 5 years, Free cash flow growth over 0% in last 4 of 5 years, Return on equity greater than 15% for 5-7 years and a strong preference for well performing dividend companies.

While waiting my money sits in index funds, bonds and money market accounts and if an order fills I have a few business days to make a transfer from the various accounts or use new money to cover the purchase. I typically make only a few purchases a year. Last year it was Lowes @ $64.44, Apple at $93.76, Netflix at $93 (all still held) and Gilead ~$85 and sold at ~$74. I have orders in place for JPM, Amazon, Walmart and Cat but I don't expect them to fill any time soon. (But then I didn't expect the market to over react on Lowe's purchase of Rona either). I don't spend time chasing down the next hot thing because my index funds are tracking the overall market while I wait for a strong company being sold at a large discount and index funds still make up the majority of my share purchases in a year

Those people are paid hundreds of thousands to millions to work on this full time, have access to ten times as much data as you have, and have the best analysis software money can build and they still fail.

Their goals and constraints rarely line up with your own though. If they make good decisions, their profile rises, more money floods into the account and has to be spent whether the climate is right for it or not. Same thing with withdrawals or fund allocation requirements. That said I think those opportunities are few and far between so index funds make the most sense 99% of the time, especially if you are investing periodic sums of money by calendar date

 

[jlee]

VTSAX is my choice.

 

[Cappuccino]

this thread is nerdy as f im outta here

 

[Herr Kutz]

children

 

[Svnla]

I follow some old dude's rule of 90% of investment money in a low-cost index fund and 10% in a low-cost bond fund.

That old dude has a strange name of Warren Buffet.

 

[jpiniero]

Ammo?

 

[Red Squirrel]

With costs of living that keep going up, it leaves little to no room for investments. I'll do that once the house is paid off but for now I just have a small amount of money going towards RRSPs. It's not much, I have maybe 20k into it so far, which is barely enough to live for a year lol.

I also have stocks but I consider that more play/gambling money, I put a bit towards it but it's not money that I depend on as I could very well lose it all. But I could also get lucky and strike it rich if one of the stocks does go super high.

 

[snoopy7548]

I follow some old dude's rule of 90% of investment money in a low-cost index fund and 10% in a low-cost bond fund.

That old dude has a strange name of Warren Buffet.

Same here. Both my 401k and IRA are 90% stocks (mix of US and international) and 10% bonds; set it and forget it for 15-20 years. I also have a taxable investment account comprised of 100% US stocks. I've never had much of an interest (pun not intended) in playing around with individual stocks, although I have thought about it.

 

[OverVolt]

You have to look beyond the numbers to find the universal truths.

J&J is a family run company. Such a large family run company is rare. Because they aren't so beholden to stockholder whims, wall street bravado, and at the mercy of msnbc talking heads, they pretty much "just do the right thing" which is why they are the market leader in alot of consumer goods. People will always need band aids, cleaning supplies, Tylenol, etc.

Amazon IS Jeff Bezos. If Jeff Bezos became sick, died, hit his head really hard and changed personalities, so would Amazon. Amazon is basically an altruistic retailer. They just constantly re-invest in themselves. Its almost like a club retailer. Hey you shop here, you benefit, we benefit, everybody benefits. They have built a huge, efficient infrastructure for cloud computing, product distribution/warehouses, shopping interface, etc. Its crazy you can order a physical copy of a movie and get the software copy too. It'll never be profitable and it'll never stop growing. The only way it'll become a mature corporation is if Jeff Bezos sells the company off. Jeff Bezos. Er.. I mean Amazon.

I could go on. Just give me a company and I can probably explain it.

 

[manlymatt83]

You have to look beyond the numbers to find the universal truths.

J&J is a family run company. Such a large family run company is rare. Because they aren't so beholden to stockholder whims, wall street bravado, and at the mercy of msnbc talking heads, they pretty much "just do the right thing" which is why they are the market leader in alot of consumer goods. People will always need band aids, cleaning supplies, Tylenol, etc.

Amazon IS Jeff Bezos. If Jeff Bezos became sick, died, hit his head really hard and changed personalities, so would Amazon. Amazon is basically an altruistic retailer. They just constantly re-invest in themselves. Its almost like a club retailer. Hey you shop here, you benefit, we benefit, everybody benefits. They have built a huge, efficient infrastructure for cloud computing, product distribution/warehouses, shopping interface, etc. Its crazy you can order a physical copy of a movie and get the software copy too. It'll never be profitable and it'll never stop growing. The only way it'll become a mature corporation is if Jeff Bezos sells the company off. Jeff Bezos. Er.. I mean Amazon.

I could go on. Just give me a company and I can probably explain it.

Okay NFLX and SNAP


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[Kalvin00]

.

 

[JEDIYoda]

I have been investing in Condoms all my life!!!

 

[rcpratt]

You have to look beyond the numbers to find the universal truths.

J&J is a family run company. Such a large family run company is rare. Because they aren't so beholden to stockholder whims, wall street bravado, and at the mercy of msnbc talking heads, they pretty much "just do the right thing" which is why they are the market leader in alot of consumer goods. People will always need band aids, cleaning supplies, Tylenol, etc.

Amazon IS Jeff Bezos. If Jeff Bezos became sick, died, hit his head really hard and changed personalities, so would Amazon. Amazon is basically an altruistic retailer. They just constantly re-invest in themselves. Its almost like a club retailer. Hey you shop here, you benefit, we benefit, everybody benefits. They have built a huge, efficient infrastructure for cloud computing, product distribution/warehouses, shopping interface, etc. Its crazy you can order a physical copy of a movie and get the software copy too. It'll never be profitable and it'll never stop growing. The only way it'll become a mature corporation is if Jeff Bezos sells the company off. Jeff Bezos. Er.. I mean Amazon.

I could go on. Just give me a company and I can probably explain it.

Thank you, oh great company analyst.

 

[purbeast0]

As someone who doesn't know anything about investments and stuff, I have just done my 401k and Roth IRA with the "target" retirement funds for the most part.

Well I just found out (from another thread on this forum actually) that I make too much to contribute to a Roth IRA.

As someone who makes too much to contribute to a Roth IRA, what would the logical next step be as far as what to invest into that is good for the long term?

 

[KB]

I'm not looking for that thing that could go up 10,000% over the next year. But I was reading an article on fool.com and people were saying companies like Johnson & Johnson would have turned $10k into $95k if you had bought 20 years ago (more than double the returns of the S&P). What are those investments of today?

Are they things like AMZN, NFLX, AAPL? Are they still the J&J type stocks? Any input would be helpful!

There is a reason why the website is called fool.com...

If I knew who the next J&J would be, I would be running the most successful hedge fund ever. Hindsight stock picking is easy, but knowing the future is impossible. This is why you diversify with ETFs and don't try to pick the best names unless you enjoy being wrong from time to time.

 

[Elganja]

As someone who doesn't know anything about investments and stuff, I have just done my 401k and Roth IRA with the "target" retirement funds for the most part.

Well I just found out (from another thread on this forum actually) that I make too much to contribute to a Roth IRA.

As someone who makes too much to contribute to a Roth IRA, what would the logical next step be as far as what to invest into that is good for the long term?

i'm somewhat in the same boat, just don't have the time and energy to research and invest individual stocks

with my 401k and HSA, i invest in the vanguard target 2045 funds which has served me well thus far

with my extra savings, i invest in half in VFIAX and half in VTSAX

 

[overst33r]

VTSAX is my choice.

+1

For most people, a target retirement fund that they set and forget is a good choice. They will capture market returns and mostly minimize their expenses while maintaining simplicity so even a 8 year old can understand it.

 

[purbeast0]

i'm somewhat in the same boat, just don't have the time and energy to research and invest individual stocks

with my 401k and HSA, i invest in the vanguard target 2045 funds which has served me well thus far

with my extra savings, i invest in half in VFIAX and half in VTSAX

When you say you "invest" your savings in it, what exactly does that mean? Like I'm a total noob at doing stuff other than 401k and Roth IRA. I'm using Vanguard to handle my Roth IRA.

Would I just set up some other type of account on Vanguard and select those target funds? What type of account would this be called?

 

[JEDIYoda]

I would use a Condom IRA account that spreads out my investment between more than one company. That way if one fails I am not totally invested in just that one company! Presently I am invested in Trojan and Durex and LifeStyle and also Magnum!!

 

[overst33r]

When you say you "invest" your savings in it, what exactly does that mean? Like I'm a total noob at doing stuff other than 401k and Roth IRA. I'm using Vanguard to handle my Roth IRA.

Would I just set up some other type of account on Vanguard and select those target funds? What type of account would this be called?

I believe he is referring to a taxable brokerage account at Vanguard. The money invested here has already been taxed through your payroll and earnings will be taxed as well depending on your tax bracket. You want to max-out your tax advantaged accounts (401k, tIRA or rIRA, HSA, etc) before investing in a taxable account.