Money Forum World

Ivko · Joined: 08 Nov 2007 Posts: 2115

Im thinking of investing in stocks, is it a smart idea to invest in same stocks as mutual fund holdings?
Hi,

Im a full time employee and can't use up too much time on stock research. Since Mutual money use up time and research in picking stocks, is it a smart idea to invest in the same stock picked by most money. as an example, money f1 f2 f3 usually picked stock S1, is stock S1 a good one to invest in?

Thanks
Parti

Noel · Joined: 08 Nov 2007 Posts: 2117

Not essentially. If that individual stock goes down, you lose money. If you invested in a mutual fund, the stock is a % of the total fund, so you may not lose any money. Investing in individual stocks is a high risk venture.

Wilfredo h. · Joined: 08 Nov 2007 Posts: 2149

Picking any single stock to invest in depending on a mutual funds holdings isn't sound practice.

Diana English · Joined: 08 Nov 2007 Posts: 2158

I have done what you mentioned before. It doesnt work all the time. but, use this technique as a means of shortlisting some of your stocks, then do more due diligence. Theres no shortcut to trading the markets.

Ivko · Joined: 08 Nov 2007 Posts: 2115

the key to investing overall is allocation of your money and diverifying. This way when an investment, or stock, is going down there's another kind of investment car to go up, counteract it and keep your in general portfolio making a steady profit. This thought procedure could deter you from investing in the same stocks as the ones in your mutual money. if they went up, youd be in great form, but if they went down, you be losing in both your mutual fund and your individual investment. looks more risk than its worth. stick to safer investmnet vehicles if you lakc the time for stock research, fixed earning etc.

Everett · Joined: 08 Nov 2007 Posts: 2104

If you can not use up much time doing stock research, then I propose that you invest in exchange traded money ETF that match your requirements. Finance is a good place to go to learn about ETFs and investing overall.

As for your particular question, some successful investors tried the technique that you propose but have said that the technique is only a good starting place for research. but, mutual money essentially purchase stock in big businesses and you could be better served to find smaller businesses that could do well over time.

The sites for the Motley Fool, Finance, Investors Business Daily and Zacks are places to do research.

Good luck.

Minnie Anderson · Joined: 08 Nov 2007 Posts: 2138

OH MY. I just happen to be trying to find an answer to a clitch in my email when I saw your question. I have been an investor for 35 years and helped my kids put together portfolios. don't know your age, but here is good advice. Start out and stay with high dividend paying stocks. as well, attempt and broaden among your trust and money. Mining, energy, real estate. If you may be able to, earning average by put a little money into you stock money and trust on a regular base. Here are a couple of really good ones, plus a great stock. CXW is a company that builds private prisons. A super winner, look it up. 10K put in five years ago could be 66K today. I'm not a big individual stock player, but his one is golden. For the most part, purchase a little of these big dividvend paying stocks. A A V, B I F, and P G H. If you're a young man, this advice will make you a rich man one day. Took me years and lots of different folio mgrs. to learn the power of High Dividend paying stocks. You have to do your on research on these, but you'll find them to be hard gold. Good luck and remember to add a bit more cash to them every month or as frequently as you may be able to. Plus, brokers only make money when you trade, so beware of there advice. I didn't start doing well with investing till I got rid of my brokers..After you make your 1st million, send me an email and I'll ask that you send a token of appreciation to my favorite charity..

Adan Wiley · Joined: 08 Nov 2007 Posts: 2107

No, if I wouldnt invest in the same stocks as the mutual money I hold. That could be like duplicating your investments. Its better to spread out the risk. Of course, S1 is just a small part of the mutual funds holdings but to best allocate you want to avoid duplication. If you have a mutual fund that invests in small cap businesses then you could decide to put other dollars into as example mid cap utility businesses. This is just an example to demonstrate that half of your research is done just by knowing what your mutual fund invests in. Once you know what it's are investing in you may be able to set a stock screener, with your other requirements, and be done in minutes.

Nona Tate · Joined: 08 Nov 2007 Posts: 2117

Institutional sponsorship can work for or against you. If a fund is building a position in a new stock, it's usually safe to front run them. If, on the other hand, theyve had it for a while and are decreasing the contact, you can be purchasing from them and will end up going against the tide or holding the bag.

Another disadvantage is the delay between a mutual funds buying/selling and reporting.

Sasha Pennington · Joined: 08 Nov 2007 Posts: 2143

stocksrus.instantecomthe

The best site I have found on the web.

Aisha Rush · Joined: 08 Nov 2007 Posts: 2158

Not really. Mutual money contain only systematic risk, so eliminating the effects of stock selection. A mutual funds risk and return depends only on the kind of stocks it holds e.g. big cap, small cap, value or growth, foreign or domestic, etc NOT the particular stocks it picks.

The best way to invest if you have little time is to use a fund of money which will broaden your money into some number of other fundamental money. You get contact to a large range of stocks and bonds in just one fund. Check out the LifeStyle and Target date retirement money from vanguard.com or fidelity.com. These two companies have a large selection of low cost money.

For more information on investing, check out my free downloadable book at invest for retirement.com

Aisha Rush · Joined: 08 Nov 2007 Posts: 2158

There is a good website called FundMojo which is depending on the idea you talked about to systematically produce most covered stocks from top money cross different sectors or with mutual fund ranking, it's useful to take a look and see if this approach works. I have found some good stocks through this.