Recurring Investment Strategy

[mizzourah2006]

Originally Posted by broadbill

Stocks are a different animal because you can analyze them individually and set buy/sell points based off of your analysis.

You can't really do that with mutual funds because their NAV is based upon ALL of the stocks in that fund; all stocks gains are diluted by the loses (and vice versa) so "timing" a buy based on the aggregate performance isn't really possible. In other words, what exactly would you look at to time a buy...when half of the stocks in the fund are going up? What does that really mean?

Buying mutual funds is boring because you buy in when you can buy in, and allow stocks within that fund increase the value over time. Boring but it is productive.

Oh ok, I see what you are saying. The 2 mutual funds I most recently bought were sector mutual funds, so they are a little different, but I definitely get what you are saying.

I have a little bit of both, about 45% in stock and 55% in mutual funds.

[CouponJack]

Originally Posted by mizzourah2006

I see what you are saying.

Is this how you approach stocks too? Just pay what the rate is (if you think the P/E is in line with competitors/industry and all other fundamentals look good) rather than placing a limit order to save .5-1% on your initial purchase?

I'm just curious, I'm pretty new to investing, but it has always interested me and I have a quant. background, so following the stock market has become a natural hobby to me this past year.

I never understood the fascination with picking individual stocks...there is no evidence that picking individual stocks will give the average person behind a computer (us) a higher return. I always advocate allocating money in a portfolio of tax efficient low cost mutual funds tailored to one's personal pucker factor....

If you stick to that plan and rebalance accordingly, and obviously ignore the daily noise, you will outperform the overwhelming majority of investors and traders...

I don't need to finish first or hit a homerun. Investing is supposed to be boring and not take up alot of your time...

However, if one is loaded to the hill w/individual stocks and it'll cause a huge tax hit selling them, then that's a different story...