Why do you buy individual stocks?

[anycee]

Interested in hearing from anyone on here who buys individual stocks rather than ETFs. Why do you buy stocks?

[Bullseye]

I'm an indexer, but I can see the attraction for some in stock picking. It can be fun to research companies and cherry pick ones you deem undervalued, then watch them appreciate.

With the rather large amount of time required to do this properly, though, you'd have to look at stock picking as a hobby, not a true way to increase wealth (versus indexing). For people who do it and don't get enjoyment from it, you'd be much better off in most cases to buy the index, forget about it, and get a part time job instead.

[halbbitter]

I think if you have enough money to buy the portfolio of ~60 stocks in "full lots", mimicking the index (well, approximately), then IMHO this is better choice than ETF.

First, you get rid of MER, completely.
Second, I feel it's more secure. You are the direct co-owner of the business, without the middleman.

Who knows what gonna happen to Barclay, or e-Funds, or even Vanguard, in case of some major global disaster. Theoretically, they have right to turn your share into cash and return it to you. If they will do it in the inappropriate moment... you gonna lose, maybe a lot.

[brunes]

I think if you have enough money to buy the portfolio of ~60 stocks in "full lots", mimicking the index (well, approximately), then IMHO this is better choice than ETF.

First, you get rid of MER, completely.
Second, I feel it's more secure. You are the direct co-owner of the business, without the middleman.

Who knows what gonna happen to Barclay, or e-Funds, or even Vanguard, in case of some major global disaster. Theoretically, they have right to turn your share into cash and return it to you. If they will do it in the inappropriate moment... you gonna lose, maybe a lot.

If there is a major global disaster what makes you think you will get your money from $COMPANY_X either?

EDIT: And to OP - you need two more options.

a) Because I find it enjoyable and exciting to TRY to beat the market even if I know I can not
b) Because I am the next Warren buffet

[halbbitter]

If there is a major global disaster what makes you think you will get your money from $COMPANY_X either?

I am not interested in getting money in the middle of disaster. What I want, is to retain my fraction of the business, no matter what.

Let's assume the disaster is over, I have survived, and the company (which I own shares of) has survived too. Now, the economy is gradually returning to it's normal condition. I was the owner of 1/1000000 part of the economy before the disaster, and I remain in this role now.

[brunes]

I am not interested in getting money in the middle of disaster. What I want, is to retain my fraction of the business, no matter what.

Let's assume the disaster is over, I have survived, and the company (which I own shares of) has survived too. Now, the economy is gradually returning to it's normal condition. I was the owner of 1/1000000 part of the economy before the disaster, and I remain in this role now.

My point is the odds of $X company surviving vs $Y company surviving $RANDOM_DISASTEr are th esame.

There is no reason to think that some economic collapse would bring for example TD under and not your other stocks on the TSX. Disaster could just as easily bring one of those stocks under and not TD, in which case you index fund would have still been in theory redeemable while your other shares are not.

[questrader]

Can we change, "I believe I can beat the market", to "I KNOW I can kick the market's a**!" ?

J/K

[halbbitter]

My point is the odds of $X company surviving vs $Y company surviving $RANDOM_DISASTEr are th esame.

There is no reason to think that some economic collapse would bring for example TD under and not your other stocks on the TSX. Disaster could just as easily bring one of those stocks under and not TD, in which case you index fund would have still been in theory redeemable while your other shares are not.
yes, but I'm diversified. If I own 60 companies (say, I follow S&P/TSX 60), and 10 will die, another 50 will survive. I'm OK with that. As opposed to the situation when I have everything in TD e-Funds, and TD is in trouble, and in the best case I can only get refunded in cash (delayed? devaluated?), which is not what I want..

[brunes]

yes, but I'm diversified. If I own 60 companies (say, I follow S&P/TSX 60), and 10 will die, another 50 will survive. I'm OK with that. As opposed to the situation when I have everything in TD e-Funds, and TD is in trouble, and in the best case I can only get refunded in cash (delayed? devaluated?), which is not what I want..

And what about the brokerage house holding all these stocks of yours :P

My point is unless you're keeping gold bricks under the mattress, any kind of collapse that would cause TD / RBC / CIBC to dishonor their index funds, cashing out your stocks should be your last worry. You should be more worried about killing the zombies / aliens / making peace before the meteor hits.

[batman321123]

Because by swing trading I can demolish the market.

You get free stuff at the meetings? What kind of stuff?

[BTron]

I have serious issues with paying any MER. If you trade in blocks of even $3000 or greater, yours will never be above 2%, you get to be your own fund manager. If you're investing in indexes, you'll never hit a home run so if you can buy $3000 of a small-cap stock that has the potential to go to $20000 or $0 it's a worthwhile risk.

[halbbitter]

And what about the brokerage house holding all these stocks of yours :P

No problem at all, I think. I have the certificates hanging on my wall, and, more important, I am listed as a shareholder in each company's registry. I couldn't care less about what happens to TD Waterhouse.

[brunes]

No problem at all, I think. I have the certificates hanging on my wall, and, more important, I am listed as a shareholder in each company's registry. I couldn't care less about what happens to TD Waterhouse.

The zombies will eat your stock certificates for breakfast!

[bobbycat]

You get free stuff at the meetings? What kind of stuff?

I'm guessing coffee and donuts:lol:
and water:lol:

[halbbitter]

The zombies will eat your stock certificates for breakfast!
...they will eat all the computers for lunch and all the paper on the Earth for dinner. Now, I'm scared!

[notanexpert]

a) Because I find it enjoyable and exciting to TRY to beat the market even if I know I can not


+1 to this one! :)

[batman321123]

To those of you who buy individual stocks:

Do you folks buy and hold stocks for a long period of time? Or do you just buy and sell after you've made a few bucks?

[Paksis]

I think if you have enough money to buy the portfolio of ~60 stocks in "full lots", mimicking the index (well, approximately), then IMHO this is better choice than ETF.

First, you get rid of MER, completely.
Second, I feel it's more secure. You are the direct co-owner of the business, without the middleman.

Who knows what gonna happen to Barclay, or e-Funds, or even Vanguard, in case of some major global disaster. Theoretically, they have right to turn your share into cash and return it to you. If they will do it in the inappropriate moment... you gonna lose, maybe a lot.

:lol: :lol: :lol: :lol:

[keipra]

Do you folks buy and hold stocks for a long period of time? Or do you just buy and sell after you've made a few bucks? Swing trade mostly

[GimmeGear]

AFAIK it's the only way to set up a DRIP.

And some ETF's have a concentrated holding, so it's not a killer to just buy the components individually---

Stingy Investor (http://www.ndir.com/SI/articles/0604.shtml)

great site btw.

EDIT: if anyone knows of some DRIP fund or ETF, put that up or pm it to me. Now THAT would be sweet!

[notanexpert]

To those of you who buy individual stocks:

Do you folks buy and hold stocks for a long period of time? Or do you just buy and sell after you've made a few bucks?

I make two types of purchases - either large solid companies that increase their dividends regulaly - those stocks I buy and hold. The other type of purchase is smaller more speculative and volatile companies that I think have a chance for longer-term success - in those cases if the company has a big pop quickly after I bought, then I sell it, if it does not - I don't mind waiting, sometimes I'm rewarded nicely for that too. Those types of companies are a tiny portion of my porfolio though. I say that I put my Lotto 6/49 money into them (since I don't play the Lotto).

[netriones]

1.I want to have control over my investment.
2. I don't want to pay a fee to a mutual fund that under perform the market.

[simms]

To those of you who buy individual stocks:

Do you folks buy and hold stocks for a long period of time? Or do you just buy and sell after you've made a few bucks?

Both. I buy and hold my blue-chips for a long period of time for the purposes of long term gains.

Then, with another account, I am looking to buy and short sell for short term gain....