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Posted: 3/4/2015 3:35:38 AM EDT
Curious to your opinions on investing between the two.

Have about $4-5000 I want to invest with in the market. Heres my question. Obviously I know with that amount of money I won't be retiring on payments in 5 years. But any money I make would be reinvested in that stock. Or go the route of buying a stock I believe will double itself In a couple years (I know nothing is guaranteed).  Looking at mutual fund VDIGX and SPHD. I like either for the long term, not something I'd pull out anytime soon, either way I wind up going. 28 y/o btw, and plan to be continually buying every so often, and no I'm not getting all my financial advice from arfcom, just enjoy the input.

Thanks
Link Posted: 3/4/2015 10:28:39 AM EDT
[#1]
What should help you make up your mind is the topic of diversification.

A mutual fund gives you instant diversification.  It's a buy-in to a pool of stocks chosen by the fund manager, according the the fund's stated investing style.
If you want diversification then get a mutual fund, preferably a low cost broad ranging index fund (I would recommend Vanguard Total Stock Market).
If you like to put your eggs all in one basket go for an individual stock, but know that you are staking it all on this one company to perform.  To me individual stocks are more gambling than investing.
Link Posted: 3/4/2015 3:47:10 PM EDT
[#2]
If a single stock is gambling how is a mutual fund with multiple stocks not gambling on a larger scale?  Not saying you don't need diversification but don't pretend being a lemming buying stuff you don't understand will work out great because it is diversified.  You need to put your money in only what YOU understand.  How it work, how it makes money and how it will make more for me the investor in the future.  If you don't have a firm grasp of that stay away.  I have been reading a lot on this topic lately and a common question is what is the best investment.   The best answer I have seen so far is " one that you would want to buy more of when it goes down in price."   Statistically your worst enemy is you.  The average American retun is 2.5% even though the s&p has returned an average of above 10%. Why becaus the average person buys stuff they don't understand and when it goes sideways, and it will, they get scared and sell instead of being like buffet and double down at bargin prices.  What I would do if I were you and you likely wont:  
1.  Buy a thick book on the multitude of different investment strategies.
2.  Narrow down the options to 3-4 that you think you could actually do long term that fits with your time, Intel and risk tolerance,
3.  Buy the best rated book on each strategy and narrow it down to 1.  
4.  Read everything you can get your hands on related to that strategy including blogs of people doing it in real time.  
5.   Start to slowly get your feet wet.  
6.   Stick to it and prosper.  

Link Posted: 3/4/2015 9:06:00 PM EDT
[#3]
start with a MF but nothing wrong with getting individual blue chip securities that pay dividends, just stay away from cult stuff



Link Posted: 3/4/2015 9:55:53 PM EDT
[#4]
A few things about Dividend paying stocks:   First of all, they declined less during the last market meltdown.   As long as the Company stays profitable, investors will view them as a sort of safe-haven.

Second of all, it is a lot harder to artificially prop up the Stock price of a company with a long history of earning and dividends.   IOW, it is less likely that you'll get taken by an Enron-esq creative accounting scam.    Not impossible, but less likely.  

It's easy for a company to play financial shell games.  It's a lot harder fake it when you have to generate cash every quarter and pay it out to investors.  

Third of all, you are getting a better return than a CD or Money market account, so even if the share price goes down, it is psychologically, a lot easier to buy and hold during bear markets.  



Link Posted: 3/4/2015 9:59:41 PM EDT
[#5]
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