I have been investing in individual stocks for the past 25 years.
However, as I approach retirement, I am reluctant to move my funds into Index/Mutual Funds.
I see investing in individual stocks as enjoyable, like a hobby or something that I don’t want to give up.
Anybody feel the same way?
Sure, I can park my funds in a low cost Vanguard Balanced Index Fund, but then I would feel i would “lose” my identity as an individual investor…What fun would that be to check my portfolio once a year that historically averages 8% returns over the long run?
I plan to stay invested in individual stocks as well, my friend. That said, I’ve made enough investing errors in my life that I recognize that I have limitations. As a result, I plan to maintain the practice of diversification within the context of stocks I am willing to own.
In other words, I won’t buy a stock just for diversification purposes, but if I am choosing between a handful of stocks that I am willing to buy, I will let diversification play a role in deciding which one actually gets the nod.
I’ve only been paying attention to my investments for 16 years, starting three years after I retired. Up to retirement I had done alright saving, but paid no attention to what funds it was all in. When I received a notice that my old employer was moving everything from Big Broker A to Big Broker B it finally spurred me to move the funds out of that plan to a regular IRA, keeping it with A. That was when I started with TMF and Stock Advisor. It took me a good six months to move what I had into individual stocks.
I ignored all the rules about conservative investing in retirement. I really couldn’t afford to follow them as what I was starting with - call it X - was woefully inadequate. My current balance is over seven times that initial X, and I’ve already withdrawn more than 1.5 X. Today I’m at comfortable adequate, and pretty confident I will be leaving a tidy sum when I’m finished.
And I find I am tiring of the game, and (finally?) growing more conservative. Rather than the five years of cash I have long held in the IRA, it is now (28%) closer to ten years; what I’ve sold because of my growing caution has not been reinvested because I have grown pessimistic about the economy. I even have 9% in an S&P 500 fund. I might put some of that cash back to work if I regain some of that lost confidence, only time will tell.