How do you think our lives will change...
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@pique There are many kinds of mutual funds. Stocks are one kind.
I try to avoid mutual funds. If I buy and hold an individual stock and its value increases over ten years, I will owe capital gains tax when I sell. No other taxes or admin costs.
Say I buy a successful mutual fund and hold for ten years. Each year, the manager buys and sells stocks within the portfolio. I owe taxes on my piece of the action each year, not just at the end. I think I also owe tax when I sell at the end. And there are administrative costs too.
That seemed to be the situation when I stopped buying mutual funds. There was one year in the 90s when our mutual funds threw off all of this taxable income. I was so annoyed that I now buy and hold individual stocks.
I still use mutual funds for retirement accounts because those don't have immediate tax consequences.
Everyone, please correct me if I'm wrong. I might be.
@Cindysphinx there are mutual funds that have extremely low fees. Vanguard offers them. Have a look. I would personally rather have a someone managing a portfolio or go with an index fund that tracks a certain segment of the market than pick individual stocks. But that's because I don't want to have to pay a lot of attention to it.
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@Cindysphinx there are mutual funds that have extremely low fees. Vanguard offers them. Have a look. I would personally rather have a someone managing a portfolio or go with an index fund that tracks a certain segment of the market than pick individual stocks. But that's because I don't want to have to pay a lot of attention to it.
@pique Understood. My undergrad degree was in finance, so used to know how to evaluate stocks. I'm a little rusty, but I don't mind it. When we have some money, I think about what companies have a good product or service. I check a few basic pieces of data, like price earnings, and I check various analysts outlooks and news reports, looking for trouble.
I don't buy anything I don't understand, so no crypto or gold bars. I stay away from anything trendy because trends come and go. Buy and hold strategy doesnt mix well with the latest flash in the pan. In a way, buying a few of your own stocks is kind of fun, kind of like going to Vegas, except you usually make money over time.
Some of my.picks have done super well, and others have cratered. But . . . No taxes and no fees.
Someday I will compare my picks with my retirement mutual funds. For now, I don't want to know.
