long term investing strategy (before I do something dumb).I am a beginning investor (who has read and heard enough to formulate a semi-informed strategy).I have been putting 5% of my wages into my 401K (getting my full company match) for about 10 years, paying off debt (my wife and I just recently paid off our small house and became 100% debt free) and now we want to start putting the max annual amount ($5,000 apiece) into Roth IRAs.I am a massive believer in Warren Buffett and value investing for the long term. Buy and hold, minimize fees and taxes and all that.Here is my simple strategy: each year fill one Roth IRA with BRK-B stock and the other with a single proven S&P 500 high dividend-paying stock. Alternate each year so that over time each Roth gets equal doses of BRK-B and high dividend stock. I think my strategy minimizes fees ($8 through my Fidelity account) pretty effectively in two ways: (1) I fill each $5,000 Roth with a single stock purchase each year (so only one $8 fee)(2) the dividends are automatically re-invested in the stock from which they were paid with no trading fee involved (I get more shares with no fees)I know that the conventional wisdom is to not put too much of your portfolio into single stocks but Berkshire Hathaway offers a lot of diversity in a single stock. Plus, my 401K investments (Fidelity index funds) give my portfolio a pretty good measure of diversity. The high-dividend stock pick would be different from year to year and that would create diversity over time.As needed in retirement, the dividends from the high-dividend stocks would create a tax-free income stream (along with a taxable stream of forced withdrawals from my 401K) while we held the BRK-B stock as long as we could.I know that ideally one puts tax-inefficient investments into Roth IRAs and I'm not sure how BRK-B (pure capital gains) and high-dividend paying stocks fit into the tax-inefficient investment scale. So, whaddya think? Please fire away and don't be gentle (I would rather feel stupid now than 25-30 years later!)
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra