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Author: downisland Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Self Directed Fidelity IRA Date: 3/31/2006 7:08 AM
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This is a copy of a post I put on the Bond Board where I was advised to go slowly and let the Bonds Mature.
"I love this place. Thank you all for all of your help. My Dad actually died in 2002. I have been holding the status quo and trying to learn all this time. I read constantly, the Wall Street Journal,Barrons, Kiplingers,Fortune,Forbes,Money,Business Week,I have read books like The Intelligent Investor, How to Read a Financial Statement, Buffett, the Making of an American Capitalist, Poor Charlie's Almanack, Socially Responsible Investing, I subscribe to the Motley Fool's Hidden Gems Newsletter,Morningtstar Stock Investor Newsletter, American Association of Individual Investors Newsletter,Luis Rukeyser's Newsletter Etc. After all this reading about investing I have finally decided to ease my way into some dividend paying stocks.
In 2003, on Sept. 11th, on the anniversary of the attack on the World Trade Center, in order to be patriotic and because I trusted Warren Buffett, I bought one A share of Berkshire Hathaway with some of the money that I inherited. My Dad had always admired Warren Buffett and that decision just felt right for me. That one share which I bought for $75,000 is now worth about $90,000. Not a great rate of return but I think that Berkshire Hathaway is undervalued and I want to hold it for the long haul. I am a patient investor. All of my own personal IRA money is in Vanguard Index Funds.
There is no doubt that bonds are a beautiful thing. I was the executor of my Dad's estate. He died on May 19, 2002. His assetts were split in half 50% Bonds and 50% Stocks. The stock market totally tanked that summer. We were all quite concerned (five other siblings) as we watched Dad's stocks decline in value. But lo and behold, the bonds saved us. The bonds didn't decline in fact they went up. I see the value of holding bonds to offset stock losses. Now however, with myself being 54, I need to put at least half of this bond money into something that can grow. Because of the MRD and because, my research has led me to believe that over time dividend payers frequently outperform the market, I figured that dividend paying stocks wouldn't be a bad idea. It is a small world of stocks for me to research and the researching might be fun. You have all have convinced me to go slowly, and to wait till the bonds mature and then buy the stocks as I go along and to do it all in a self directed Fidelity account.
Although I am now only paying 1/2% to my Dad's old management firm as their management fee for this bond portfolio, they told me that if I bought any stock the fee would be changed to 1.35% On $400,000 that is $5,400 per year! Since I'm not interested in trading and my stock will most likely be blue chip dividend payers, just sitting there,I'm happy to try to save this money and do it myself. Thanks a lot for the encouragement and support."

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