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URL:  https://boards.fool.com/ive-gathered-my-little-fortune-and-am-preparing-16207461.aspx

Subject:  Re: How much Time? Date:  12/2/2001  12:32 PM
Author:  exilion Number:  21772 of 27990

I've gathered my little fortune and am preparing to invest for the first time in stocks. I found a few companies I like and that I'm willing to lose money on (but that I think will gradually make me rich instead), but I don't have a lot of time to watch stocks after I set up a regular investment plan.

Is it a bad idea to buy stocks but only pay close attention to them every other month or so? How much attention do you consider necessary for individual stock investing?

Min
=====

Min,
I have had a while to ponder your question, and I see there have been 110 posts since I replied initially. I am sure these fine people have given you their opinions, probably varying in degree.

Here's my take...

From that small paragraph, it seems you may be willing to experience short-term losses in exchange for the long run expected rise. Nearly all of them in total should do average. Some will over perform, while others will lag and the rest will break even. Perhaps one will even go out of business while another will outperform by leaps and bounds.

Why not just DCA into a broad index fund? Same results. Maybe...

I don't know what you have picked as your portfolio either, knowing that I could have greater confidence one way or another. You may have already announced your pucks in a later post, perhaps then I can better comment.

Regarding your last two questions...
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Is it a bad idea to buy stocks but only pay close attention to them every other month or so? How much attention do you consider necessary for individual stock investing?
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I would at least get into the habit of reading The Wall Street Journal, or a good business section of another newspaper. At least don't be surprised when you are surprised at a substantial, though possibly temporary loss in your portfolio. If you don't have your eye on the ball, you really can't even swing, let alone standing somewhere outside the batter's box. You have to have some information and working knowledge to make informed decisions.

However, if you can pick companies that you believe can weather the worst of circumstances and worst case scenarios and blindly DCA them, I think you are better off than the next person that blindly sticks their money in a passbook savings account. This is easier said than done. It can be done, but there is a lot of distraction, noise, trash, and other insignifica that you have to evaluate and discard along with real important information that you would be better knowing than not knowing.

Short answer: Emotion could cause you to do something near term that would completely destroy all you have built up to that point. Knowledge goes a long way in keeping emotion from dominating your actions.

The amount of attention necessary for individual stock investing varies according to how many different companies you follow. Company by company, you still have variable guidelines due to the changing or little changing environment they exist in. Tech companies I would tend to devote more time to, only to understand competition, products, and other challenges. A company that makes rocks, or quarries has less to monitor, due to less competition, less change in tech, and other issues. As you become more and more familiar with the stocks you own, the less time you are likely to spend studying at least some of them.

Fair enough? You get what you put into it. Maybe you get lucky? Maybe unlucky, but probably average on average the longer you hold the stocks.

Please post as time allows and I'll try to address any other concern you have.

exilion

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