No. of Recommendations: 0
I've been reading up on various strategies and now have joined with others at the Motley Fool. I have over $170K sitting in a money market fund from my 401 & 457. I want to follow some of the fool's recommendations, but am not sure how much to buy of the core recommendations. I also have read up on the P/E ratio and though it shouldn't be the one thing you take into consideration, Netflix and Amazon seems awfully high.... Any comments, suggestions?
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No. of Recommendations: 5
Why not read up a little on low-cost index mutual fund investing before diving into individual stocks? A good place to start would be the discussions at http://www.bogleheads.org/forum/index.php

-drip
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No. of Recommendations: 4
Drip is right.
Go with low cost / index funds, and do not jump in all at once.
Use dollar cost averaging, and put your money in gradually over a 2 year time frame.

Most investors lose a lot of money by paying 1.5% to 6% on management fees.
There are mutual fund management fees, buy-in fees, sales fees, 12 b-1 fees etc. that will all eat away your savings & earnings.
The worst fees are "Wrap Fees" by Merrill Lynch, et al.

If you are to choose 1 Mutual fund house, go with Vanguard (John Bogle's legacy).
imho
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No. of Recommendations: 3
I want to follow some of the fool's recommendations, but am not sure how much to buy of the core recommendations.

Do you means TMF recommendations? Best thing to do with those are to put those web pages on your browsers block list. If you printed them out, put those papers thru a shredder. The correct amount of their core recommendations to buy is ZERO. All IMHO, of course. The bulk of the value here at TMF is found on the message boards.

I've been reading up on various strategies and now have joined with others at the Motley Fool. I have over $170K sitting in a money market fund from my 401 & 457. .
Before you start doing ANYBODY's strategy, ask yourself how you would feel if your $170K evaporated to $136K in one month. That's what happened in the S&P500 in October 2009.

The very best advice I give people is to read and think over this information at these links:
Faber's Paper
http://ssrn.com/abstract=962461
http://www.mebanefaber.com/

FundAdvice.com: "The ultimate buy-and-hold strategy"
http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy...

https://www.magicformulainvesting.com/marketing/WelcomeForm?...

20 page paper
"Asset Class Performance is Unpredictable"
http://www.mediafire.com/file/ttmjtmzjzo1/MultipleClass.pdf


2 page synopsis of "Asset Class Performance is Unpredictable"
http://www.mediafire.com/file/cf5iiuyjidm/MultiAssetCH.pdf
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No. of Recommendations: 2
If you are 58 and have much of your money sitting in a money market and want to know if Netflix and Amazon are too high - then you should not be doing this investing on your own.

you have way too much homework to do - 1st, you need to sit down with or call an advisor from Fidelity or Vanguard, they will give you free advice.

you can read the fool all you want but you need to consider your age and risk tolerance before you pull the trigger on individual stocks.
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No. of Recommendations: 1
I want to follow some of the fool's recommendations, but am not sure how much to buy of the core recommendations.

------------
Do you means TMF recommendations? Best thing to do with those are to put those web pages on your browsers block list. If you printed them out, put those papers thru a shredder. The correct amount of their core recommendations to buy is ZERO. All IMHO, of course. The bulk of the value here at TMF is found on the message boards.


i feel much the same ("shredder" might be a bit hyperbolic ..)

i wonder how many here do .. i wonder if anyone's made consistent gains following the MF recommends





[
way back in the day, they had a strategy called the "Foolish Four" ..i followed it for a while and didn't lose TOO much
haven't really listened to them since ..]
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No. of Recommendations: 0
I'd go to your local library & check out any books by Willaim J Bernstein.
http://www.amazon.com/s/ref=nb_sb_ss_i_0_19?url=search-alias...

Also check out:Paul B. Farrell's Lazy Portfolios [allportfolios made up of index funds]
http://www.marketwatch.com/lazyportfolio?siteId=cbs
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No. of Recommendations: 0
I assume the MM fund is a rollover IRA. I recommend you see a Fee-ONLY financial planner through The Garrett Network. The only fee they get is what they charge you. They get no commission, kick-back or other fees to steer you to high fee funds. They are working for you.

The Fool has an arrangement with <participating> Garrett advisors for a 10% discount. It will be the best $2-3000 dollars you INVEST out of your funds. Check their site out and see if there is a advisor near you.

http://garrettplanning.com/

I'm partial to Vanguard ETF's for my "safe money" (recommended through a Garrett planner) but am also a Stock Advisor member and have been very successful following their strategy. I'm recently retired.

Another fee-only organization is NAPFA but I believe are more expensive:

http://www.napfa.org/

However, their website has lots of good information. Here's their FAQ page:

http://www.napfa.org/consumer/faq.asp#FAQ23

IMHO, free advise is worth what you pay for it.

op
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No. of Recommendations: 1
I assume the MM fund is in a rollover IRA and you did not take possession of the funds directly. I recommend you see a Fee-ONLY financial planner through The Garrett Network. The only fee they get is what they charge you. They get no commission, kick-back or other fees to steer you to high fee funds. They are working for you. They have a stake in making you a successful portfolio and investor.

The Fool has an arrangement with <participating> Garrett advisors for a 10% discount. It will be the best $2-3000 dollars you INVEST out of your funds. Check their site out and see if there is a advisor near you.

http://garrettplanning.com/

I'm partial to Vanguard ETF's for my "safe retirement money" (recommended through a Garrett planner) but am also a Stock Advisor member and have been very successful following their strategy. I'm recently retired.

Another fee-only organization is NAPFA but I believe are more expensive:

http://www.napfa.org/

Nevertheless, their website has lots of good information. Here's their FAQ page:

http://www.napfa.org/consumer/faq.asp#FAQ23

IMHO, free advise is worth what you pay for it. And in the end is usually not free.

op
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No. of Recommendations: 4
This is a great beginning book, Check out the reviews at Amazon;

The Bogleheads' Guide to Investing

http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lari...

There is another Bogelheads book that covers much of the same material but is geared more for retirement;

The Bogleheads' Guide to Retirement Planning

http://www.amazon.com/Bogleheads-Guide-Retirement-Planning/d...

When learning about investing you need to remember that thate are only really three things that you can control.

1) Keeping expenses low (mostly low cost index funds)
2) Your asset allocation (mixture of stocks and bonds)
3) How much you save or spend each year.

Be very careful of thinking that you will somehow be able to beat the index funds buy your shear superior intelligence or by paying someone a fee to pick them for you. If someone did have that skill they would be billionaires and would not sell you the info for a small fee. If you could do this yourself, then ou could earn a seven figure salary on wall street. A professional investore would be in the investing hall of fame if they could consistantely beat the indexes by 1% per year.

You can do very will with just these low cost index funds for a start.

Total Stock Market (US)
Total International Stock Market
Total Bond Market

Greg
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I concur with Greg's 3 index funds to start, only I would elect the ETF version of the same funds, through Vanguard.
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way back in the day, they had a strategy called the "Foolish Four" ..i followed it for a while and didn't lose TOO much
haven't really listened to them since .


Well, at least FF had some logic and backtesting behind it (even though the backtesting turned out to have some serious flaws.

Worse yet were things like the "Rule Makers" and "Rule Breakers" portfolios. IIRC these lost 50% of their value and were eventually abandoned. I can't think of any reason that any of TMFs current recommendations are based on anything more solid than RM & RB were.
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Worse yet were things like the "Rule Makers" and "Rule Breakers" portfolios. IIRC these lost 50% of their value and were eventually abandoned. I can't think of any reason that any of TMFs current recommendations are based on anything more solid than RM & RB were.


i can think of a reason they *might* be better ..

i recall looking at 'Breakers' . it was heavy into tech and rode the 'dot.com' bubble up and up. it then puked big time when the bubble burst .. since TMF was into "buy and HOLD", they rode to the bottom ..and some of the port never came back.

MAY be they have a sell strategy now... maybe they don't.
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No. of Recommendations: 1
Many people have mentioned risk tolerance. The problem is, most people over estimate their tolerance. You don't really know until you live through it. I used to think I had a high tolerance until the crash about 10 years ago. Then I realized I don't have to hit homers, a bunch of singles will do just fine.

JLC
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No. of Recommendations: 0
You have determine how much you are willing to loose. I made this mistake during an investment in one of my stock in China. Now, i have limits on what I'm willing to loose.

I'm also invested in real estate. (duplexes and houses) There the problem is a little more complex. I didn't bleed my equity, so I able to survive the current R/E crisis.
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Just my thoughts here ---- I am the same age and have been working on this for a very FEW years - how about dividing the money into 4 basic allocations - cash /equities --- stocks ---- bond funds (short -term --
metals,etc. Then look at each sector - say CD,s ,money market, Treasury money market,savings account THEN move onto the next say stock and start looking at blue chips - look at the ARISTIOCRATS -check out utility etc. But do it SLOWLY and when you are in uncharted territory post - someone will offer insight -
Try not to get into anything that LOCKS you in as in an annuity -I did that 15 years ago when I thought that was the answer to NOT make mistakes and it was a HUGE one!!!Andi am trying to do thebest with what i have now!!

Good Luck!!!!
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No. of Recommendations: 9
"I've been reading up on various strategies and now have joined with others at the Motley Fool. I have over $170K sitting in a money market fund from my 401 & 457. I want to follow some of the fool's recommendations, but am not sure how much to buy of the core recommendations. I also have read up on the P/E ratio and though it shouldn't be the one thing you take into consideration, Netflix and Amazon seems awfully high.... Any comments, suggestions?"

Forget about stock tips from TMF or anyone else.

I just had a friend that received a settlement of $185,000 who had never had any money to invest. He asked me for advise and here is what I told him: "put the money into a well diversified set of ETF's. I have an account at Fidelity and they have 30 iShare ETFs that you can trade with no commissions."

He is already retired so he settled for the Coffeehouse ETF portfolio using iShare ETFs:

40%-----AGG
10%-----IVV
10%-----IVE
10%-----EFA
10%-----IYR
10%-----IWN
10%-----JKJ

He purchased this portfolio for a total of $7.95 in commissions and started a 4% withdrawal rate which will be adjusted for inflation.

Not very sexy but it is relatively safe and he should have some left to leave to his heirs.

Good luck,

OxBeaux
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No. of Recommendations: 5
If you are 58, presumably you are close to retirement, which means you should be defensive in your selections. If you go through a market meltdown (which has happened a couple times lately) you could be hurting, and seriously,

Amazon and Netflix are exactly the opposite of "defensive", and while both might be fine, both might be shot out of the water for all sorts of strange reasons. Amazon, for instance, could get whacked but good with the passage of a single law mandating the collection of local sales taxes, because instantly their price advantage disappears. Netflix could evaporate with the announcement of a similar service from Facebook, which has more users than Netflix could dream of.

I'm not saying either of these things will happen, only that at your age (and investment experience) you are perilously close to pulling the trigger without knowing which way the gun is pointed.

I played mutual funds in the 80's, and speculative hot issues in the 90's, and as I rounded the bend to retirement I have elected to invest in stalwarts, (mostly) large cap stocks which are unlikely to evaporate and which pay a good dividend.

Coca Cola pays almost 3%, which is roughly 3% more than your money market funds. Others with similar characteristics (but not similar at all) are stocks like Procter & Gamble, Kimberly Clarke, Con Edison, Johnson & Johnson, Bristol Myers, Chevron, Kraft, Eli Lilly, McDonald's, AT&T, and plenty of others.

With $170k you could buy 7 or 8 good issues at around $20-$25k each, enough to have money in several different sectors while not killing yourself with fees and commissions. Or you could put a bigger slug into an ETF, which is like a mutual fund except with lower fees and far lower tax implications (because they don't trade in and out as mutual fund managers seem to need to.) I also have PEY, another high-dividend payer comprised of dozens of different stocks, paying over 4% dividends at the moment:
http://www.invescopowershares.com/products/holdings.aspx?tic...

I'm in the dividend game now, as you can see (well, if you looked up those stocks), earning around 3.5%-4% on dividends alone , plus hopefully some appreciation in the stock as well. (But maybe not, you never know.)

I would concur with others in the thread who have not-so-politely told you to ignore the Motley Fool recommendations. If you had a better background I might be more critical of that advice, but I suspect you don't, and putting your money into things you really don't understand is almost a guaranteed ride to Unhappy Land.
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