This would be for a long-term (2 years plus) investment. Or, do you think that it's too high?

I asked myself the same question.... 1 week before iTunes Music Store for Windows was released. I bought. Right move.

Do it! I have nearly 500 shares of Apple, and when it was at $120 I asked the same question because I wanted to buy 125 more shares. Those on this forum said it was too high.... yeah, right! Now it's $167.

2 years is not long term.

I wouldn't buy it...not with only $2000...you're not going to get a lot of shares and you're going to have to account for the purchase and selling fees.

I would buy an index ETF that holds AAPL, maybe.
But I am one to talk.
I bought "a few" shares a couple years ago, just because I would have kicked myself if it went up to $100 (was well below at the time) and I had "missed out."

*Not financial advice.

Put the money into a fund, such as Vanguard 500, or something similar. It is safer and will reflect the market as a whole.

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First off, if that is all you have to invest, you might think about diversifying and buying some index fund shares. However, I'd also suggest taking some of the money and taking on some risk such as a purchase of AAPL. I think AAPL is a good stock overall since their financials continue to be excellent, though I don't know if this is a good time to buy. As they say, sell on the way up, buy on the way down.Over the last few weeks, AAPL has just had a huge price runup in anticipation of expected large earnings for the 4th quarter. I have quite a lot of aapl stock and sold about 1/3 of it a week ago to take some profit in the event there is a drop. The quarter will be reported on October 22nd. I suppose it might go up even more before then, but chances are there'll be a big drop following the earnings announcement if the earnings are even a little bit short of "analysts expectations". If it drops significantly, I'll buy back in. If it goes up a lot either before or after the announcement I'll sell more and wait for a drop. My suggestion is that you adopt a similar strategy.

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"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan

Hey, davester, at what dollar value will you consider buying more?

If you go the fund route, look at some international funds, they are doing very well. I have the Vanguard Internation Growth Fund and it is nearly double the returns on the SP500.

Plus with the US economy teetering being invested overseas can balance things nicely.

I also would avoid AAPL right now, regardless of the earnings reports there is bound to be some heavy profit taking that will drop the price. I'm thinking it will go down to around 150. When it does - buy.

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“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias

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Thanks everyone.

Points above arguing for diversification are well-founded. If you have $2000 and are thinking about an individual stock, you are not "investing," you are "speculating." There is nothing wrong with speculating, but the definition of speculation is that you can well afford to lose a lot of it. If you cannot, you should not be buying a single stock.

You should also not be buying a single asset class. It is true that the S&P500 and various ETFs are much more diversified than any individual stock but they are also also highly volatile--in the neighborhood of 10-20% per year, some higher--and this means it is quite possible that you could gain or lose up to twice that in any 12-month period, and three or four times that are not impossible.

And you should NEVER buy something on the basis of the fact that it "has done well." Doing so is the #1 most frequent mistake that market players make. Recent returns are not indicative of future returns, unless you have a specific view that what you're buying has a quality called momentum, which also suggests you'll be watching it like a hawk and will have some sort of a system to tell you when to sell it.

The best destination for a couple of grand is a diversified asset allocation fund. Most of them come in families that vary by risk (more risk = more equity), but nearly all of them contain some bond component. Search Yahoo Finance for "asset allocation" or "asset alloc" for a bunch...and this isn't an ad, it won't dig up the ones the firm I work for runs.

Buy something that pays a dividend. A few good ones right now are Pfizer, Bank of America, AT&T, Citigroup, and General Electric.

How do you recommend keeping track of your investments.
I have things split up, but I find it overwhelming to keep track of it all.

Are there funds that perform well but do not charge as high of rates as the major investment firms do?



Edited 1 time(s). Last edit at 10/14/2007 11:06PM by loveshine.

> How do you recommend keeping track of your investments.

Combine 401ks and IRAs as much as possible, then integrate them and all your other accounts via the amazing, free, screenscraper website Yodlee.com.

> Are there funds that perform well but do not charge as high of rates
> as the major investment firms do?

My feeling on this is "not really." How can they, without cutting corners in risk management or something that you only need when you really need it? Major investment firms tend to be major for a reason, and mutual funds generally have lower fees the larger they are. ETFs are a good example -- they are very useful building blocks, and quite inexpensive, but a pile of wood in the hands of someone who doesn't know how to use a table saw is not the same as having a house.

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loveshine
Are there funds that perform well but do not charge as high of rates as the major investment firms do?

Yes, index funds, especially from Vanguard. John Bogle, founder of Vanguard has written some quite revealing exposes on the mutual fund business and how the main factor that differentiates their performance is the level of fees. He has clearly shown that essentially unmanaged index funds easily beat all but a very few (and hard to pick) managed funds because of this. This is the dirty little secret that the major brokerage firms and managed fund companies try to keep hidden from their customers. Since the "outing" of many of those funds, many of the managed funds have taken great pains to hide their fees from customers. I'd strongly advise reading some of Bogle's articles and investing your first fund $ in Vanguard index funds.

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"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan



Edited 1 time(s). Last edit at 10/15/2007 04:18PM by davester.