Monday, April 09, 2012

What stocks to invest in?

As I think a little more about investment alternatives to my bland Fidelity 2025 target date fund for my retirement account investing, one option is to pick a handful of high-quality "investment grade" blue-chip stocks. such as GE, PG, JNJ, MCD, KO, DIS, NKE, AA, and KFT. Maybe that sounds like just buying the Dow and maybe an ETF would do the trick, but I don't necessarily want all of the companies in the Dow, just a handful that I can "manage" on my own, maybe as few as four, no more than a dozen.
The basic idea here is that a target date fund is way more conservative than I need or want to be and focuses too much on bonds for my taste. My Fidelity fund also focuses on international and commodities. I understand little about the former, but have nothing but disdain for so-called "investing" in commodities and see it primarily as an effort to rip off consumers.
Another option I need to think more about is "growth" stocks. Alas, most of the "growth" stocks from years past that I knew anything about are now more like "value" than growth. I don't fully understand or trust Apple. Google I understand moderately, but I'm skeptical about the reliability of its growth and profitability. Ditto for Amazon. And Netflix. And lots of other "growth" stocks. I do like and understand Priceline, but the stock seems a bit overpriced. I need to identify more Priceline-like stocks.
I may end up with a "blend" approach, maybe half dividend-paying blue-chip companies and half growth. Maybe four to six of each would be manageable. To be clear, this is all for retirement accounts, not one dime for short-term trading or "speculation."


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