Poll: Do you invest in individual stocks?

Buy what you know.” Ever heard that investing advice?

You like fast food? Buy Yum Brands.*

You shop for paper towels? How about investing in Walmart?*

It seems to make sense. If you use something, chances are that a lot of other consumers like you use it too. But then on May 18, a lot of individual investors got burned buying something they use every 15 minutes: Facebook (or FB, as it is listed on Nasdaq.)

Maybe it will be a good investment in the long run, but tomorrow we’re going to talk about whether individual investors should have been buying an individual stock like FB at all.

What’s your experience?

Why do or don’t you buy individual stocks? If you do invest, how big a part of your portfolio is it?

–Stephanie Curtis, social media host

*Just examples. Please do not invest in these companies because of me. I own neither and have not done any research into their P/E ratios.

  • AmosFiveAndDime

    With bond interest rates so low, I’ve set aside about 10% of my portfolio to invest in stocks with dividend rates higher than the 10-year treasury bond rate, with some other stock-evaluation criteria I’m not quite two years into this experiment, so it hasn’t yet had any long-term validation.

  • Kent

    Yes, I invest in individual stocks. It’s rewarding, but it takes time.

    You have to be willing to invest the time and do your homework. Even then, you’ll have stocks that disappoint you. If only 20% of your selections are disappointments, then you’re probably doing pretty good!

    Probably best if you pick a single strategy and concentrate on it, whether it be value stocks (my personal favorite), growth stocks, turn around plays, etc.

  • Nick

    I invest in individual stocks, and one primary philosophy that I follow for investing is to only buy into things where value has been added. For example, a manufacturing company uses human capital and raw materials to produce a value added product. The price of that companies stock should go up in relation to production and sales.

    Too many of the financial instruments of late were only profitable when someone else lost money. That is just plain old gambling, and long term is untenable. The market crash of the last few years is a perfect example.

  • Craig Huber

    I do on occasion invest in individual stocks, but I’ll admit to a greater reluctance in recent years. The primary incentives in the markets at present are completely skewed, in my opinion: short-term profits are valued far more heavily than long-term value (and the logical results have been on display for the world to see.)

    Most of my recent investments have been in utllities, blue chip B2B, and other typically low volatilty, dividend paying stocks that remain largely off-the-radar. My interest is in building wealth, not playing financial russian roulette.