Sunday, September 17, 2006

What's your Sloth Story

Tell us about your story of successful "slothful" investing. Maybe your grandmother leave you shares of XOM or GE? Or you got in on the Google IPO and are still holding (or MSFT?)

We'll take stories slothful waste as well.

Mine actually involves using a full service broker. My parents are successful people, but not what you would call successful investors. They are employees who have saved diligently and profited from the long bull market.

Anyway, when I was 12 (and definately no investor), I decided I wanted to purchase stocks. So my dad took me to Merrill Lynch (which a savvier investor would not have done) and helped me open an account. At the time Merrill was offering a program that enabled you to purchase based on dollar increments and not round lots (which I could not afford). I decided to invest in the bluest of blue chips. T. Yes, American Telephone & Telegraph. I purchased 7 plus shares with about $200.

I was excited about the dividend and the strength of the company. After 12 years I had shares in Lucent, AT&T, NCR, Comcast, Avaya, Agere and other companies. I think my position was worth nearly $1000, which wasn't bad. But I had never really collected any dividends because of the account fees. When the telecom market collapsed, I wound up with an account balance not significantly different from my initial investment and I still had fees I owed.

I sure had been slothful, but I had missed the boat.



  2. Hello Strategic Investor. I know this is a little of topic of slothful investing but maybe not. I Have a question for you. How do you trade? Broker or Online? I want to sign up with this new firm Sogoinvest, but I am not sure if I should trust the new guy or stick with one of the older ones. Tell me what you think. Thanks

  3. I think it is relevant to slothful investing, because your strategy will define what fee structure is best for you.

    I use an online broker, TD Ameritrade (I have been with them since they were Waterhouse Securites, which was purchased by TD Bank, to become TD Waterhouse).

    Every time they go through an acquisition, fees go down, which is a good thing. Generally, I don't worry too much about commissions. All online broker commissions are relatively low. If you are doing lots of transactions, obviously, you wnat to focus on lowest price that provides good execution. Since I make few moves (sloth), I don't pay much in commissions, anyway.

    I place a high premium on good research and would be happy to pay a bit more for it.

    I just took a quick glance at the website you mentioned and I must say, it did not have the research tools that I would want. It talks about long-term appreciation, but its tools are entirely based on trading (short-term buying and selling). It is cheaper than a TD Ameritrade, though, so its up to you.

    What is your strategy?

  4. I am not looking for the housing market to suddenly turn back up on a dime. Too much inventory to work through. Some of that invetory will drop off as sellers cancel their listings (or they expire) as they were unable to sell at prices that are no longer available. These are the ones who didn't have to sell, didn't have to move, didn't have a bad mortgage to refinance, but were willing to sell at inflated prices and didn't pull it off.