ARBOR WEALTH: Stock picks, mutual funds, etc.

Published: Thursday, August 28, 2014 at 08:01 AM.

An alternative to consider might be to choose individual securities and essentially build your own mutual fund. Many investors and advisors choose this route.

At one trading custodian, it’s $8.95 to buy a stock, and $8.95 to sell it, and those are the only costs associated with owning it. That’s a lot less expensive than buying a Class A, front-loaded mutual fund.

So how can an investor know enough about individual stocks to serve as his/her own stock picker? You work at it. You rise early each morning and study the activity of the overseas markets. You read incessantly about economic trends and global market interactions. You learn which equities have historically risen in value and have periodically increased their payouts to shareholders over time. You analyze a company’s underlying fundamentals.  

It’s much more difficult and complicated than simply buying a bunch of mutual funds, but the long term payoff may be worth it.

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 —, a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.



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