A Lesson From An Individual Investor
(Berwyn, Il. USA)
I am a real estate broker. As I saw the real estate bubble growing, I closed my office in 2007. During my 25 years of successful brokerage I bought many investment properties (rental properties) as a hedge against hard times, and as a preparation for retirement. At the same time my mother was a player in the stock market, and she did well. I often gave her money to invest, while I remained committed to various forms of real estate investment. I really didn't pay too much attention to what she was doing, much less how or why she did it.
Upon her passing I found myself the owner of many stocks and mutual funds......now what???? The first thing I did was nothing. Then I set about learning about the companies in which she had invested. I found that she had mainly invested in large companies that paid dividends, and that she had let the dividends reinvest in the stock. Seems like a good strategy, and I haven't changed it.
What I have done is take the certificated shares and consolidate them in an investment company, Etrade. I have been investing in these same stocks; mainly to purchase enough shares to round each stock into blocks. Another reason for this consolidation is to make research on each company easier.
I have learned how ignorant I am of the various markets, and I regret very much not learning from my mom when I had her with me. I have been learning from books and sites such as yours. This site has been very helpful.
Editor's Comment: Dear Tom, thank you very much for your detailed explanation and kind words.
It seems as though your mother was an astute lady and while her strategy may not seem overly complex, it is widely regarded as one of the more successful approaches to stock market investment. With the approach you describe, general market conditions can have a big impact on overall results, but so can the one thing your mother seemed to be good at - patience. In such a long term approach as this, time is a crucial factor.
We wish you good fortune on your investment journey and hope that it is both financially rewarding and personally fulfilling.
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