Continuing with my journey reviewing Mel’s Money Manifesto, today’s topic is stocks. This is certainly not a quantifiable metric but I definitely feel a lot more comfortable dealing with stocks now than I did in 2013.

Most of my knowledge about stocks prior to becoming more financially literate was that my grandfather, who worked for Exxon as a foreman for years, would buy me and my brother a share of Exxon stock for each of our birthdays and Christmas.

This seemed like a real lousy gift as a kid.

Clearly, I was very wrong. Thanks, PopPop. It was a solid move.

They were largely a mystery to me then and in an effort to better understand stocks myself, I researched them and wrote this post comparing stocks and clothes shopping.

I am fairly pleased that 9 years later, this is still pretty much right.

That being said, here’s how I pick stocks these days amid a sea of a lot of options.

A large quantity of my money goes into total market ETFs because they have pretty low fees and are diversified. Whenever I set aside brokerage account money, usually 75% of that sum is split between DIA (a Dow Jones industrial index) and ITOT (a total stock market fund).

A lot of folks really like VTSAX, which is the Vanguard Total Stock Market Index Fund. There is a guy named John C. Bogle, who invented index fund investing and founded Vanguard. He felt like investing in the market as a whole was a pretty good bet over time because, historically, the market pretty much always goes up. Not necessarily from one year to the next, but over five, ten or longer periods, it does.

This is a really easy way to invest and at least minimize a lot of the risk of investing – and to not have to worry about selecting an individual company.

With the remaining 25% that I invest, I follow Warren Buffet’s advice to “invest in what you understand” for 20% of that. So I usually invest in things like blue chips stocks Coca-Cola and Exxon or things that feel like sure bets like Amazon or Hillenbrand (they make funeral products and large machinery). I also put a large amount into cruise ships when they shut down in March 2020 because having worked aboard one for five years – that industry was not going anywhere. I’m sure some smaller lines may have folded, but so far my investment in Royal Caribbean has more than doubled.

With the remaining 5%, I do speculate a little and I have invested in CGC (a cannabis company), REM (a REIT – which I only kind of understand), and USER (my experiment with investing in an IPO, which tanked immediately afterward but now seems closer to breaking even at least).

So to sum up my strategy – most money in the easy and fairly safe index funds, a little money in strong independent companies with good track records and products that make sense to me, and a tiny bit of money shooting for the moon or trying to learn how different types of stocks work.

As for when to sell your stocks, beats me? I am still really confused by that part and so while my buy and hold forever strategy makes me seem pretty responsible to many of my friends, it also is because I’m totally baffled by knowing when to sell.

If you’re interested in seeing how the other goals on my Money Manifesto are going, you can read those posts here:

1. ) I will pay off all my debt. 
2. ) I will tithe 10%
3. ) I will save at least 15%
4. ) I will build up a $10,000 emergency fund.
5. ) I will max out my IRA every year.

How do you decide what to invest in? Do you buy and hold for a long time or sell more often?