Comments (scroll down to add your own):

1. How about a single share of Apple Inc. stock for circa $130? Plenty of cocktail cachet, and in a stock that might actually go up!

   Comment by geo — Feb 11th 2008 @ 9:15 am

2. And don’t forget all the fun you will have keeping track of the basis for your taxes…

   Comment by Johan Ericsson — Feb 11th 2008 @ 11:52 am

3. I think I would suggest using a similar approach that is just about as boring as indexing, but could still get you some company names to around at the party… Dogs of the DOW method. It is very simple and has been a good method if used in an IRA

   Comment by ChristianPF — Feb 11th 2008 @ 1:14 pm

4. It makes me wonder how many times people said they owned Enron at a cocktail party back in the day!

   We invest in the total market…. boring! But I do belong to an Investment Club, so I could always spout off those holdings if needed.

   Comment by My Dollar Plan — Feb 11th 2008 @ 3:58 pm

5. “I’m a huge fan of passive, index-based investing.”

   Me too, but some index fund investors try to get to cute with a good, simple concept, by: 1. collecting too many index funds, 2. trying to chase performance, and by 3. shifting their allocations to favor one or two sectors. The current darling in the game is to load up on International exposure with allocations from 20% to up past 50%. I’ve read several ‘respected’ indexers suggesting 40% international as appropriate for most small investors. I believe this is a mistake, and 20% is more appropriate for most investors.

   A spin over to: http://www.diehards.org

   demonstrates that some indexers are still hunting for that elusive edge to increase their portfolio returns, but fortunately most remain committed Bogleheads.

   Comment by Ria Rhodes — Feb 11th 2008 @ 4:41 pm

6. I follow the stock market almost religiously for someone who is an amatuer. I just find it an interesting subject, I have CNBC on all day and I read investment books often. I even check my portfolio 3-4 times a day (which is not good advice for most people). Anyway, most would look at my portfolio (index funds and dividend payers) and say “BORING!” But I know enough that I can hold my own talking at just about any cocktail party. I’d recommend that approach – its cheaper. Just know about stocks and sectors and you’ll save money and still seem sociable.

   Comment by KC — Feb 11th 2008 @ 4:55 pm

7. What a fun idea! And it hadn’t occurred to me to temporarily put $2500 in Zecco, then take it out after I’ve made my trades. I’m going to have to remember that tip – thanks!

   Comment by Chief Family Officer — Feb 11th 2008 @ 10:11 pm

8. I have decided that I’m going to invest my IRA monies ($4000 for 2007) in individual stocks. I also max out my 401k and 90% of my 401k monies is in funds. The first stock purchase that I made last week was for a local biotech firm and the stock was less than $4 a share and I bought 100 shares. I’ve got some other stocks that I’m watching (companies that my husband and I use and or like) and hope to buy some more stock soon. We plan to buy and hold the stock that we pick up.

   I can tell you, that for me, buying and watching individual stock is way more exciting than buying mutual funds or index funds. Since I’m only budgeting $4000 in stock purchases I’m not too worried about the performance.

   Comment by Sam — Feb 12th 2008 @ 8:06 am

9. I watch the market and enough individual stocks to have plenty to talk about even though my investments are currently all Vanguard funds in retirement accounts. It wouldn’t be a lie to say you invest in them either, do you know how many interesting companies and sectors are covered by the SP500 index?

   I wouldn’t buy shares just to say I owned them more than I would buy a specific car or television just to say I owned that type. Many people are impressed with those types of things though, so it is an interesting idea, and a relatively cheap way to buy something to impress people.

   Another suggestion would be to get in on the Cramer hype, pick a few stocks that get some press, and do the type of homework he suggests. Then you can talk about popular picks but have enough detail to impress people who only know the news and hype.

   Comment by planner — Feb 12th 2008 @ 11:24 am

10. Or just open a CAPS account at fool.com. It’s free, fun, and makes a game out of stock picks- without any monetary risk. I’d much rather “have fun” for free.

    Comment by Jon — Feb 12th 2008 @ 2:02 pm

11. Sam, you are making a mistake but it looks like you know this already. Who says you can’t buy a target retirement fund from Vanguard AND follow the market?

    Comment by zook — Feb 12th 2008 @ 7:14 pm

12. For Ria,

    International exposure isn’t a fad; it is a necessity. Over 50% of the world’s capitalization is outside the US now. So an investor who ignores international equities is giving up on 50% of the world’s investing options.

    Twenty percent is a good percentage, but a recent paper that can be found on Vanguard’s site says 30% is optimal. While 40% might even be better, Vanguard claims the cost of investing outweighs the gain so 30% is best.

    But, I think adding REITs and commodities is also essential for a portfolio. Both have low or negative correlations to US stocks and bonds.

    Comment by Kirk — Feb 12th 2008 @ 7:33 pm

13. I prefer talking about all the investments I never pulled the trigger on – GOOG, YHOO, and many more.

    Comment by thomas — Feb 13th 2008 @ 1:45 am

14. Comment by Kirk:

    “International exposure isn’t a fad”

    I didn’t say it was.

    “Twenty percent is a good percentage, but a recent paper that can be found on Vanguard’s site says 30% is optimal.”

    Please provide a link/url (Vanguard ‘paper’ you mentioned) to the information you mentioned so readers can follow up information. As far as I know, Vanguard has most recently advised most smaller investors to stay close to a 20% International allocation, as increased allocations on up to 50% show greatly diminished
    advantages in lieu of the risk/return vector.
    I recommend a Vanguard PDF file (’Portfolio Construction for Taxable Investors’ – disregard the word ‘taxable’ in the name, as this is an excellent educational tool for most people needing sound advice) which offers a concise guide for modern portfolio construction.

    Comment by Ria Rhodes — Feb 13th 2008 @ 3:09 pm

15. Sorry. Not impressing people at cocktail parties is how I can tell that I’m in the right investments.

    Comment by Nicole — Feb 15th 2008 @ 10:59 am

16. Ria and Kirk,
    Measurements of “optimal” allocations are by neccessity backwards looking. What was optimal over the last 20 years is unlikely to be optimal going forward, so we can safely dismiss all papers on the subject as speculation, not fact. I personally invest 40% of my assets abroad, not because I think it’s an optimal number but because I think it’s a sufficient allocation. Besides, after I got finished rounding out my domestic portfolio, 40% was what I had left. Perhaps not the most scientific method of portfolio determination, but I’d be willing to bet it will do every bit as well. The biggest enemy of a great plan is the search for the perfect plan.

    Comment by Kyle — Apr 28th 2008 @ 10:50 am

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