Tag Archives: etf

A Look at VGMIX (Vanguard Mid-Cap Growth Fund)

While I have a fairly good idea of what’s going on in my Sharebuilder account, it makes me uncomfortable to have no idea of what stocks my index funds are invested in. So every once in a while I plan to research my funds and see what stocks are in them.

I randomly decided to invest in VGMIX in a taxable account. Maybe a bad idea. Since I’m maxing out my Roth IRA currently with two vanguard accounts — Retirement 2050 and the Total Stock Index funds, I needed some place else to put my money. Perhaps all the rest of it should somewhere else.

VGMIX lost 47% last year (yikes.) So much for growth.

As of Dec 31, 2008…

VGMIX had:

231 stocks
$4.0B Median Market Cap (what does this mean?)
Price/Earnings Ratio 13.0x
Price/Box Radio 2.3x
Yield:
Investor Shares: .6%
ETF Shares .8%
Return on Equity 20.2%
Earnings Growth Rate 26.0%
Foreign Holdings 0%
Turnover Rate 54$

Sector Diversification

Consumer Discretionary 13%
Consumer Staples 3.9%
Energy 8.1%
Financials 5.0%
Health Care 17.5%
Industrials 22.8%
Information Technology 19.5%
Materials 4.9%
Telecommunication Services 2.1%
Utilities 3.1%

Largest Holdings (approx 1% each):

C.H. Robinson Worldwide Inc (air freight)
Fluor Corp (construction and engineering)
Laboratory Corp of America Holdings (healthcare)
Expeditors International of Washington (air freight)
Humana Inc. (managed healthcare)
Rockwell Collins (aerospace and defense)
AutoZone Inc. (automotive retail)

Apparently a fund provides a complete list of its holdings four times a year, as the quarter ends.

I hold a very little bit of a lot of different companies. Then there is a lot of other information that I do not understand. Hmmph.

Even if investing in single stocks freaks me out, I do like knowing what I’m investing in.

Speaking of investing in solo stocks and ETFs, I just bought more of COMV and IHI today. I hope that was a good idea. I feel like COMV maybe has great potential but I just don’t know enough to say. It’s in a good space that I believe has potential, but when it comes to the company’s ability to make a profit – I have no idea. I do know that they were down to $3 a share a few months ago and now they’re at $7. I’m still upset that I didn’t buy more when they were at $3.

Sharebuilder – Will it Destroy Me?

I’m determined to “understand” the stock market as much as possible. Instead of “investing” in an economics class, I’m putting my hard-earned money into stocks via Sharebuilder.

It all started this week when I realized Sharebuilder and ING were now one in the same. I trust ING, so I figured it was time to make the next leap in my financial journey — ETFs and stocks. I wasn’t going to do anything crazy and spend $1000 on one stock right away, but it’s time to do some experimenting… especially since we’re in a recession and the markets are fairly weak right now. It can’t be that bad a time to buy, looking at a long-term investment.

I did a little research and with in my typical spontaneous and likely under thought fashion, I decided to quickly move on from my original $500 investment in Gold and one small cap company that I’ve liked since my reporting days (even though now that I think more about it, they’re probably not the greatest investment). Sharebuilder had a neat feature showing losses and gains that I couldn’t see unless I signed up for their monthly plan ($12 a month) which also features 6 free trades, so I gave in and spent the money. Probably a dumb idea. Potentially a very dumb idea.

But I’m young and it pays to be aggressive in my investments, supposedly. If my “safe” mutual funds are failing, then I know to expect that anything more aggressive will likely lose money too. I’m just hopeful 10-20 years down the line these purchases might pay off… maybe in time to move to a bigger place (or buy my first house) and have kids?

Regardless of how much you know or don’t know about the stock market, it really all is one big guessing game that can be sorted through with the help of statistics and a fine understanding of the economy. Still, another bomb could go off anywhere in the world and send everyone’s predictions completely out of whack. A part of me loves the excitement of the stock market. It’s a grown-up game where you can win some money (or lose all your money, eek.)

Again, I’m not being totally stupid about it. I still have a good $12k in two crappy-interest CDs (I’ll be moving those funds to one higher-interest CD as soon as they’re liquid again) and at least my gains on my CDs and occasional take-home pay equaling more than I spend in a given month have helped balance my loss of $700+ on my Vanguard accounts.

Besides, if we are in or going into a major recession, I believe (after reading a bit on the topic) that certain cheap retail establishments will do well, especially if they have foreign sales power. I’m all about the foreign investments too. Not all in one country, but I’m going to buy a small amount of an index fund in Brazil, one hot company in Spain, and another index tracker in China.

“Going to” is because I have to wait a week and a day before any of these investments post. That’s what Sharebuilder’s automatic investing is all about. I still don’t understand it completely. The “coolest” part about it (that seems to be its selling point compared to other online traders) is that you can purchase “fractional shares.” How they do this beats me, but basically you say “I want to invest $X into company Y the 1st Tuesday of every month” and if you have enough money in your account (which you can set up to automatically transfer from your bank account) it will invest exactly that much into that company on that Tuesday.

The good here is that if a stock costs $600 ala Google and you really want a piece of that action, I guess you could go and invest $30 in it. But what i don’t understand is how on earth Sharebuilder does that. Do they actually buy a full share of the stock assuming you will continue to buy the rest of it? They can’t really do that, because when they place your next order, you buy it at the market price for that Tuesday. As far as I know in my limited knowledge of stocks, you can’t just buy parts of a share. You have to take the whole thing. So how on earth does Sharebuilder do this? They don’t really explain how they do it on their site, they just say they can and basically that it’s an awesome feature for investors with a small amount of savings each month to invest. I like the idea, but please, someone explain this to me.

Anyway, I’ve set my account up to buy parts of six different stocks once a month for a total of $300. I figure I’m better off forgetting about $300 that I’ve made and investing it, and either it will make money (I am investing in a few large cap companies that seem to pay dividends, which looks to be a good thing to balance out my risk a bit) instead of looking in my bank account and spending more on food and clothing and such that I could get more cheaply. It will certainly force me to be more frugal, in a good way.

I just hate waiting for the investment window. What if Bush’s recession tax plan passes the day before my investment and all the sudden the stocks soar? I’m confident that the stock market is sucking right now, and I’ve picked stocks and ETFs that seem to have long term potential that are also sucking at the moment. I’m so nervous that it won’t be the case on Tuesday the 29th, when my bets should be posted.

Then supposedly I keep investing the same amount every month until I’ve built up a decent portfolio. I just can’t wait until I log into my Sharebuilder account and see a few different stocks and really start following them and understanding what they do and why. If anything, this will help me learn… for future reference… what kills a stock and what makes it soar. Hopefully I’ll learn more of the later.