UPDATE 9.28.2020: I have outlined further my current strategy for investing in individual stocks here.
Originally posted March 27, 2020.
I subscribe to both Value Line and VL’s conclusion on stocks.
Two weeks ago I began a formula-based buying program that I plan to continue throughout 2020.
My formula is devoted 100% to stocks. I continue to build my counter-weighting fixed-income portfolio and continue to add to three fund positions.
I first started buying the funds in the early 1970s. (about 50% fixed income).
Today, I avoid most funds and all index funds.
THE CASE FOR INDIVIDUAL STOCKS HAS NEVER BEEN STRONGER
The battle with the coronavirus is having an incredible impact on daily life, the global economy, and on the stock market. In regard to the latter specifically, volatility has been off the charts, punctuated by the near-3,000 point drop on The Dow Jones Industrial Average on Monday, March 16th and the 2,112 point (12%) spike up on March 24th. The other major U.S. stock indexes have also experienced exaggerated volatility and large net losses of late. This has hurt a huge percentage of the investment community, which has trillions of dollars in assets allocated to broad index mutual funds and ETFs. This asset class has exploded in popularity over the past couple of decades. However, when the overall market falls so far so fast, these securities incur the full brunt of the downturn.
Value Line, on the other hand, with more than 87 years of experience in both bull and bear markets, has long preached the benefits of owning a collection of good-quality individual stocks, rather than the ordinary index fund. In our flagship service, The Value Line Investment Survey®, and its digital counterparts, we track approximately 1,700 stocks across more than 95 industries. Our independent, expert analysis, which includes a research staff of more than 70 professionals and a number of battle-tested proprietary ranks & ratings, has helped investors get the most out of the decade-long bull market, and will aid investors in navigating this troubling time, and the eventual market recovery that will follow.