Comments by "Magic Beans" (@Magic_beans_) on "Managed Solutions | Mutual Funds u0026 More" video.

One note to this is that when your portfolio is new and small, new deposits can quickly dwarf these differences, so you don't have to put too much thought into it. Let's take this example of a $300 monthly deposit. That's $1,800 in the first six months. Unless Stock A continues its runaway performance, contributing equally to each investment will push it back toward balance anyway. Not perfectly of course, but enough that it won't terribly matter.
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They can now, that wasn't as widely available when this video was made. My brokerage will sell as little as 0.001 of a share or $0.01, whichever is more (For example as of late 2023, Chipotle sells for about $2,300 per share, meaning 0.001 shares would be $2.30. They wouldn't let me buy $1 of Chipotle because that would round down to zero.)
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Both are good. The key traits your emergency fund should have are liquidity and stability. Could you access that money quickly if you needed to, and is there a chance it'll drop in value right when you need it most? The tradeoff is that money market funds tend to pay a slightly higher rate than high-yield savings accounts, but they're not insured by the FDIC, CDIC, NCUA, or anybody like that. That means there's the possibility of your investment losing money, though that's very low if you're working with established companies and they're buying safe investments like US treasuries. (There is SIPC insurance, but that only covers things like the brokerage itself becoming insolvent. If your fund manager decides treasuries are boring and YOLOs your money into Gamestop options, that'll probably have to go through the courts.)
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@thingshappen9199 Ideally you'd continue adding to it, but yes. If you want to get into the details of why, look up Bob, the world's worst market timer. Bob is a hypothetical guy who was good about saving money but he only ever puts it into the stock market right before each crash, consistently for the last 30-50 years. His saving grace is that he never sells his investments, so he gets to ride the wave back up after each crash, and in the end he actually did pretty well.
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@Mishkola If you’re enjoying it and making money, awesome. Many people wouldn’t though, they just want something simple, something that provides pretty good results without much knowledge or maintenance. (Personally I’d diversify OP’s suggestion a bit further into a “lazy portfolio”, a handful of funds covering different asset classes. Maybe they’d have one covering the total US stock market, one for foreign stocks, one for bonds, and one for REITs. That way it’s not all US large cap companies.)
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2:30 One thing I’d add here is that this is just an example. You should have an idea of much of your money you want in any one company, but that doesn’t mean that every position has to be equal. For example, let’s say most of Alice’s investments are in household names like Microsoft and Costco, companies that may have a bad year now and then but are unlikely to just evaporate. But she also wants to dabble in something with a higher risk-reward, say a little biotech company that could skyrocket or collapse depending on how their research goes. It would be perfectly reasonable to keep that position smaller.
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