I'm rather new at investing, and it has taken a while to get up to speed on some of the complexities of this endeavor. Having decided to pull the trigger on my own, I'd like to ask the many experts on this forum a couple of questions.
1. Are all segments of the M* blocks needed for a well-rounded portfolio? I have small caps and a great deal of large caps covered. Does one need mids or can I forgo this segment?
2. I have become enamored with Warren Buffett and his financial empire and would like to have some of his in a mutual fund. How do I find out which funds carry his stock? I looked at M* and found you can get a top ten or so funds, but how about the hundreds of others that are not listed?
3. I believe price plays a role in profits. Should I come up with an arbitrary number that will delineate funds for purchase or not? In other words is it acceptable to have a cut-off of, say 1.10 ER as a high end on whether to buy?
4. Finally, do you guys ever buy Transaction Fee funds through the brokers or is this a crazy thing to do?
Thanks for any comments that will help me navigate this fun and hopefully profitable project.
Mike
Comments
2. At M* enter BRK.A or BRK.B into the stock quote box and hit Return. When the quote comes up you will see a link somewhere leading to a list of largest institutional and mutual fund holders.
3. Did you mean expenses and not price? Yes expenses matter but there are just one item among many to factor into your buying decisions. It's not the first or foremost issue in my opinion.
4. I do it all the time but it has to be a special fund.
No expert here, just learning like everyone else.
2. If you particularly like Berkshire, why not buy BRK-B shares? Otherwise, what Mark suggested above. If you really want a pure play on Berkshire, I'd just add some BRK-B rather than add a fund that has it as a holding.
3. Expenses matter although I think I'm more flexible than many, as long as I consider something "reasonable". I think it's a factor but not a priority.
4. Never say never, but in recent years no. It would have to be a very special fund and I'm just not finding as many of those lately. I don't remember the last time I paid for a TF fund.
2. Brk.B is basically a mutual fund on its own, so you could just buy it; or, SEQUX is one solid option that's always owned a chunk of Berk. You're right that M* doesn't help much in your search; the fund holdings info for a particular stock lists only the top 10 funds, and a lot of the time the top 10 doesn't get beyond ginormous index funds and such. I don't know of another source.
3. For me too, expenses are one factor, but not the whole picture. But I do look for something really special in a fund I'm considering with a higher ratio, i.e., over say 1.25%.
4. TF funds are an "it depends" thing for moi. For one thing, if the choice is between a share class with and without a TF, the TF fund has a lower expense ratio. Many times, especially if you're putting a sizable chunk into the fund, you'll get payback via the lower ER of the TF fund in a relatively short time.
Also there are deals and tricks to take into account: additional buys into TF funds can be much less than the original TF, through DCA purchase; and some brokerages give discounts on TFs, like Vanguard's, which cuts the TF nearly in half if you keep a certain balance in their funds.