Why take the of risk of owning individual stocks?

 Consider this excerpt from a story in the Detroit News about General Motors' stock: GM.  Then look at the graphic that shows how the stock has performed over the past year compared to the index: the Dow Jones Industrial Average (DJIA) 

The DJIA Index has a history dating back more than 100 years.  You can own the DJIA Index instead as an ETF.  The ticker symbol is DIA.  It is purchased like a stock, but this type of mutual fund has very low expenses and diversifies your holdings across 30 stocks.

No one can fool you or take advantage of you if you buy and keep it for life. 

You will always know what you own.  It is the most widely reported market index. And your cost savings make a gigantic difference over time. 

Why buy individual stocks with all the risks that are involved?

Patrick Broderick

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From the Detroit News online:  

"1 year after going public, GM has lost 1/3 of its value"

"One year after its much-heralded IPO, which raised a record $23.1 billion, General Motors Co.'s stock has swooned 30 percent from its initial offering price.

... post-bankruptcy GM made its triumphant comeback to Wall Street as a new, slimmer company with fewer workers, less debt and a lower cost structure.

The IPO — the world's largest ever — raised $23.1 billion. GM shares quickly jumped above the $33 initial offering price and soon rocketed to near $40...

But the ascent was short-lived. GM's share price plummeted to a low of $19.05 in early October. Despite seven consecutive quarters in the black and profits of $7.4 billion so far this year, investors have largely withdrawn to the sidelines. Morgan Stanley last week dropped GM from its list of recommended stocks."
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 Link: http://www.detnews.com/article/20111115/AUTO01/111150369/1148/A-year-after-going-public--GM%E2%80%99s-stock-has-lost-third-of-its-value

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More from Patrick Broderick:

The lower graph on the chart shows the performance of the DJIA, or Dow Jones Industrial Average.  You can easily purchase a low expense Exchange Traded Fund (ETF) that will closely mirror the returns of the DJIA Index.  The ticker symbol DIA can be owned in any account and bought anywhere you buy stocks.

It's gross annual expense ratio is 0.18%, which is 80% to 90% less expensive than the annual costs of most stock mutual funds.


You can easily substitute lowest cost ETFs for most of the investments you already own.  We've guided hundreds of investors how to cut costs and save a fortune.  Let us know if we can do the same for you. There is a great deal of money you can keep in your pockets for the rest of your investing life. Send us an email at BroderickETF@gmail.com


Here is a list of the current 30 Holdings in the DIA:

International Business Machines
Chevron Corp 
Caterpillar Inc 
Mcdonalds Corp
3M Co
United Technologies Corp
Exxon Mobil Corp
Coca Cola Co
Boeing Co
Johnson & Johnson
Procter & Gamble Co
Wal Mart Stores Inc
Travelers Companies Inc
American Express Co
Du Pont E I De Nemours & Co
Home Depot Inc
Verizon Communications Inc
Disney Walt Co
Merck & Co Inc New
Kraft Foods Inc
JP Morgan Chase & Co
At&T Inc
Hewlett Packard Co
Microsoft Corp
Intel Corp
Pfizer Inc
Cisco Sys Inc
General Electric Co
Alcoa Inc
Bank Of America Corp

Find more information on the SPDR Dow Jones Industrial Average ETF (DIA) click on SPDRS under the LINKS shown on the upper left column of this page.