hifalutin' stock market investors!

[emmline]

Over the years, my husband bought bits of stock here and there, without keeping good records as to what and where.
When I reorganized things a couple or so years ago, I gathered what evidence I could of these random stock holdings and sold them all,
or so I thought.
Somehow, for the past few years, we've continued to be the proud owners of .072815 shares of Newell Rubbermaid. The approximate value of this fraction is, as of today, about 57¢.
So, a couple of times a year, we'd get these dividend checks like the one pictured here:

We've actually cashed 'em, a couple of times, but I kind of hated to put our hardware store or even my bank to the administrative bother of
handling a 1¢ check, and it certainly wasn't worth the sacrifice of the paper it (or its envelope) are printed on.
Finally, a couple weeks ago, I succeeded in logging onto Computershare and selling the fractional share. I was helpfully informed that since the transaction cost exceeded my proceeds, I would not be seeing the money and did I wish to proceed anyway? Yes, I did.

But you've got to wonder... Shouldn't it be some human's job to notice this stuff, contact the investor, and suggest the ridiculous fraction be liquidated?
I guess not. And I guess I won't be cashing this last one since I scribbled on it.

[Cork]

Actually, any one of a number of things could have happened. For instance, your husband might never even have purchased that particular stock, but, in a financial world where companies sometimes get merged with each other, and sometimes split off from each other, a share (or fractional share) of a company's stock could thereby have become yours, as a proceed of such a merger or split.

For instance, suppose your husband bought a share of Corporation "A", and suppose that Corporation "A" owned Company "X", Company "Y", and Company "Z". Then, however, suppose Corporation "A" decides to spit off, or sell, Company "X", for Company "X" to then become a separate entity. Your husband would then still own a share of Corporation "A", which still owns Company "Y" and Company "Z", but because Company "X" is now a separate entity, your husband would also own a share of Company "X", too. Therefore, although he began with only a share in Corporation "A", he now owns shares in Corporation "A" and in Company "X".

It doesn't always work that way, but it could.

[missy]

yep, Cork, that's how I got my Smucker's stock - when they bought Crisco and Jif from P&G.

When they bought Folgers, we didn't get stock percentages given, but would have also had to put some cash up. I didn't.

[cowtime]

Em, that check is just a bit less than one my dh gets a few times a year-usually about 5 cents. His all goes back to the big miner's strike in ....'89?...he was one of the 100 miners that marched into Pittston's tipple and took over the thing in a stand off that lasted several days. The union bought all of these guys one share of stock in the company, so that technically, they were going onto the premises to inspect, as part "owners" or some such legal mumbo jumbo. He's kept it just to be a tiny thorn to the company. They have to send out proxies, reports, etc and he just laughs when he gets them.

[Cork]

yep, Cork, that's how I got my Smucker's stock - when they bought Crisco and Jif from P&G.

When they bought Folgers, we didn't get stock percentages given, but would have also had to put some cash up. I didn't.

One of the benefits to membership in a mutual fund is that a fantastic amount of work gets done by a team of professionals, the fund managers. Otherwise, a stock owner must know how to correctly evaluate the value of a stock, and that's no easy thing to do, especially as nearly all stocks are in a constant state of value flux. Those who can accurately evaluate a stock could be in a position to make a fortune on Wall Street, and a stock holder who doesn't know how to evaluate a stock is no more than a gambler. For most investors, a mutual fund is a much safer bet.

[missy]

My stock is all from profit sharing - that's what our "retirement" is. I just turned old enough to be able to divest (have to keep at least 40% in P&G, however), but haven't had a chance to go and talk with someone about it.

But hey - we just raised our dividend!!!

[emmline]

For most investors, a mutual fund is a much safer bet.

While index funds spare you even the iffiness of trusting the fund manager to be smarter than the market.
(And they usually aren't. ymmv. of course.)

[Cork]

...(have to keep at least 40% in P&G, however)...

Proctor & Gamble has long been a conspicuously well managed company, very good, and I wouldn't loose any sleep over such a long term investment.

[Cork]

For most investors, a mutual fund is a much safer bet.

While index funds spare you even the iffiness of trusting the fund manager to be smarter than the market.
(And they usually aren't. ymmv. of course.)

Right, a mutual fund being a portfolio of stocks, and an index fund representing an index of stocks, it appears that long term investors could do well with an investment in a Standard & Poor's index fund, as a relatively safe bet, but a well run mutual fund could outperform it, provided that it is well run. Honestly, however, either of these vehicles could serve most investors quite well.

My earlier point had to do with those individuals who could take outright, or "naked", stock market positions, as they who had better know what they're doing, and as they who had better keep up to date, day to day, with the positions they have taken.

Then, of course, there are the gamblers.

[missy]

...(have to keep at least 40% in P&G, however)...

Proctor & Gamble has long been a conspicuously well managed company, very good, and I wouldn't loose any sleep over such a long term investment.

Except when Dirk was at the helm, but we won't go there.............. still have nightmares over that!!!