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Portfolios 309: Adding Stocks to a Fund Portfolio

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1.
Stocks are required to distribute capital gains to their shareholders every year.
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False. Mutual funds are required to do this if there are any to distribute, but stocks are not. With stocks, there are no capital gains until the owner sells them for a profit.
2.
In stock investing, the profit you earn on a stock after you sell it is a _______.
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Capital gain. Capital gains are the primary "oomph" that stocks can provide.
3.
Buying a collection of stocks can be cheaper than holding on to a mutual fund because _______.
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Both of the above. The nature of the cost structure can benefit stock owners who hold their stocks for long periods.
4.
Which statement is true?
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Investing in stocks can be less expensive than investing in funds. It's especially true if you're planning to buy two dozen or so large, steady companies and hold them for many years. You will pay the up-front trading costs and not spend another dime until you sell. With mutual funds, however, you'll pay annual expenses.
5.
If you want to add a little oomph to your mutual fund portfolio, _______.
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Add a few stocks at the edges of your portfolio. Adding stocks in small doses can rev up your returns and shouldn't damage the nest egg. An all- stock portfolio will likely have more than a "little" oomph, though.