New Investments

A few days ago I got my bonus (and taxes wiped out most of it), so I decided to invest in a few new securities (and added to an old one).

Apple (AAPL)
Russell Micro-Cap (IWC)
TRowe Price International Discovery Fund (PRIDX)

I got Apple at $85.16. It shot all the way to $97, but dropped down to $89. I bought this as a highly speculative investment. I figured that if CNN and Time was concerned about a company releasing a new phone than the stock would certainly get a pop when the announcement happened. I was right, but now have held it longer than I should have. Blame my company's policy of hold all securities for at least 30 days. I'm still trying to decided should I sell or keep it.

I also invested in the Russell Micro-Cap (companies valued under $40 million) as a medium speculative investment...also as a diversification method. The expense ratio (amount they charge you per year) is pretty low and this is a group of stocks I wasn't invested in. We'll see how it goes.

Finally, I put more money into the International Discovery fund. This fund invests in foreign small cap stocks. I've been reading tons of articles about how the time of foreign stocks might be over, but they said the same thing for REITS (real estate investment trusts) 2 years ago! Again, this is an area I'm not too exposed to. What I don't like is the expense ratio: 1.26%. I would invest in Vanguard's Explorer Fund (not run by Vanguard, by the way) with its super low expense ratio, but it is closed to new investors. Too bad. Maybe it'll open back up.

On a side note, I'm currently invested in Vanguards Total International Stock Index fund. Great fund because it is cheap and exposes you to most of the world. However, it is really a fund of funds. Basically, it invests in three other Vanguard funds: Emerging Markets, European, and Pacific Stock Index funds. However, there is an interesting rule. Funds of funds can't take the foreign tax credit (paying foreign taxes are tax deductible). To fix this, Vanguard is launching early this year a International fund based upon the FTSE Index. The new fund will differ from the Total International by directly investing in foreign stocks (can take the foreign tax credit) and will now have 5% invested in Canada. Once it comes out I think I'll move my Total International holdings over.

Here is some more info on the new fund:

http://www.marketwatch.com/news/story/new-vanguard-international-fund-breaks/story.aspx?guid=%7B5AB5474A-3678-48E0-A343-993C62730136%7D