This week, we thought it would be fun to celebrate our successes, so we asked a pretty simple question: "What is the best investment you've ever made?" We also asked readers to describe why they originally bought the investment, if they still own it (or sold it), and what they learned from the experience.
We received many responses to this question--both from our Morningstar Discuss forum users and from our @MorningstarInc Twitter followers--some of which surprised us. To read the full thread and weigh in on this topic, please click here.
Here’s a summary of what our readers had to say.
Many respondents said they've made a lot of money over the years investing in Vanguard funds and holding them for the long haul.
For example, retired at 48 details an investment made more than 60 years ago in Vanguard Wellington (VWELX). This particular holding was apparently passed down and has remained in the family’s account for decades. "The investment came from spouse's father in 1953 … not ever tempted to sell, either, for it is in a taxable account. No tax-advantaged 401(k)s or IRAs in those early days.”
Vanguard Health Care (VGHCX) was another fund that many respondents pointed to as one of the best investments they've ever made. "This is an easy question: It was the Vanguard Health Care Fund purchased in 1991 that I put into my IRA. A few stocks have gone up faster, but never by so much. I made several investments in the fund after the initial investment, and I haven't bothered to sort out which one went up by how much, but my average on the shares is up 12 times. All dividends were reinvested of course, and yes, I still have it,” said Jimoak. Other posters who mentioned Vanguard Health Care include BobVermont, tommy06, DennyF, and BoomerGuy, whose holding in the fund dates back to the "early to mid-80s" and has since been converted to Admiral shares (a lower-cost share class offered to investors who meet a minimum investment threshold).
W004dal's best investment turned out to be contributing to retirement accounts from October 2008 through August 2010, putting money into Vanguard Institutional Index Instl Pl (VIIIX), Vanguard High-Yield Corporate Inv (VWEHX), and Vanguard STAR Inv (VGSTX). "What I learned: Diversification isn't just for down markets; don't stop contributing to your 401(k) even in tough times; and the best time to buy can be when everyone else is fearful," W004dal said.
Other Mutual Funds
Other respondents mentioned some well-known holdings from fund families like T. Rowe Price and Fidelity as being among their best picks. For instance, stillers invested in Fidelity Magellan (FMAGX) circa 1980-81 (the Peter Lynch management era). "We sold it all around the time Lynch left and replaced it with Joel [Tillinghast]'s brand-spanking-new Fidelity Low-Priced Stock (FLPSX) … we held [Low-Priced Stock] as our only open-end fund until around the mid-1990s, and finally sold the last shares in 2014."
T. Rowe Price Health Sciences (PRHSX) was mentioned by both reesenut and badlee. Saji1986 put a "sizable chunk of my IRA" into T. Rowe Price Capital Appreciation (PRWCX) in 2009. "As long as it keeps performing and has consistent management I see me holding this fund well into my retirement, which will hopefully be in 15 years or so," Saji1986 said.
Arora1 also mentions a holding in Fidelity Low-Priced Stock, along with longtime positions in First Eagle Global (SGENX), Berkshire Hathaway (BRK.B), Fidelity Contrafund (FCNTX), and American Funds New Perspective A (ANWPX).
A few readers said they considered PRIMECAP Odyssey Aggressive Growth (POAGX) among their wisest picks, including tommy06 and Chinfist. "Probably [Primecap Odyssey Aggressive Growth] has been my best, which has gone up almost 100% since I bought it 3-4 years ago," Chinfist said.
Some other funds mentioned were Mutual Qualified Fund (now Franklin Mutual Quest Z (MQIFX), bought in 1984 by mrlessgovt and still owned today), and Mutual Shares (now Franklin Mutual Shares Z (MUTHX), purchased by tallaguy in 1979).
Many readers recounted big profits made through investments in individual stocks. For example, several mentioned holdings in Berkshire Hathaway among their best all-time investments. Buffett true believers include Arora1, charger, proxysteve, theDumberone, and Hobocon.
Another frequently mentioned pick was Apple (AAPL). Investors in the stock include OOPS101, Trailman, MNfish, NWBuff, and KitCat. "I have been a Macintosh owner and fangirl since 1991. All the analysts hated it, but I strongly believed in the company and Steve Jobs. What I learned is to ignore most of the pundits," said KitCat.
Among stock investments, the longest holding period mentioned was 60-plus years. "I have a significant holding of inherited Verizon (VZ) shares with a purchase date going back into the early 1950s when it was GTE.... I keep them not only for the sentimental value but because they churn out very nice annual dividends that get reinvested,” said rforno.
"[I] bought a small Swiss biotech company in early 1980s and it was repeatedly bought out until today I have a nice position in Biogen Inc (BIIB),” said Margaret.
Retiredgary’s single best stock purchase was Southwest Airlines (LUV). "My wife bought [Southwest stock] for her IRA in the early 1980s. It has paid off well over the years, and she still owns some of it."
Marti038 picked up shares of Netflix (NFLX) on a dip, and that worked out well. "I bought Netflix for about $70 after they jacked their rates a few years back. I thought the market was too tough on them and they were a good value. Of course, I sold it a few months later around $120 and thought that I had roped the moon. Made an excellent return, but I obviously wish I would have held onto it longer."
For WillieB1, the answer to our question was easy: "$8,000 in 1984 in Home Depot (HD), now worth over $2.5 million."
Phillips2010 had a big score with Red Hat (RHT). "More than 1,000% appreciation. Just didn't buy enough of it. I keep it to remind myself of what can happen in this business."
A few responders said they like to invest in what they know. For instance, JAuden’s best stock investment was in Chipotle Mexican Grill (CMG). "During the financial meltdown I happened to stop in for lunch one day and the line for burritos was literally out the door. That prompted me to take a look at their financial statements. I saw that they had no debt and were set to grow their earnings even during a recession, plus the P/E was only in the teens which is cheap for a fast-growing company…. The shares have grown 15 times and I still own them."
Another reader who likes to buy what's familiar is grybeard. "Being a longtime, 40-plus years rider of Harley-Davidson motorcycles, when Harley-Davidson (HOG) was in the $9 range during the 2008 crisis I just had to believe the company would bounce back… [I] bought a sizable position that I sold 5-6 years later for $70 and change.”
Finally, many readers mentioned that the single best investment they had made was investing in themselves, via education. In fact, education was mentioned in this thread more times than any other single topic. According to some readers, education was a way to enrich their “human capital” and boost their earnings potential. Other readers mentioned that pursuing a degree in business, finance, or accounting, or getting their Certified Financial Planner designation, helped them learn more about investing and ultimately make better investment decisions.
Karen Wallace has a position in the following securities mentioned above: POAGX. Find out about Morningstar’s editorial policies.