[USER]

My daughter, who is a freshman majoring in business, is working on a competitive club application that asks, “If you can pick one stock, what will it be & why.”

She has been deeply influenced by the principles in “The Simple Path to Wealth” by JL Collins and “Quit Like a Millionaire.”

Naturally, she gravitates towards VTSAX due to its diversified, low-cost nature, and the long-term growth potential it offers, aligning perfectly with the investment philosophy she’s learned.

However, since VTSAX is a mutual fund and not a single stock, how can she best frame her response to emphasize its advantages in this context?

If VTSAX isn’t the ideal choice for this question, what other options should she consider writing about?

[Sadie]

Please let her do this on her own. I know you think you’re helping but you’re stunting her growth.

She should answer the question, not talk about a safe investment strategy.

It’s a business class.

[Tola]

She’s in college. Let her do her own homework. Please.

[Kira]

Kudos to her upbringing in the index fund spirit! HOWEVER, for the sake of this assignment, I would still pick 1 stock.

How about Novo Nordisk or Eli Lilly and the “semaglutide revolution”?

Or something else along the lines of interesting industry or company

[Beth]

I think she could pick VTSAX if she goes into describing the companies that make up the stock, how and why they are chosen and when they are replaced and why.

She can start with explaining how this index was created and how its consistently stood again most investors that owning this stock is owning a small part of ever business in the index.

She will probably learn so much! Love this

[Scott]

I think the focus would be on identifying companies that have either some long term durable business advantage and/or disciplined capital allocation over an extended period of time (few companies have both).

And don’t go with the two or three everyone will pick (eg Amazon, Warren Buffet, Apple) or recency bias (Nvidia).

But she should pick the couple of themes she wants to highlight then find an example.

[Daisy]

She will need to come up with her own answer, which will be the best answer.

How parents think and how younger folks think is way way different.

She will be fine.

[Frank]

Personal finance is different from majoring in business. What she should be writing about are the attributes of a particular company and why you would want to own it from a business perspective, like a Warren Buffett would do.

[Amy]

Let your daughter figure out the response in her own. You aren’t doing her any favors by helping her with her homework.

[Audrey]

Personal finance and business/finance as a profession are very different.

From a personal perspective, most people don’t have the time, energy, or deep pockets to take enough positions in single stocks to build a solid portfolio.

An investment bank or PE enterprise does.

Also… shouldn’t she be doing her own work?

[Chris]

Picking one stock also brings into question which company in the world does the student trust the most and why.

First off it is a business college class focusing on businesses.

You have to be careful straying from the assignment.

Some professors reward that, others will give you a flat out F.

Grades in college are subjective.

A PHD professor asking one specific question and getting a general mutual funds that represent the entire market

[Cari]

Ok, the question isn’t asking what her overall investment strategy is. It’s asking can you analyze a business?

Can you figure out its growth potential etc.

A lot of B school kids go on to work for funds, right?

How do those people pick stocks to put in a fund?

A lot of kids go on to work for corporations, how do the in house financial people analyze the health of their companies?

There’s a lot to understanding the fundamentals of a company’s stock.

[Karolina]

Mom/dad..it”s time to let your kid fly on their own especialy in a very safe exame above

..as an x college prof..ease dont do this to your kid.

[Jeannette]

She needs to answer this on her own. Her answer helps her professor and business school club understand where she is coming from, what level analysis comprehension she is at.

Let her answer this on her own and she’ll have confidence in knowing she’s got what it takes or where she needs to grow more.

You answering it for her in any way keeps her small and under your wing.

Time to let her leap.

[Rick]

VTI seems like a possible answer. Since there are many conglomerate companies that are “single stocks”, I would push back if told VTI doesn’t qualify.

[Krista]

Her professor (or whoever judges this club application?) will have office hours, so she can go talk to them about whether VTSAX would be an appropriate response (with reasoning).

Otherwise, I agree with some others that part of the growth and learning is in doing this research for herself!

[Bethany]

Tony Wilbur I can’t even fathom having my parents help me on a university assignment aside from maybe proofreading.

It’s okay to bounce ideas off someone but the ideas need to come from the student.

Especially for such a thought-process type assignment

Edit: unclear if this is a university assignment or something extracurricular but my opinion is the same

[Kathryn]

Whatever her answer, the explanation should address 1) her time horizon; 2) her risk tolerance; 3) PE ratio and whether the stock is a good value.

In her case, maybe more of an aggressive growth stock, something technology based.

[Jennifer]

I think I failed a job interview question on this once. She should just pick a company

[Maureen]

Her researching and developing the answers is key to her growth and the whole point of the application please let her do on her own

[Author]

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