Proposed investments for understanding

Two acquintances who have never focused on the financial markets to any great extent have decided to each choose five investments and follow their performance.  This is definitely not a contest but a collaborative effort in the event that the responsibity for managing or even just better understanding their family's investments should fall on their shoulders. 

While my long time and knowledgeable friend J is adamently partial to diversification of asset categories through index funds, not a bad way, even smart way, of thinking, this experiment will, with modest allocations, motivate the two participants to follow, discuss, and understand individual stocks, hopefully a starting point.  The indexing approach can follow these basics that can create real interest.

The suggestions for one participant at the moment are:

Apple(AAPL)
Accenture(ACN)
Vanguard Diversified Dividend Appreciation fund(VIG)
Qualcom(QCOM)
Invensense(INVN)

Since Invensense is a small cap,  notwithstanding having no long term debt and $229 million shareholders equity, the support of some smart analysts, and Fidelity and Qualcom as its two largest shareholders, there is one more fallback choice for those uncomfortable with INVN.  That's Chevron, (CVX), the highly rated oil and gas giant with a 3% dividend and strong balance sheet.  Come to think of it, maybe this participant should have six stocks to follow.

I hope that this idea holds and is executed with equal weighted investments in the coming weeks.  Following what real money is doing every day is better than reading any textbook.  That's just my opinion and needs to be done both diligently and with small amounts of money through low cost discount brokers that allow a sense of some fascinaton and amusement.


Postscript  ---  included above are investments that have potential that is viewed by many.  As a counterweight following JCPenney(JCP) could be enlightening.  It's either a bankrupt company within the next year or the coming of a new Target.