Investing 102

[NOVA]

is it a buyers market ....... or is it going down some more :_paranoid - thinking about AAPL?,COKE,HD,MA,PM,T,COST,CVX,MCD,MRK,WFM,MA,SBUX ,DIS .......... this is the best thread on the board :thumbsup:

[toy71camaro]

I increased my MCD today.. with a 3.7ish yield and current rate, and a 10% sale on when i bought last time. I thought it was a good "deal". ;)

[GregWeld]

is it a buyers market ....... or is it going down some more :_paranoid - thinking about AAPL?,COKE,HD,MA,PM,T,COST,CVX,MCD,MRK,WFM,MA,SBUX ,DIS .......... this is the best thread on the board :thumbsup:



No one has an answer to that.... your guess is as good as the next guys.


Here's my answer to that question. SCALE IN. If you want to eventually hold 100 shares -- buy in 25 share increments.... up or down you'll end up somewhere "close".

If you buy tomorrow the market WILL go down. If you don't buy tomorrow it WILL go up. Trust me on this. You just can't game it like that.

:cheers:

[GregWeld]

I increased my MCD today.. with a 3.7ish yield and current rate, and a 10% sale on when i bought last time. I thought it was a good "deal". ;)


AND THIS MY FRIENDS IS THE WAY TO THINK AND ACT. This kind of thinking will get you were you want to be. Do NOT be afraid to buy more of good stocks/companies just because they're lower than were you originally made a purchase.

If it was a tool in the Snap-On truck -- you'd be ELATED to buy it on sale!


:cheers:

[takid455]

An event happened today with one of my holdings. Linking to page http://m.seekingalpha.com/article/996371

Actual company aside, can some explain the benefits to this action vs buying the amount of shares for the net out of pocket? Sort of understand the article but fail to see the advantage in the action vs simply buying a chunk of shares today.
Action in question

Buy 24,413 January 2013 $3 call options for $13 each
Sell 24,863 January 2013 $2.50 put options for $11 each

[GregWeld]

It's called a "collar" --- where the person buys one position and sells another... Options trading isn't something for Investing 102 because it's really complex. There are many ways to trade "OPTIONS". Maybe that's why my boat was called "Options"?? I wanted to call the dingy "Puts and Calls" - in other words taking one to shore or picking them up? LOL



http://i919.photobucket.com/albums/ad33/gregweld/Boat%20trip/Boattrip002.jpg


So with Options trades -- you can do one of two BASIC things (there's many ways to trade options):


Investopedia explains 'Put'
When an investor purchases a put, he or she expects the underlying asset will decline in price. The investor will then profit by either selling the put options at a profit, or by exercising the option. If an investor writes a put contract, he or she is estimating the stock will not decline below the exercise price, and will not fall significantly below the exercise price.

Consider if an investor purchased one put option contract for 100 shares of ABC Co. for $1, or $100 ($1*100). The exercise price of the shares is $10 and the current ABC share price is $12. This contract has given the investor the right, but not the obligation, to sell shares of ABC at $10.

If ABC shares drop to $8, the investor's put option is in-the-money and he can close his option position by selling the contract on the open market. On the other hand, he can purchase 100 shares of ABC at the existing market price of $8, then exercise his contract to sell the shares for $10. Excluding commissions, the total profit for this position would be $100 [100*($10 - $8 - $1)]. If the investor already owned 100 shares of ABC, this is called a "married put" position and serves as a hedge against a decline in share price.

Read more: http://www.investopedia.com/terms/p/put.asp#ixzz2Bm20BkPM




Definition of 'Call'
1. The period of time between the opening and closing of some future markets wherein the prices are established through an auction process.

2. An option contract giving the owner the right (but not the obligation) to buy a specified amount of an underlying security at a specified price within a specified time.


Investopedia explains 'Call'
1. In some exchanges, the call period is an important time in which to match and execute a large number of orders before opening and closing.

2. A call becomes more valuable as the price of the underlying asset (stock) appreciates.


Read more: http://www.investopedia.com/terms/c/call.asp#ixzz2Bm2JfpdG

[GregWeld]

In honesty -- the boat was named "Options" because of the Microsoft options that paid for it! And we said that owning her gave us "Options"...

But you wouldn't believe how many people thought I was an Option trader!


:lol:

[Bucketlist2012]

What a Beautiful Trawler...

Reminds me of my Younger days..My Dad had a 40' Farallon Eagle Trawler, and then a 34' CHB. Among other Boats.

Boy was it a lot of work but the memories are forever..RIP Dad..

[GregWeld]

What a Beautiful Trawler...

Reminds me of my Younger days..My Dad had a 40' Farallon Eagle Trawler, and then a 34' CHB. Among other Boats.

Boy was it a lot of work but the memories are forever..RIP Dad..



Mine was a 1991 47' Grand Banks Wide body "Motoryacht"... that is their description. They made a Europa - a Classic - and the Motoryacht...

All fiberglass.... and I had the optional Aluminum windows (otherwise they're wood framed) and the bigger twin 300 hp Cummins turbo diesels.. she'd cruise at 14.5 knots and top out at 17. Weighed 25 tons! Burned 11 gallons per hour... She carried 600 gallons of fuel - and I had a 500 gallon per day water maker - so we could stay out "forever".

[Bucketlist2012]

Mine was a 1991 47' Grand Banks Wide body "Motoryacht"... that is their description. They made a Europa - a Classic - and the Motoryacht...

All fiberglass.... and I had the optional Aluminum windows (otherwise they're wood framed) and the bigger twin 300 hp Cummins turbo diesels.. she'd cruise at 14.5 knots and top out at 17. Weighed 25 tons! Burned 11 gallons per hour... She carried 600 gallons of fuel - and I had a 500 gallon per day water maker - so we could stay out "forever".

Ah yes...The Grand Banks is the Mac Daddy. Dad's was the less expensive version...Still very nice, but no Grand Banks...Your picture brought a tear to my eyes remembering the good times...Memories forever in the Bay area..

We ran a single screw Cat3160 in the 40', and a Ford lehman in the 34'..You get really good handling a single screw in tight places...

He taught me the finer things of life and how to work hard for them..He was a spender and not an Investor/Saver...And in the end it cost him..

That is why I turned out like I did...I did not want to have a bunch of"stuff" and no liquid assets...I told the wife a few months ago that spending is on hold until sometime in 2013 at the least...I need to keep liquid, nimble and ready..I can always spend more later...

But boy you stirred up some memories...We had everything from Steel hulled Chris Craft/PT Boats with dual 327's, to 34' Sport fisherman with dual 454's, But the Trawler was the go anywhere, anytime Yacht, that has a certain look that is priceless..

[GregWeld]

My kids and my nieces grew up on the boat... Desolation Sound... Puget Sound... we used to spend the entire month of August on the boat. We had the dingy - two kayaks - and an 18' Grady White that I dragged... we looked like a friggin' bunch of sea gypsies when we'd anchor up! Kids would go ashore and hike and play on the beach... or we'd go skanking around in the little boats... crabbing and shrimping... swimming and water skiing... Your only worry was what we were going to have for our next meal. Great times! I miss it terribly but I don't think it would be the same without the kids.


Entering Desolation Sound (Canada EH!) The water there is "brackish" and because it's snow melt - it heats up as it flows down the rocky mountain sides and the general top four or five feet of water is 70ish degrees and "fresh" -- it sits on top of the MUCH colder salt water... makes it fun when you jump off the boat and break thru that nice warm water and into the colder stuff!!




http://i919.photobucket.com/albums/ad33/gregweld/Boat%20trip/BoattripJuly2002047.jpg

[Bucketlist2012]

That sounds great...I know I will take the memories to my Grave..My Dad's passion was Boating...

Sounds like good time's Greg.. Something that will stay with you forever..

Thanks for reminding me of the good times...I have been a little peeved the last few days....You know why...

You have a great night...I am off to snuggle with the wife and enjoy some down time..

I may never leave the bay area because of all the memories..Angel Island, Sausalito, Farallon Islands...My Childhood was on the water before I went off and did other things.I wish i would have spent more time with my Dad after growing up....TTYL:cheers:

[GregWeld]

I stumbled on a story in the Seattle Times by the Financial writer... about his Father and the lessons that Dad had taught him... I thought "hmmmmm.... sounds similar to what I've been trying to "teach". I just cut and pasted the basis for the story without the underlying story.

+++++++++++++++++++++++++++++++++++++++


• A “perfect fit” is better than an “optimal portfolio.” My dad liked to know and understand what he invested in; when he looked through the holdings of a mutual fund and saw a host of names he didn’t recognize, it made him nervous. As a result, no small-cap fund ever passed his sniff test. Every time he talked to the portfolio advisers he worked with at Fidelity and Vanguard, they told him exactly what I had said, namely that he had “a hole in the small-cap space.” They found other “suboptimal problems” too.

My father understood diversification, but he also understood comfort. Missing out on small-caps might have dampened the returns of his portfolio compared to the perfect asset allocation, but it never threatened his ability to reach his financial goals. Meanwhile, he slept well every night knowing what was in his portfolio.

If you have the choice between an optimal portfolio or an optimal night’s sleep, enjoy the nap.

• “Don’t mess it up” is a good investment mantra. Because my father was so risk-averse for so long, he lucked out when the 1990s came and helped him catch up for the years when he was more focused on his day job than his retirement savings. That said, once the oversized returns of the Internet bubble got him to the point where he was “set for life,” he was more concerned with protecting his nest egg than growing it. The security it gave him was priceless.

Having secured his don’t-mess-it-up-money against real loss, Dad felt free to take more risks with the rest, or just to spend it. Mostly he saved and invested the money, but he never worried about his strategy — or a market event like the financial crisis of 2008 — turning his life’s work into daily worries about running out of cash.

• All that matters is where you are, and what happens next. My father had a remarkable ability to remember his financial mistakes — so that he did not repeat them — but to never linger on them or to let them change his next move.

Over the years, he bought a few stocks that were duds, and had some others that he gave up on too soon, before they rebounded or went through a big buyout that could have lifted his returns significantly. He never let the rare mistake bother him, which is why he typically moved quickly to the next success.

“I can’t have that one back,” he told me recently, after I told him that a bank he had held for years — but that he gave up on in 2011 — finally had found the long-awaited buyer and the price pop he always envisioned. “There’s no sense thinking of what might have been. I’ve got what I’ve got, and I’d rather focus on that.”

• Seek counsel, but make your own judgments. My dad was big on “trust, but verify,” so whether he was getting financial advice from the pros or from his son — whether it was a new counselor or someone he had dealt with and followed for years — he took in suggestions, examined the research and came to his own conclusions. Taking that responsibility meant he had no one to blame but himself if things went wrong; given his natural cautious tendencies, it was a solid safeguard.

“I’m the one who has to live with the results,” he said, “so I’m the one who should make the decisions, even if all I am doing is confirming that [someone else’s] idea is the right move for me.”

• There is no one “right way.” Slow-and-steady won the race for my father, but that didn’t mean someone couldn’t go hard-and-fast or big-and-bold and get to the same place. They’re just different approaches to the same problem, but too many people jump from one strategy to the next and those changes leave them forever playing catch-up.

My father taught me that financial success is less about finding the proverbial “best strategy” than about coming up with “the best strategy for me.”

• The easiest way to make sure you get more out at the end is to put more in at the beginning. Since he couldn’t control the markets and wanted to mitigate risks, Dad worked hard at what he could control, saving more so that he could afford to manage the money conservatively, in keeping with his personality. He felt that savings was an accomplishment unto itself; watching it grow to where it could care for his loved ones was an achievement. In that way, he was an accomplished man who achieved his financial goals.

You could learn some things from a guy like that; I sure did.

[WSSix]

Good post. That's the strategy I'm going to follow.

[Bucketlist2012]

Great Post Greg...:thumbsup:

[GregWeld]

So during this "choppy" market - which I fully expect to to be - and have said so on several occasions. I'm not "smarter" than you guys... I don't have a crystal ball... but I do have common sense. If you listen to the news (financial news programs) surely you can judge by the truly smart peoples statements that we "need" to fix the fiscal cliff before markets can continue their climb. It's the old - markets don't like uncertainty...

BUT here's what I want you to do. If you have Schwab - or Google Finance website... Pull up a chart of Kinder Morgan Partners (KMP). I will remind you - that I'm not pushing KMP - I do have a holding in it which is why I look at it - but it's a great example of what I want you to look at...

Look at this chart in YTD (Year to date)....not a great chart - in fact it's down YTD. Now look at it 1 YEAR chart... it's lumpy and bumpy but in the end it's UP 7% over that period -- NOTE THE DIPS -- Now look at a 3 year chart... Wouldn't you have loved to bought in the dips? OH and by the way - Wouldn't you have loved getting $4 per year per share in dividend ($12 over the 3 year period)? Now look at the 5 year chart... Remembering that even if you'd have bought at the very peaks you can find - that you'd have also received $20 in dividends during this period.

Now ask me "when should I buy?" And what's my answer? Buy when you can IF you're truly a long term investor... because I can't see when the next dip is going to be - and even if the stock dips - would you have missed out on the dividends it's paying? They'll pay 1.26 on Wednesday... and in 3 months they'll pay that again.... etc.

This is what you really need to look at. LONGER TERM... the fiscal cliff will be something we talked about. (I hope).

[Payton King]

If everone is thinking that dividends will be taxed at a higher rate, say 25% instead of 15%. Would you change your strategy? I know you are living off the dividend stream, but would you change the dividend to purchase additional shares instead of taking the cash payment?

[bdahlg68]

Payton - I think you'll get a lot of people who say yes they would back out of dividend plays and others who would not. Simply - the change in tax rate creates an unknown. And it's a lot bigger than the tax rate itself. What does it do to stock prices? Would they drop, creating capital decay at least on the short term and therefore a lot of nervous investors? Keep in mind there is a large portion of these dividend stocks owned in tax-deferred accounts. And, that many people have them simply reinvested. While there is power in numbers, the people living off the income stream are the big dogs - and they can have a significant impact on the situation (and in some cases may influence the companies themselves). From the investing standpoint, I'd much rather pay 1-2% more in income tax the see these big changes on capital gains / dividends. That's just me thinking that long term - I want this income stream to be available and significant enough to make a difference when I'm retired. 25 years from now (if I'm lucky), the 1-2% I pay now in extra income tax would have been long forgotten about. Just my humble, semi-ignorant opinion.

[bdahlg68]

So as NLY gets pummeled again, I read this article. And although it's quite speculative, it got me thinking that now might not be a good time to move money out....

http://seekingalpha.com/article/1002571-dissecting-the-third-quarter-american-capital-agency-and-annaly-capital-management-earnings-releases

I also looked at the NLY chart going back to October 1997 and shrugged my shoulders... seems it's been like this before and recovered a number of times... in fact many years saw 20% swings it seems (2002, 2003, 2004, 2005 (yikes), 2008, .... and now 2012?). I'm going to be keeping a close eye and sitting tight for the time being. I have lots of time.....

[toy71camaro]

So as NLY gets pummeled again, I read this article. And although it's quite speculative, it got me thinking that now might not be a good time to move money out....

http://seekingalpha.com/article/1002571-dissecting-the-third-quarter-american-capital-agency-and-annaly-capital-management-earnings-releases

I also looked at the NLY chart going back to October 1997 and shrugged my shoulders... seems it's been like this before and recovered a number of times... in fact many years saw 20% swings it seems (2002, 2003, 2004, 2005 (yikes), 2008, .... and now 2012?). I'm going to be keeping a close eye and sitting tight for the time being. I have lots of time.....

I'm curious as to this as well. I was going to post up a question on peoples thoughts of their current situation. With the passing of their main man, feds changes, and now buyout, is it a desperation move, or a good move. They expect the stock to hit the $13ish mark now. I bailed (last week) before this last big dip because i didnt fully understand it and wasnt comfortable with it. I took a $3 loss. So I'm ok with that. LOL.

But I'm curious to see what their future holds (or what people expect).

[96z28ss]

I'm curious as to this as well. I was going to post up a question on peoples thoughts of their current situation. With the passing of their main man, feds changes, and now buyout, is it a desperation move, or a good move. They expect the stock to hit the $13ish mark now. I bailed (last week) before this last big dip because i didnt fully understand it and wasnt comfortable with it. I took a $3 loss. So I'm ok with that. LOL.

But I'm curious to see what their future holds (or what people expect).

I got out of NLY a couple weeks ago and took a $70 loss. which is better than thousands at the current price. The mortgage rates keep dropping and these companies become alot less profitable. Also their dividend will become less and less.

[GregWeld]

I'm thinking you all need to go back and re-read Investing 102 again.... you're starting to think and act like traders. Not Traitors - traders... :lol:

Annaly Capital Management (NLY) is now paying almost 14% dividend... and what happens on your old price that you paid too much for? Your dividends BUY MORE shares at LOWER prices... so not only are you buying a higher dividend payer -- you're bringing down your first cost as you go along... and that dividend (at 14%) is HUGE compared to other investments.

NOW --- I WARNED all along that NLY and JNK and HYG etc - or shares of their ilk -- ARE NOT FOR THE FAINT OF HEART! I said this repeatedly. These shares are to be bought for one reason only --- to boost your overall dividend percentage. So you own a Coke (KO) that pays 3+% -- IF you want to boost your dividend percentages -- you can stir the pot with the likes of the NLY's - the JNK's - the HYG's...

If you look at their charts -- they're RANGEY --- they move up and down -- not much in $$ terms but the percentage move is up or down 10% or said another way -- up 10 and down 10 is a 20% move! But ---- the big BUTT ---- even down 20% --- it's paying you 12/13/14% ANNUALLY....


I'm not defending this stock - nor any other... we're not about trying to pick the perfect shares... We're using EXAMPLES ---- and we're LEARNING about how to think about stocks - about how to use them - about dividends - etc ---- all things that many folks didn't know anything about a few months ago. So I'm saying to REMEMBER why you bought something in the first place... 'Cause the market will move up and down many many times in your lifetimes. You'll have to go back at times and really question why you bought what you did. :cheers:

[GregWeld]

If everone is thinking that dividends will be taxed at a higher rate, say 25% instead of 15%. Would you change your strategy? I know you are living off the dividend stream, but would you change the dividend to purchase additional shares instead of taking the cash payment?


Either way - you're paying the same tax. Whether you dividend is "re-invested" or is taken in cash (as I do)... the tax treatment is the same.



My "market sense" take on the changes in taxes is another story altogether!


The percentage of taxes paid on dividends or capital gains etc is really paltry compared to the returns they can make you over a multi year period of time.

Stocks -- compete for your money -- along side many other investment choices. So as an investor -- your choice could be Bonds - Real estate - Stocks - CD's etc. Money is going to go where people THINK they can make an adequate return factoring in taxes. Just as they do now.

My tax free muni bond portfolio makes about 4% tax free... so if you compute what you need to "make" after tax on a dividend stock -- then you just do the math and see what that takes. Obviously at 15% it's one percentage and at 25% it's higher! But then you also have to factor in the TOTAL RETURN.... so bonds that have no growth (held to maturity) ONLY pay their 4%.... A stock that I buy might pay 6% dividend -- but I have to factor the growth of capital into the equation too.

So the real answer is.... nobody knows what the idiots are going to do with the tax rates and THAT is a larger problem right now than if we actually knew. Because right now - we can't really plan - we don't want to invest and get caught making the wrong move etc... and that tends to tear up the "market". I think that's where we are going to be until we have a definitive answer.

[toy71camaro]

I'm thinking you all need to go back and re-read Investing 102 again.... you're starting to think and act like traders. Not Traitors - traders... :lol:

Annaly Capital Management (NLY) is now paying almost 14% dividend... and what happens on your old price that you paid too much for? Your dividends BUY MORE shares at LOWER prices... so not only are you buying a higher dividend payer -- you're bringing down your first cost as you go along... and that dividend (at 14%) is HUGE compared to other investments.

NOW --- I WARNED all along that NLY and JNK and HYG etc - or shares of their ilk -- ARE NOT FOR THE FAINT OF HEART! I said this repeatedly. These shares are to be bought for one reason only --- to boost your overall dividend percentage. So you own a Coke (KO) that pays 3+% -- IF you want to boost your dividend percentages -- you can stir the pot with the likes of the NLY's - the JNK's - the HYG's...

If you look at their charts -- they're RANGEY --- they move up and down -- not much in $$ terms but the percentage move is up or down 10% or said another way -- up 10 and down 10 is a 20% move! But ---- the big BUTT ---- even down 20% --- it's paying you 12/13/14% ANNUALLY....


I'm not defending this stock - nor any other... we're not about trying to pick the perfect shares... We're using EXAMPLES ---- and we're LEARNING about how to think about stocks - about how to use them - about dividends - etc ---- all things that many folks didn't know anything about a few months ago. So I'm saying to REMEMBER why you bought something in the first place... 'Cause the market will move up and down many many times in your lifetimes. You'll have to go back at times and really question why you bought what you did. :cheers:

yeah.. i hear ya.. I really shouldn't of bought it to begin with. As i didn't fully understand the whole mREIT thing, and that's why I bailed before I lost money.

i let the talking heads get to me on something i didn't understand. but at least i didn't let it get me at a point i was out money. heh.

I instead bought something i felt more comfortable with while it was on sale; MCD.

[GregWeld]

yeah.. i hear ya.. I really shouldn't of bought it to begin with. As i didn't fully understand the whole mREIT thing, and that's why I bailed before I lost money.

i let the talking heads get to me on something i didn't understand. but at least i didn't let it get me at a point i was out money. heh.

I instead bought something i felt more comfortable with while it was on sale; MCD.



Nothing wrong with that Albert! Nothing at all.


My take on the NLY's of the world.... They're better left for people like me that do this stuff on a daily basis. I don't know more than you - but I'm on top of it more - as in - 20 hours a day....


Having said that.... when I see stuff like this going down - I have to look for the reasons WHY... and then I try to look out a little longer and see what material affect I think that might have. Right now -- the market is in a spooky place.... The tax issue - europe - the economy. So what I am TRYING to do is to say -- where are we going to be 4 years from now? Will we solve the tax issue - yeah probably.... will europe still be a mess? Sadly I think it probably will be - too many democrats and socialists to fix it..... our economy? I think we're swinging back to looking at more investment here in America - less in China - more American jobs... not building toasters but energy - auto - roads - bridges. I think we'll put some of the dough that we're spending on Iraq and Afghanistan into our own infrastructure maybe. At least I hope that's where we're headed. I see interest rates holding steady (because the government that controls them - doesn't want to pay more for the USA to borrow!).

What I WON'T do -- is to take any long term illiquid positions.... i.e., unless I can STEAL an apartment building - I'm not buying.... I'm not renewing any bond buying. I'll stay sharp - stay loose - and keep my head on a swivel. I won't be afraid to invest - I'll just make sure that those investments can be liquidated in a flash if we get some big ass unforeseen melt down somewhere.

[GregWeld]

Can you guys tell I love this stuff?? :lol:

[Bucketlist2012]

Can you guys tell I love this stuff?? :lol:

If you want to be Wealthy, you have to study Wealth....You sir, are a Top student in the class...

Thanks for all the insight...It helps my self taught Brain to process and analyze info...

My Wife doesn't want to know, it scares her...I am the one keeping her from buying certain non liquid assets right now...We bought Real estate in 2009, and I told her we are staying liquid right now until we know more about the uncertainty.

[GregWeld]

I hear ya Mike!


We just bought this condo in Sun Valley --- and against my better judgement and the way I "normally" do things -- we'll take a mortgage on it. The cost of money is too cheap not to. I'm using Schwab "influence" via their loan offering and getting a pretty sweet rate.

Just a little "funny". I like funnies.... This guy calls and asks me "how much do you want to finance"? I said -- I don't know - what are my options? He says how much do you want to put down? I said - I don't know... I'll put down whatever I have to until I'm happy with the rate etc I guess... This raised another question. What happens if it doesn't appraise for the sales price? I said - well - then I guess I'll just have to throw more money at it until the numbers work.

What I ended up with is a "conventional" mortgage - I think they call it - No --- wait --- it's called "conforming". We settled on that amount and whatever money I need to bring to close the party is what I'll bring.

My take on the whole process.... super easy.... WHY? Because I have lots of cash! If I didn't - we'd have had to have a whole different discussion - and I'd be sitting on pins and needles wondering what the end result would be. Now -- I'm just telling him "you put in this much - and I'll just bring all the rest!" :rofl:

By the way -- Gwen's credit score is way higher than mine! We've been married for 33 years this month! Go figure that one out! I pay all the bills. Why should hers be higher than mine by like 50 points!?!? Both are quite high -- but I did get a good laugh out of that. Like her credit quality is any DIFFERENT than mine! Geez --- we're hooked at the hip!

[Bucketlist2012]

Haha..

My Wife's score is higher than mine too..I pay all the bills, and love to pay them early..She likes to leave them for the last minute..

But yet, she has the higher FICO, go figure..

I don't have a lot of wealth, another funny is that back in December 2008, we were looking at the Home we have now, it was an REO that sold in 2006 for 660,000 Dollars...I was buying it for 275,000 plus getting a 9000 Tax credit.:woot:

When I went to get a loan, they asked how much do you have to put down ?

I said all of it...:woot: But I want to finance 50% at these rates...You should have seen their face.:wow:

If the rates were high like in the 1990's , I would have paid cash, but now ? No way...at 4%, I can invest the rest and pay the payment with Investment profit.

[96z28ss]

I hear ya Mike!


We just bought this condo in Sun Valley --- and against my better judgement and the way I "normally" do things -- we'll take a mortgage on it. The cost of money is too cheap not to. I'm using Schwab "influence" via their loan offering and getting a pretty sweet rate.

Just a little "funny". I like funnies.... This guy calls and asks me "how much do you want to finance"? I said -- I don't know - what are my options? He says how much do you want to put down? I said - I don't know... I'll put down whatever I have to until I'm happy with the rate etc I guess... This raised another question. What happens if it doesn't appraise for the sales price? I said - well - then I guess I'll just have to throw more money at it until the numbers work.

What I ended up with is a "conventional" mortgage - I think they call it - No --- wait --- it's called "conforming". We settled on that amount and whatever money I need to bring to close the party is what I'll bring.

My take on the whole process.... super easy.... WHY? Because I have lots of cash! If I didn't - we'd have had to have a whole different discussion - and I'd be sitting on pins and needles wondering what the end result would be. Now -- I'm just telling him "you put in this much - and I'll just bring all the rest!" :rofl:

By the way -- Gwen's credit score is way higher than mine! We've been married for 33 years this month! Go figure that one out! I pay all the bills. Why should hers be higher than mine by like 50 points!?!? Both are quite high -- but I did get a good laugh out of that. Like her credit quality is any DIFFERENT than mine! Geez --- we're hooked at the hip!

Cause you wife had a job, and a steady stream of income. it adds to the score.

[GregWeld]

Cause you wife had a job, and a steady stream of income. it adds to the score.




Probably so!


Hadn't thought about that!


:thumbsup:

[GregWeld]

I found this "interesting" and spot on statement about Annaly Capital Management (NLY).... and thought I'd share it.

No one buys these mREITs because they love the mortgage business. People buy them because they like to collect high dividends. Everything being equal, declining mortgage rates equals a lower spread equals a lower dividend equals a lower stock price, and that is exactly what we saw in the case of NLY.

[chr2002ca]

But yet, she has the higher FICO, go figure...

I work for FICO and I can tell you that the reason people often can't figure out how their FICO score is calculated is because we often can't figure that out either. :lol: I won't go into detail.

Love this thread. Learning a lot. Thanks to all the contributors. :thumbsup:

[Rybar]

Looks like a good buyers market right now, some deals to be had. Alot of my portfolio is in the red since Obama was re-elected but that's ok. Sticking to them win or lose like Greg's suggested.

[GregWeld]

Looks like a good buyers market right now, some deals to be had. Alot of my portfolio is in the red since Obama was re-elected but that's ok. Sticking to them win or lose like Greg's suggested.



I wouldn't be buying YET... keep your powder dry... I'm thinking we have many more days / weeks yet to listen to the two sides go at each other with guns and knives ------ and that will roil the markets.

[GregWeld]

I work for FICO and I can tell you that the reason people often can't figure out how their FICO score is calculated is because we often can't figure that out either. :lol: I won't go into detail.

Love this thread. Learning a lot. Thanks to all the contributors. :thumbsup:




I laughed at the FICO score deal -- because I said to the guy -- DUDE! I don't need ANY credit -- so whatever it is doesn't bother me one bit! I just thought it was funny that the two would be different numbers. I also found it interesting that both of ours are LOWER because we don't have revolving debt! WTF! I have 3 credit cards --- two with 60K limit and one with 100K limit - I don't OWE ON ANY OF THEM -- and that's considered a "negative". Really? My thinking is that I should be given a friggin' gold star! And apparently I get NO credit for my net worth either.... or that I own 13 cars with ZERO payments.... again that must be considered a negative? OMG! No wonder our world is so screwed up!! :rofl:

[Bucketlist2012]

I wouldn't be buying YET... keep your powder dry... I'm thinking we have many more days / weeks yet to listen to the two sides go at each other with guns and knives ------ and that will roil the markets.

Amen....I went 10% into cash and took profits before the election...That is my powder and I will wait ...I see it getting worse before it gets better...No one knows where the bottom is, but IMO, we are not there yet..

And yes, my Wife's FICO is 25 points higher than mine :willy:

[GrabberGT]

FICO score HAH! I see it this way.. (could be right or wrong but its how I feel)

Your score does not tell how capable you are of paying a creditor but tells a creditor how well you pay your creditor. In other words... do you have history of paying interest. The more reliable you are at paying interest, the more valuable you are to them hence the higher score. So in essence we are paying a fee (interest payments) to get a higher score so that more creditors will want to offer us loans so that we can pay MORE interest. :willy:


^ not the most eloquently written response on this thread but....

[chr2002ca]

The more reliable you are at paying interest, the more valuable you are to them hence the higher score.

You nailed it Chris. It's a combination of your credit history AND your record of paying interest reliably on revolving debt. The more often you run a little balance on the credit card, the higher the score. Ass-backwards of course, but the score is tailored more for marketing than anything.

Greg, next time I see you I'll have a gold star for you. Big ass thing that'll cover the back of your shirt. :thumbsup:

[GregWeld]

I decided this morning that I'd publish the last 6 months of DIVIDENDS on the Schwab account. WHY? Because I want to remind you all about what the dividend is doing -- REGARDLESS of what the SHARE PRICE is doing. IN other words --- I'm getting REAL LIVE CASH CONSTANTLY.... the share price today is NOT important as long as these companies are sending me checks --- it's NOT important really - until I want to sell. If I don't want to sell - then the daily share price is nothing but a place marker. :D






Date Action Quantity Symbol Description Price Amount Fees & Comm
11/14/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$15,120.00
11/13/2012 3903609 GEN ELEC CAP 6.625XXXPARTIAL CALL @ 25.
type: CREDIT INT
$1,707.18
11/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00
10/30/2012 SCHWAB1 INT 09/27-10/29
type: INTEREST
$5.51
10/29/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$17,500.00
10/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$8,800.00
10/05/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$9,701.68
10/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$3,825.00
09/28/2012 GEA GEN ELEC CAP 6.625%32PINES DUE 06/28/32
type: CREDIT INT
$4,140.63
09/27/2012 SCHWAB1 INT 08/30-09/26
type: INTEREST
$7.35
09/17/2012
as of
09/15/2012 ED CONSOLIDATED EDISON INC
type: QUALIFIED DIV
$3,630.00
09/12/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$6,682.32
09/10/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$5,845.32
09/10/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,516.50
08/30/2012 INTEREST 07/30THRU 08/29
type: MARGIN INTEREST
-$29.73
08/30/2012 SCHWAB1 INT 07/30-08/29
type: INTEREST
$2.05
08/15/2012 NNN NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$4,740.00
08/14/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$4,920.00
08/14/2012 EEP ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,435.00
08/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,296.25
08/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,280.55
08/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,514.86
08/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00
07/31/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,075.00
07/30/2012 INTEREST 06/28THRU 07/29
type: MARGIN INTEREST
-$15.74
07/30/2012 SCHWAB1 INT 06/28-07/29
type: INTEREST
$1.91
07/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$19,250.00
07/12/2012 PM PHILIP MORRIS INTL INC
type: QUALIFIED DIV
$5,390.00
07/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,356.51
07/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$8,200.00
07/09/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,366.31
07/09/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,464.25
07/03/2012 KMB KIMBERLY-CLARK CORP
type: QUALIFIED DIV
$1,480.00
07/02/2012
as of
07/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$2,040.00
06/29/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,075.00
06/28/2012 GEA GEN ELEC CAP 6.625%32PINES DUE 06/28/32
type: CREDIT INT
$4,140.63
06/28/2012 SCHWAB1 INT 05/30-06/27
type: INTEREST
$1.47
06/15/2012 MCD MC DONALDS CORP
type: QUALIFIED DIV
$3,500.00
06/15/2012 ED CONSOLIDATED EDISON INC
type: QUALIFIED DIV
$3,025.00
06/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,368.39
06/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,523.85
06/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,428.70
06/01/2012 JPM+I JPMORGAN CHASE 8.625%PFDDEP SHS REPSTG 1/400 NON
type: QUALIFIED DIV
$4,042.97
05/31/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,050.00
05/30/2012 SCHWAB1 INT 04/27-05/29
type: INTEREST
$2.34
05/22/2012 KFN KKR FINANCIAL HLDGS LLC REIT
type: ORD DIV - CASH
$2,700.00
05/15/2012 NNN NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$2,695.00
05/15/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$7,200.00
05/15/2012 EEP ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,325.00

[Spiffav8]

I decided this morning that I'd publish the last 6 months of DIVIDENDS on the Schwab account. WHY? Because I want to remind you all about what the dividend is doing -- REGARDLESS of what the SHARE PRICE is doing. IN other words --- I'm getting REAL LIVE CASH CONSTANTLY.... the share price today is NOT important as long as these companies are sending me checks --- it's NOT important really - until I want to sell. If I don't want to sell - then the daily share price is nothing but a place marker. :D






Date Action Quantity Symbol Description Price Amount Fees & Comm
11/14/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$15,120.00
11/13/2012 3903609 GEN ELEC CAP 6.625XXXPARTIAL CALL @ 25.
type: CREDIT INT
$1,707.18
11/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00
10/30/2012 SCHWAB1 INT 09/27-10/29
type: INTEREST
$5.51
10/29/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$17,500.00
10/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$8,800.00
10/05/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$9,701.68
10/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$3,825.00
09/28/2012 GEA GEN ELEC CAP 6.625%32PINES DUE 06/28/32
type: CREDIT INT
$4,140.63
09/27/2012 SCHWAB1 INT 08/30-09/26
type: INTEREST
$7.35
09/17/2012
as of
09/15/2012 ED CONSOLIDATED EDISON INC
type: QUALIFIED DIV
$3,630.00
09/12/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$6,682.32
09/10/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$5,845.32
09/10/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,516.50
08/30/2012 INTEREST 07/30THRU 08/29
type: MARGIN INTEREST
-$29.73
08/30/2012 SCHWAB1 INT 07/30-08/29
type: INTEREST
$2.05
08/15/2012 NNN NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$4,740.00
08/14/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$4,920.00
08/14/2012 EEP ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,435.00
08/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,296.25
08/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,280.55
08/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,514.86
08/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00
07/31/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,075.00
07/30/2012 INTEREST 06/28THRU 07/29
type: MARGIN INTEREST
-$15.74
07/30/2012 SCHWAB1 INT 06/28-07/29
type: INTEREST
$1.91
07/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$19,250.00
07/12/2012 PM PHILIP MORRIS INTL INC
type: QUALIFIED DIV
$5,390.00
07/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,356.51
07/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$8,200.00
07/09/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,366.31
07/09/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,464.25
07/03/2012 KMB KIMBERLY-CLARK CORP
type: QUALIFIED DIV
$1,480.00
07/02/2012
as of
07/01/2012 KO COCA COLA COMPANY
type: QUALIFIED DIV
$2,040.00
06/29/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,075.00
06/28/2012 GEA GEN ELEC CAP 6.625%32PINES DUE 06/28/32
type: CREDIT INT
$4,140.63
06/28/2012 SCHWAB1 INT 05/30-06/27
type: INTEREST
$1.47
06/15/2012 MCD MC DONALDS CORP
type: QUALIFIED DIV
$3,500.00
06/15/2012 ED CONSOLIDATED EDISON INC
type: QUALIFIED DIV
$3,025.00
06/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,368.39
06/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,523.85
06/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,428.70
06/01/2012 JPM+I JPMORGAN CHASE 8.625%PFDDEP SHS REPSTG 1/400 NON
type: QUALIFIED DIV
$4,042.97
05/31/2012 BLW BLACKROCK LTD DURATION INCOME TRUST
type: ORD DIV - CASH
$1,050.00
05/30/2012 SCHWAB1 INT 04/27-05/29
type: INTEREST
$2.34
05/22/2012 KFN KKR FINANCIAL HLDGS LLC REIT
type: ORD DIV - CASH
$2,700.00
05/15/2012 NNN NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$2,695.00
05/15/2012 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$7,200.00
05/15/2012 EEP ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,325.00


I didn't break out a calculator but that looks to be in the neighborhood of 200k. Sweet return for letting your money work for 6 months.

:thumbsup: :thumbsup:

[mdprovee]

Still giving us great information Greg, thanks. I still dont understand alot of it. Apple is kicking my butt, I keep telling myself, remember long term, and dividends, so I am not panicing.

On the bright side we are saving a little, and have been able all year to pay cash for things that normally we would have to charge. Thanks.

[Bucketlist2012]

Funny how when the market is down like last year during the 400 point drops and now after the election, I get calls from investment firms asking,"How am I doing " ?

They don't call me on the up days...They want to review my portfolio....No thanks...

[GregWeld]

I didn't break out a calculator but that looks to be in the neighborhood of 200k. Sweet return for letting your money work for 6 months.

:thumbsup: :thumbsup:



I never add it up - so couldn't tell you what it is. Let's just say that I don't have any cash flow problems.... and this is just ONE account. :woot:

My point is... if you've invested your 401 or ROTH IRA.... then you shouldn't be concerned about the markets ups and downs. If you pulled out now in order to save yourself the market sell off..... you'd miss out on the dividends.... while you were in cash. Then I guarantee you that congress would announce overnight that they've settled on a fiscal cliff fix... and the market would go up 500 points and you'd miss out on that too! That's the problem.

Let's say the market goes south ala 2007.... and it just steps down and down and down daily and weekly for a year. You're down 35%. BUT -- you'd still be getting the dividends and they'd be buying shares down there at the low prices every quarter... they'd be adding to your share count FASTER than if the prices where higher! Now each one of those shares is paying a dividend - they're like rabbits - the more shares you have the more shares you buy.... 10 years from now you'd not be worrying about what happened to the friggin' fiscal cliff!! :cheers:

[toy71camaro]

Anyone care to chime in on where i should look next for my next area of investment for some good diversification?

I currently own these in my ROTH IRA. And all roughly the same value ($1k-1.5K)

I ready to make my next $1k purchase to (i think) round out my $5k ROTH for the year! (woohoo! maxed that puppy out!)

Anywho, here we go:

ABT
CVX
ED
KMB
KO
MCD
MO
T

I was thinking something in the transportation (railroads) arena, or construction, or, jump back into a high yield one (NLY?) since its nicely valued now or something of that nature to bring up my overall yeild?. lol

Or, should I just hold out and wait for something later, if this market keeps going lower?

thoughts?

(By the way, I'm gettinb 0.8% interest on this cash before I toss it into my Roth. and I can hold onto it a couple months into 2013 and still back fill my $5k 2012 ROTH allotment. If its suggested i stick with cash so I can "be ready" to jump onto something)

[GregWeld]

Anyone care to chime in on where i should look next for my next area of investment for some good diversification?

I currently own these in my ROTH IRA. And all roughly the same value ($1k-1.5K)

I ready to make my next $1k purchase to (i think) round out my $5k ROTH for the year! (woohoo! maxed that puppy out!)

Anywho, here we go:

ABT
CVX
ED
KMB
KO
MCD
MO
T

I was thinking something in the transportation (railroads) arena, or construction, or, jump back into a high yield one (NLY?) since its nicely valued now or something of that nature to bring up my overall yeild?. lol

Or, should I just hold out and wait for something later, if this market keeps going lower?

thoughts?

(By the way, I'm gettinb 0.8% interest on this cash before I toss it into my Roth. and I can hold onto it a couple months into 2013 and still back fill my $5k 2012 ROTH allotment. If its suggested i stick with cash so I can "be ready" to jump onto something)



Got any bleeders in that current group you might want to "average down" on? I'd be looking at that FIRST....

If not this instant -- you do have until April 15th to fund I think?? If that's true -- I'd wait until we see some clarity on the "fiscal cliff" negotiations.

[toy71camaro]

My big bleeder was MCD at 10%, which I averaged down to ~4% last week (after my break even sell on NLY).

Right now, Im looking at:

ABT = -8.4 (so i would cut that in half)
CVX = -4.65 (i would probably cut that down to around -3)
ED = -6.08 (that would be cut in half)
KMB = +5.87
KO = -2.25 (Id cut that in half)
MCD = -5.52 (that would be cut to about 4)
MO = +0.36
T = -1.01 (could cut that to in half)

Only worthy ones I see close would be ABT or ED. ABT is now paying a 3.2% yield on that price (and soon to split into two separate companies in Jan, so who knows what that could bring (+ outcome)/take away (- outcome)). ED is paying a 4.4% yield now, which is actually pretty good. Their recent "down fall" recently being the result of Sandy, could go down farther depending on their outcome of this whole "how they handled the hurricane situation" investigation that's being dumped on them.

Come 2013, I'll have another "buy moment" with another $1k ready for purchases too as I am about 2 months "ahead" in my ROTH investment to reach $5k/yr. Which sit in a 0.8% savings account until I'm ready to make my buy. Otherwise they sit in the ROTH IRA cash account at 0%. So i try and work the system for just a few extra bucks a month. ;)

[GregWeld]

My big bleeder was MCD at 10%, which I averaged down to ~4% last week (after my break even sell on NLY).

Right now, Im looking at:

ABT = -8.4 (so i would cut that in half)
CVX = -4.65 (i would probably cut that down to around -3)
ED = -6.08 (that would be cut in half)
KMB = +5.87
KO = -2.25 (Id cut that in half)
MCD = -5.52 (that would be cut to about 4)
MO = +0.36
T = -1.01 (could cut that to in half)

Only worthy ones I see close would be ABT or ED. ABT is now paying a 3.2% yield on that price (and soon to split into two separate companies in Jan, so who knows what that could bring (+ outcome)/take away (- outcome)). ED is paying a 4.4% yield now, which is actually pretty good. Their recent "down fall" recently being the result of Sandy, could go down farther depending on their outcome of this whole "how they handled the hurricane situation" investigation that's being dumped on them.

Come 2013, I'll have another "buy moment" with another $1k ready for purchases too as I am about 2 months "ahead" in my ROTH investment to reach $5k/yr. Which sit in a 0.8% savings account until I'm ready to make my buy. Otherwise they sit in the ROTH IRA cash account at 0%. So i try and work the system for just a few extra bucks a month. ;)



I'd put more into ED right now.... I did personally. The "I'm on sale" light is flashing due to the issues you sighted --- SANDY. That will go away in a couple quarters or maybe even next quarter. This is a steady eddy. It pays "decently" - events like this cause it be on sale. I'll take that any day. :cheers:

What you'll get is the rise back to the norm (always makes me feel good) AND the dividend.

[toy71camaro]

Yeah... good point. Thanks for asking "the question" which made me think differently about it. 4.4% is a pretty solid yield in my book ;). :thumbsup:

[GregWeld]

Today was the kind of day I talk about..... A little "kiss and a promise" about the fiscal cliff and all of a sudden stuff jumps.


That's the problem with trying to "time" the market. You'll never be in to get the nice bumps - if you'd sold out trying to protect the downside. You'll never get out at the top - and you'll never catch the bottom. Just give up and invest and ride it out. The dividends will come in -- and eventually you'll be a winner.

That's why I say to scale in and scale out. If you want out of a stock -- okay -- sell half and wait...

Same with buying in.

Now ---- if you have enough money. As in millions or hundreds of thousands invested.... THEN you can afford to take some off the table when you have outsized gains -- and sit on the side - but I'm talking about a situation where you're still going to have major skin in the game. :cheers:

[GregWeld]

Well --- Personally I'm glad all you guys are in the market now.... it makes life interesting doesn't it?


What a difference two days make! Friday nice - Monday even nicer! And that's why I say -- when you have some dough -- just put it in. You can't telegraph these kinds of days. Either UP or DOWN!


Here's what I think will happen (or could happen) -- people are hoping against hope that Congress is going to solve for the fiscal cliff... so we get these spikes. My guess is - we'll get a spike or two on the downside before it's all over. Pelosi and Boenher aren't going to just roll over. They'll get greedy at some point and we'll see a disappointed market move.

Remember! We buy on those kinds of days --- not on days like Friday and today. Even if it's 50 cents or a dollar per share... it's the SWING we want if at all possible. The difference is the dollar down to a dollar up swing is 2 bucks. But over the long haul that little bit of difference isn't going to make or break an investors portfolio! It's just that if you think you're in a wild market swing period -- then if you can catch a dip -- it makes you feel better. :D

++++++++++++++++++++++++



Now ---- I read an article over the weekend that tried to explain the big selloff we've had as --- ALL THE RICH PEOPLE ARE SELLING THEIR BIGGEST GAINERS IN ORDER TO LOCK IN THE 15% CAP GAINS RATE....

I totally agree with "some" of that. I did it myself. Why not? I had half a million in long term cap gains... might as well capture that at 15% tax rather than wait next year - maybe it goes up from there and maybe it goes down - but they've telegraphed that they want this rate UP from here...

BUT --- THERE'S ALWAYS A BIG BUTT --- All these so called rich guys are then sitting on CASH. What are they going to do with it?? Bonds don't pay squat -- CD's? Ha! What a laugh.... Real estate? Yeah maybe.... once we see the tax rates... but my guess is - the majority will go right back into stocks.

Where else are you going to make any money on your money? I'll take 5% dividend, and maybe some capital growth, and pay 20% tax -- vs -- 2% and pay nothing (muni bonds) and be guaranteed zero capital growth.


In the end -- it will return to MAKING MONEY. The tax is just a byproduct of that.

[RECOVERY ROOM]

Great info GW

[CRCRFT78]

What a nice upswing today.

[CRCRFT78]

I believe its days like this that make it worth sticking through all the down days.

[Bucketlist2012]

I believe its days like this that make it worth sticking through all the down days.

Yes sir...That is what Long term investing is all about...:woot:

Just like the 400 point swings during the year, you have to stick with it..

Long term, the dividends, and eventually the gains will be worth it.

Always keep enough cash for your everyday stuff and a rainy day fund, and let the rest ride long term...

Happy Investing to you all..Errr, I mean Happy Thanksgiving, errr...I mean both...:lateral: :cheers:

[GregWeld]

I believe its days like this that make it worth sticking through all the down days.



It isn't easy to be a real "INVESTOR".... regardless of how much skin you have in the game. But if you stick with it --- and I mean TRULY stick with it. You will be thankful.

I don't care what you're invested in - it doesn't have to be stocks. It can be real estate... it can be pigs... but you've got to know that at some point you'll have losers and at some point the pigs you bought won't be worth what you paid for them. But stick around long enough and the pigs will make baby pigs and eventually they will get sold and you'll make some money. :lol:

[XLexusTech]

It isn't easy to be a real "INVESTOR".... regardless of how much skin you have in the game. But if you stick with it --- and I mean TRULY stick with it. You will be thankful.

I don't care what you're invested in - it doesn't have to be stocks. It can be real estate... it can be pigs... but you've got to know that at some point you'll have losers and at some point the pigs you bought won't be worth what you paid for them. But stick around long enough and the pigs will make baby pigs and eventually they will get sold and you'll make some money. :lol:

FB is my pig :unibrow:

[XLexusTech]

On Income Tax and Employee granted stock options.. (restricted and Non)
When does the capital gain clock start (1 year short vs 1 year+ 1 day Long)

Does is start on Grant date?
Does it start on Vest Date?

For example.. if I get options granted year one.. vest 25% per year over 4 years... on the first 25% doe that clock start on day one of grant date or dat one of vest date?
So if I sell 2 days after 1st vest is that short or long term Cap gains?

[GregWeld]

Well --- sadly --- these are ORDINARY INCOME and you'll pay taxes at the current rate on the date you exercise. No long term ANYTHING on Options.

Remember too -- that when you exercise --- let's say 100 grand worth... that will RAISE your rate on all of your other salary. Be prepared to be hit with a whopper tax bill.

Back in the day --- We had massive Microsoft options.... we'd sell (they had 10 year expiration dates - so about 1996 you were forced to sell or let the option expire) what we had to... the next year - we'd sell to pay the taxes. While at the time you're whining about it - it's not a bad problem to have. :unibrow:

[GregWeld]

I put some cash to work first thing this morning in Annaly (NLY) and Con Ed (ED)... just nibbling and adding to my holdings. Both of these have been stepping down for awhile now - and as they do - the dividend PERCENTAGE rises. I practice what I preach and I scale in and or scale out. As an example -- I held 7,000 shares of ED -- This morning I bought 1,000 more. At 4+ percent return -- it's a decent hold and I think it's been selling off due to the big storm and the expected costs. I view this as a temporary issue. Not that this is a stock that moves all that much to begin with (which is why I own it in the first place!).


I added 10,000 shares of Annaly.... at these prices -- it counteracts the lower dividend % of shares like ED. I would repeat - this is not a stock that should be bought and forgot. It's a pure dividend play and as such - is much more volatile. These kinds of shares are where I park cash.

[Sieg]

Thanks for taking action on NLY, hopefully your Midas Touch will drive it down and I can grab another 100. :thumbsup:

[camcojb]

I put some cash to work first thing this morning in Annaly (NLY) and Con Ed (ED)... just nibbling and adding to my holdings. Both of these have been stepping down for awhile now - and as they do - the dividend PERCENTAGE rises. I practice what I preach and I scale in and or scale out. As an example -- I held 7,000 shares of ED -- This morning I bought 1,000 more. At 4+ percent return -- it's a decent hold and I think it's been selling off due to the big storm and the expected costs. I view this as a temporary issue. Not that this is a stock that moves all that much to begin with (which is why I own it in the first place!).


I added 10,000 shares of Annaly.... at these prices -- it counteracts the lower dividend % of shares like ED. I would repeat - this is not a stock that should be bought and forgot. It's a pure dividend play and as such - is much more volatile. These kinds of shares are where I park cash.
what are guys like you going to do if the dividends tax goes from 15% to 39.6%? I believe that's where it's set to go Jan 1 if Congress doesn't change anything.

[sik68]

As a coincidence to what Jody posted, here's a piece from Buffett published in the Times today regarding investment behavior under changing tax rates:
http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-tax-for-the-wealthy.html?hp&_r=1&

SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

Under those burdensome rates, moreover, both employment and the gross domestic product (a measure of the nation’s economic output) increased at a rapid clip. The middle class and the rich alike gained ground.

So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.

And, wow, do we have plenty to invest. The Forbes 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion. That’s more than five times the $300 billion total in 1992. In recent years, my gang has been leaving the middle class in the dust.

A huge tail wind from tax cuts has pushed us along. In 1992, the tax paid by the 400 highest incomes in the United States (a different universe from the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent. It’s nice to have friends in high places.

The group’s average income in 2009 was $202 million — which works out to a “wage” of $97,000 per hour, based on a 40-hour workweek. (I’m assuming they’re paid during lunch hours.) Yet more than a quarter of these ultrawealthy paid less than 15 percent of their take in combined federal income and payroll taxes. Half of this crew paid less than 20 percent. And — brace yourself — a few actually paid nothing.

This outrage points to the necessity for more than a simple revision in upper-end tax rates, though that’s the place to start. I support President Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers. However, I prefer a cutoff point somewhat above $250,000 — maybe $500,000 or so.

Additionally, we need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.

Above all, we should not postpone these changes in the name of “reforming” the tax code. True, changes are badly needed. We need to get rid of arrangements like “carried interest” that enable income from labor to be magically converted into capital gains. And it’s sickening that a Cayman Islands mail drop can be central to tax maneuvering by wealthy individuals and corporations.

But the reform of such complexities should not promote delay in our correcting simple and expensive inequities. We can’t let those who want to protect the privileged get away with insisting that we do nothing until we can do everything.

Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P. — levels that have been attained over extended periods in the past and can clearly be reached again. As the math makes clear, this won’t stem our budget deficits; in fact, it will continue them. But assuming even conservative projections about inflation and economic growth, this ratio of revenue to spending will keep America’s debt stable in relation to the country’s economic output.

In the last fiscal year, we were far away from this fiscal balance — bringing in 15.5 percent of G.D.P. in revenue and spending 22.4 percent. Correcting our course will require major concessions by both Republicans and Democrats.

All of America is waiting for Congress to offer a realistic and concrete plan for getting back to this fiscally sound path. Nothing less is acceptable.

In the meantime, maybe you’ll run into someone with a terrific investment idea, who won’t go forward with it because of the tax he would owe when it succeeds. Send him my way. Let me unburden him.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.


:cheers:

[GregWeld]

In response to Jody.... or anyone asking really....

Personally my goal has always only been one thing. To make as much money for myself as humanly possible. The tax bill is just what it is, a function of making a bunch of money.

When I was a V.P. and partner in a multimillion dollar importing company in New York City.... I paid 50% federal income tax - New York City income tax - New York State income tax - and sales taxes on top of that.... I never once thought -- OH! I shouldn't make any more money because I might have to pay taxes on it. Never.

I figure if I earn a dollar - and I owe the gov .40 of it - I still keep .60

What I do think about is.... I won't do anything right this instant that might have me making the wrong moves. In other words... I passed on an apartment building (1 mill minimum investment) because that type of investment is illiquid... and the new taxes might possible affect the returns on that kind of investment - therefore affecting the value of that investment going forward. This is called "uncertainty" and uncertainty is what NOBODY wants because it causes paralysis in the markets. Just as I'm sure it did for that particular investment. Once you know what the situation is going forward - then everyone makes their adjustments and moves forward.

[GregWeld]

COLUMN-Four reasons dividends won't fall off 'fiscal cliff'
11:58 AM ET, 11/30/2012 - Reuters
By John Wasik

CHICAGO, Nov 30 (Reuters) - With a tax increase on dividends and capital gains looming, high-dividend paying stocks may hold up well - even if investment income rates climb on Jan. 1.

Unless Congress acts by the end of the year, taxes on dividends will automatically rise from the current 15 percent to as high as 39.6 percent. While that sounds like a draconian increase, it should not discourage investors from owning high-dividend paying stocks nor should it trigger a lasting market decline.

You can blame inertia, but individual investors are likely to stick with their dividend stocks anyway. And those who do may even be rewarded for the fear factor of higher rates. Companies like Wal-Mart have moved up dividend payments to December. Others like Costco, Wynn Resorts and Tyson Foods are declaring special dividends, some of them quite substantial.

If history provides any clue, the market should get over its anxiety quickly and move on. According to a study by Ned Davis Research, dividend stocks performed well during past periods of higher dividend taxes. The firm studied years when rates ranged from 28 percent (1988-1990) to 70 percent (1972-1978).

In every period studied, except for 1987, high-dividend stocks outperformed non-dividend payers. The margin of outperformance was as high as nearly 15 percentage points.

What's the connection between tax rates and dividend-paying stock returns? According to Milller/Howard Investments in a recent report: "There is no correlation between lower dividend taxes and the performance of dividend-paying stocks."

There are some fundamental financial and psychological reasons why dividend payments and tax rates are unlinked. Here are the four most compelling ones:

1. Investors still know how to play the ongoing contest between bonds, insured vehicles and dividend-paying stocks. Savvy investors buy on the spread, or the difference between asset classes. Right now, that gap is big.

The national average rate on a one-year certificate of deposit, according to Bankrate.com, is a miserable 0.29 percent, although you can find a CD yielding 1 percent if you shop around.

You can get a 2 percent yield on the Vanguard Dividend Appreciation ETF right now. The exchange-traded fund holds a basket of stocks that consistently boost their dividends. This spread is unlikely to narrow soon since the Federal Reserve has said it will leave interest rates close to zero into 2014 if the economy continues to be sluggish.

I know I'm comparing apples and oranges - an insured investment with stocks - but long-term, total-return investors are willing to take on the extra risk.

2. The best dividend-paying stocks combine income with potential growth in the payout over time. Conventional bonds and insured deposits pay a fixed rate until maturity. While there may be some compounding, your income stream won't change during the time you hold your bond to maturity.

Dividend payers can increase their payouts every quarter - and many have done so consistently over time. Energy company Chevron, for example, has been paying dividends since 1912; Colgate-Palmolive since 1895, and Stanley Black & Decker since 1877, according to Investorplace.com's list of "dependable dividends."

Investors will continue to embrace consistency paired with dividend growth even if tax rates climb.

3. Dividends still provide a modest cushion in calamity. While dividend-payers still are subject to stock market risk, they are much better to own in a pinch in a low-yield, slow-growth environment.

If you examine the most elite companies that have raised dividends for at least 20 years - the S&P High Yield Dividend Aristocrats - those companies have outpaced the broad S&P 500 index over the past one, three and five years through 2011.

Even when you include the disastrous results from 2008, the Aristocrats turned in a 1.53 percent return for the half decade versus a negative 0.25 percent for the stocks of the S&P 500. Keep in mind that one-third of total stock returns have come from dividends since 1926, so in the absence of appreciation, dividends provide some insulation in bear markets

4. Total return still matters. Yield isn't the only reason dividend payers will prevail in the event of a tax increase. Companies also offer the potential for capital appreciation in growing economies.

The most consistent payouts come from sectors of the economy that straddle defensive and growth categories. Utilities, for example, many of which have been around for a century, have traditionally paid out large portions of their cash to shareholders. Combined with an increasing demand for electricity and energy, they've done well in recent years.

The Utilities Select Sector SPDR, for example, has returned nearly 14 percent over three years through Oct. 30, with a recent yield of about 4 percent.

The Vanguard Consumer Staples ETF, which tracks an index that holds "consumer defensive" companies like Altria and Coca-Cola, is up nearly 15 percent with a 2 percent yield.

The market will get nervier the closer Congress gets to the end of the year - dividend payers will likely provide the modest bulwark they always have for buy-and-hold investors. There are no guarantees, but the lion's share of dividends won't suddenly disappear just because tax rates change.

[Vegas69]

Let's talk some small potatoes real estate.

We closed on this property about 3 weeks ago and the tenant moved in today. It's located in South Las Vegas in a good neighborhood. I got lucky and found a retired school supertindent from Phoenix with no pets. He races go karts on the road course.

Purchase Price: $109,500
Down Payment: $21,900
Loan Amount: $87,600 (3.75% Fixed/30 Years)
Closing Costs:$6,400
Fix Up: $8,000
-3,285 Commission

Initial Investment: $33,015

Rent: $1075 Per Month (Under value due to quality tenant)
Mortgage Payment (PITI) $547
Gross Monthly Cash Flow: $528

First 5 Year ROI
Gross Cash Flow: $31,680
Principal Reduction:$8,640
Appeciation (3% Yearly): $16,425
Cash Flow Invested 1% Money Market: $3,168
Realized Gross Gain: $59,913

15 Year ROI
Gross Cash Flow: $95,040
Principal Reduction: $31,320
Appreciation (3% Yearly): $49,275
Cash Flow Invested in 1% Money Market: $9,504
Realized Gross Gain: $185,139

I realize these are gross numbers and don't include repair, vacancy, or taxes. They are attractive numbers regardless.

My plan is to have this property paid in full between my 52nd-55th birthday cash flowing $1000-$1300 a month with a value of approximately $160,000. IF, I don't decide it's time to 1031 the money to a different market due to market forces or relocation.

The property turned out really sharp and way beyond average for our rental market. That required a larger initial investment but I feel it will cost me less vacany and less fix up over the years. I know that the best properties attract the best tenants. I also realize that the rental market will take a turn for the worse in the foreseable future. I want the cream of the crop.

Ironically, after I closed the deal with the tenant today, my 2nd property recieved short sale approval this morning. We plan to close by the end of the year. :thumbsup:

http://i200.photobucket.com/albums/aa251/Payback1969/DSC_0001.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/DSC_0004-1.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/DSC_0006.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/DSC_0007.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/DSC_0009.jpg

[Flash68]

Nice work for small potatoes. :unibrow:

No before and after? What did you do for the $8k rehab?

[frankv11]

X2 on the small potatoes. A few more of those will make for a good 55th bday.
Todd
How is the market on trustee sales in Vegas? Is there any wiggle room there or is every one doing it?

[WSSix]

And that's why I wouldn't mind getting into the rentals market at some point in my life. You're having someone else pay for your house. Good job, Todd. :thumbsup:

[Vegas69]

Nice work for small potatoes. :unibrow:

No before and after? What did you do for the $8k rehab?

Come to think of it, I accidentally erased the before photos. It was just all original 1998. It was a little tired.

Repairs:
Tiled the entire structure with 17" neutral tile/dark grout (Never mess with it again) $5,100
Painted the entire inside with a modern neutral washable $1000
Installed master shower enclosure to ward off water damage $187
Tore out tree that was compromising wall, fixed leak, and trimmed up landscaping $325
Replaced the kitchen appliances (Stove, Micro, Dishwasher)$1,200
Toilet Seats $30
Replaced some landscape lights $45
Painted exterior trim $300
Professional cleaning $200

I have around 15 hours in it myself.

X2 on the small potatoes. A few more of those will make for a good 55th bday.
Todd
How is the market on trustee sales in Vegas? Is there any wiggle room there or is every one doing it?

The plan is 5 minimum within 3 years. Our notice of defaults have been picking up but our trustee sales are still week due to a dry spell, short sales, and loan mods. We have approx. 70,000 vacant properties in the valley and who knows how many are not makign their payments due to a senate bill that makes it difficult to foreclose. We are expecting another waive of bank foreclosures starting next spring as the banks are figuring things out and performing some judicial foreclosures. That will also pick up the short sale inventory as we have under 1,000 active short sales with 60% of our home owners in a negative equity position. Nevada is a non judicial state.

Guys are flipping properties for good profits as our inventory has been low for 6 months. Currently we have 4,700 active units in the ENTIRE valley and we are closing around 3,000 a month. Buyers are paying over market value in many cases due to the lack of quality inventory. This has led to an 18% price increase year to date. I really think the market has been undervalued due to the collapse of the market. Many feel we have a double dip coming and I can't disagree, I just don't think it will be substantial enough to not buy now at 3.75% interest. :unibrow:

[CarlC]

Todd, I too have become a landlord by renting my Dad's old home. It required a LOT more work and cash than yours but the financials were hard to ignore.

During remodeling several people per day come to the house wanting to buy or rent, and there was no sign, advertisement, etc. An on-line rental availability map showed that there were only two similar rental rental properties in a 1.5 mile radius, and outside of that the neighborhood gets really ugly. Hence, premium rental income and a selective tenant process is much easier to get.

If all goes well in 26 months all of the cash outlay will be paid off. Like cars my labor is "free", but for me it's the price of admission and sweat equity since nothing had been done in the house since it was new in 1953. If I had to pay someone to do it all it would have been hard to justify.

My friend and I are now looking at purchasing a commercial building as a combined rental and storage (for us) facility. We both want a place to go after we retire to keep ourselves busy, and our current home properties won't allow expansion. By leveraging the home rental there should be little out-of-pocket expense but a good long-term ROI if the commercial tenant rent can cover the bulk of the loan.

There are advantages and disadvantages in property rentals. Both revolve around the tenant. Get a good one and it's a good deal. Get a bad one and it's a real PITA, especially in California where the tenant has significantly more rights than the landlord. Texas is much more landlord-friendly. To lure in the tenants that I wanted a few more things were added to the property than planned, but they are upgrades that over time will pay for themselves. So far the tenants have been good.

If one can afford to purchase and fix a property for rental it's a great time to do it if the income can cover costs. I don't see home prices going a whole lot lower in most markets, people are always going to need rentals, and as home values rise from the ashes, the appreciation is a great nest egg. Just like stocks though, it has to be the right property, in the right area, with the right tenants, etc., so due diligence is needed to make sure it's not a money looser.

[GregWeld]

Thanks for sharing Todd.... And Carl!!

Real estate should be a part of everyones plans if they can swing it -- or have the stomach for property management. It's certainly a smart strategy for a real estate professional like Todd.

I don't want the potential hassles of the actual management - so choose to invest in LLC's with professional management. There are also real estate ETF's (exchange traded funds i.e., stocks) where an individual can invest - collect a dividend - and have the possible upside appreciation. Just google Real Estate ETF's and you should get all manor of hits for this type of investment.

The property I carry the mortgage on in Oregon --- has yet to find a tenant -- and this month marks the one year anniversary... EMPTY. So it's not all roses and perfection. When my brother in law bought the property -- I asked him point blank - "can you afford the mortgage with NO TENANT" for a year or more?" The answer was "EASY". While it's not my problem - I just collect the payments - I'd prefer to see the investment for Jay go the way it was "planned". Eventually he will get a tenant and things will be fine. Commercial buildings/tenants are a LOT different than "renters" in a house. He's had offers -- but the tenant improvements are baked in the offer and a couple have been over 100K before the tenant will move in. He's not interested in putting out that kind of cash up front but has taken a serious look at the proposals.

I tried for over a year - to buy a commercial building that I could lease out a portion -- and keep 2500 square feet for my own use. The numbers just don't work and the vacancy rates for light industrial are quite high and the prices have NOT come down in order to make them work. Any investment like this must have full consideration of the NEGATIVE CASH FLOW that can be a part of these purchases. They're not like stocks -- if things don't go the way you planned - they can be "white elephants" and you must be able to carry the costs out of pocket. If you're smart - and a little bit lucky - you can get a rental with a great tenant that stays for years... and if you're really lucky the value can double or triple -- all while paying a nice tax benefit (if the idiots in Washington DC don't ruin that).:cheers:

[Vegas69]

Todd, I too have become a landlord by renting my Dad's old home. It required a LOT more work and cash than yours but the financials were hard to ignore.

During remodeling several people per day come to the house wanting to buy or rent, and there was no sign, advertisement, etc. An on-line rental availability map showed that there were only two similar rental rental properties in a 1.5 mile radius, and outside of that the neighborhood gets really ugly. Hence, premium rental income and a selective tenant process is much easier to get.

If all goes well in 26 months all of the cash outlay will be paid off. Like cars my labor is "free", but for me it's the price of admission and sweat equity since nothing had been done in the house since it was new in 1953. If I had to pay someone to do it all it would have been hard to justify.

My friend and I are now looking at purchasing a commercial building as a combined rental and storage (for us) facility. We both want a place to go after we retire to keep ourselves busy, and our current home properties won't allow expansion. By leveraging the home rental there should be little out-of-pocket expense but a good long-term ROI if the commercial tenant rent can cover the bulk of the loan.

There are advantages and disadvantages in property rentals. Both revolve around the tenant. Get a good one and it's a good deal. Get a bad one and it's a real PITA, especially in California where the tenant has significantly more rights than the landlord. Texas is much more landlord-friendly. To lure in the tenants that I wanted a few more things were added to the property than planned, but they are upgrades that over time will pay for themselves. So far the tenants have been good.

If one can afford to purchase and fix a property for rental it's a great time to do it if the income can cover costs. I don't see home prices going a whole lot lower in most markets, people are always going to need rentals, and as home values rise from the ashes, the appreciation is a great nest egg. Just like stocks though, it has to be the right property, in the right area, with the right tenants, etc., so due diligence is needed to make sure it's not a money looser.

You bring up some great points. I've heard the CA nightmares from clients over the years. Luckily, Nevada is a landlord state. You can have them out within 30 days of missing a payment. I always say that you pick your tenant when you buy a property. What looks good on paper doesn't always reflect in the real world. I didn't get this one on the market either. The neighbors Dad came over and said, I want it before I was half done fixing it up.

Thanks for sharing Todd.... And Carl!!

Real estate should be a part of everyones plans if they can swing it -- or have the stomach for property management. It's certainly a smart strategy for a real estate professional like Todd.

I don't want the potential hassles of the actual management - so choose to invest in LLC's with professional management. There are also real estate ETF's (exchange traded funds i.e., stocks) where an individual can invest - collect a dividend - and have the possible upside appreciation. Just google Real Estate ETF's and you should get all manor of hits for this type of investment.

The property I carry the mortgage on in Oregon --- has yet to find a tenant -- and this month marks the one year anniversary... EMPTY. So it's not all roses and perfection. When my brother in law bought the property -- I asked him point blank - "can you afford the mortgage with NO TENANT" for a year or more?" The answer was "EASY". While it's not my problem - I just collect the payments - I'd prefer to see the investment for Jay go the way it was "planned". Eventually he will get a tenant and things will be fine. Commercial buildings/tenants are a LOT different than "renters" in a house. He's had offers -- but the tenant improvements are baked in the offer and a couple have been over 100K before the tenant will move in. He's not interested in putting out that kind of cash up front but has taken a serious look at the proposals.

I tried for over a year - to buy a commercial building that I could lease out a portion -- and keep 2500 square feet for my own use. The numbers just don't work and the vacancy rates for light industrial are quite high and the prices have NOT come down in order to make them work. Any investment like this must have full consideration of the NEGATIVE CASH FLOW that can be a part of these purchases. They're not like stocks -- if things don't go the way you planned - they can be "white elephants" and you must be able to carry the costs out of pocket. If you're smart - and a little bit lucky - you can get a rental with a great tenant that stays for years... and if you're really lucky the value can double or triple -- all while paying a nice tax benefit (if the idiots in Washington DC don't ruin that).:cheers:

Our commercial market is super saturated with tenants being lured from old properties into new. I don't know much about it but I'm sure there is money to be made, there always is somewhere.

I like your idea on the ETF and I know you have brought it up to me in the past. At this point I'm going to be the grunt but I'll certainly keep it in mind for the day I can take advantage with more liquidity.

County 1 $109,500 10/31/12
County 2 $248,000 07/11/07
County 3 $119,950 02/01/99

I purchased the above property for less than it sold for new in 1999. Interest rates are really the lowest they have ever been. The taxes are $1155 a year. Windows of opportunity are only open so long. This is likely a once in a lifetime opportunity for me. I fully intend to take advantage of it.

[frankv11]

california is definitely a tenant's state. I bought a triplex at trustee sales recently. 2 units were occupied and 3rd one was vacant (was told by neighbor) by the time I got trustees deed and recorded. some one had moved in and demanded cash for keys and so did the others ( rediculous amount otherwise I would have payed out). in california tenants get a 90 day notice before you can even begin eviction process. I will not buy rent controlled real estate , that is another ball game
so any how , got an eviction lawyer working on it.
3 units 1B - 1B each, 2000sqft , 10,000sqft lot
plan A
Rehab them completely. refi and hopefully get all my investment back while generating about $1000.00 a month.

plan B same as above but add another unit. zoning and lot size allows it. need to work out numbers w architecture and $$$ / sqft etc....

I got a pretty decent deal so I think there is enough room to get all of my initial investment and I'll do 90% of the work my self.
It is really hard to get to get a deal at auction like todd said. people are paying market value and above at times. A lot of Hedge fund money out there, I hear.
If you know the game and stay persistent it pays off. hoping to get out there again soon. just not to sure where market is going and don't want to get caught at the peak of the " W "

[GregWeld]

Windows of opportunity are only open so long. This is likely a once in a lifetime opportunity for me. I fully intend to take advantage of it.



ABSOFRIGGINLUTELY!


BUY 'EM AS FAST AND AS OFTEN AS YOU CAN! This is possibly the one and only time in your life for prices AND rates to be this low!


:cheers: :thumbsup:

[CarlC]

I hear you on the industrial property prices Greg. They have not come down in Los Angeles Co. like home prices have. The one we had our eye in is in the same complex that my friend already owns one in (it's an industrial "condo" building), but a 2100ft^2 building goes for well into the $200k's + taxes + association dues. Ouch.

Todd got lucky on his tenant. I would have done exactly the same if that offer came but I had to take a different approach. The current tenants are a nice young couple with a three-year old son. Both have full time jobs and a good income. They paid cash for the move-in but have insufficient funds for a down payment for a home. With escalating home prices combined with how difficult it is to get a loan, if they can't qualify now, they likely won't any time soon. So, give them a few more property "upgrades" that they like (he even came over to help with one of them) to entice them in and hope that they will be long-term.

So, am I working on the Camaro today as it sits in a million pieces in the garage? No, I'm dumping data into Quickbooks for all of the remodeling costs, rent income, tax and insurance payments, etc. There's no free lunch.

I'm also a cheap SOB sometimes. I've never liked paying for things that I can do myself, and taxes was one of them. No more. My tax accountant is worth every penny. I go in two times during the calendar year, in addition to the normal tax season sessions, to do a "check up." Yeah, it does cost, but I'm certain that the money paid is more than offset by both the monies the accountant finds/saves me and the reduced stress of dealing with it. In other words, find a good tax accountant and save yourself money and the hassle factor.

[Bucketlist2012]

ABSOFRIGGINLUTELY!


BUY 'EM AS FAST AND AS OFTEN AS YOU CAN! This is possibly the one and only time in your life for prices AND rates to be this low!


:cheers: :thumbsup:

Boy, I may be moving to my forever Home in the next few years....Things are just too good right now with prices and rates..

I had planned to wait seven to ten years or so when I bought in February 2009...I am not ready but I may need to start getting ready.. Bernanke said he would keep rates low into 2015, but I think I may have to jump sometime late in 2013...Or at least sometime in 2014...

[GregWeld]

I have said in past posts that the key to REALLY making money is the ability to look around your own area of expertise... or knowledge... and see where there are POTENTIALS for investment. One of our members is in the oil biz - obviously he is keenly aware of what's going on there... Todd just posted about his real estate investing - and he is obviously an expert in his own industry.

Personally -- since I haven't worked for 20+ years :woot: I'm no expert in anything except how to manage the money we've already made... I'm also keenly into the high tech world, with friends etc in or invested in many of the start-ups that are central here in the Seattle area.

Having said that.... I was reading the paper today and spotted (and read) this article on something I know absolutely nothing about (I've been a proud member of AA for 28 years now). But I wanted to post it as an example of THINKING about investing -- and how you must look deeper and think larger picture around investing. Let me sum it up simply - APPLE sells lots of stuff... but in order to sell lots of stuff - they have to buy lots of parts to build their stuff ---- so if you can figure out what they're buying - there may be an investment in a supply line etc. THAT IS WHY I'M POSTING THIS ARTICLE.... because it reminded me of this kind of thinking.

Here's my bottom line --- personally I'm not interested in investing in any particular facet of this business -- but you can bet that I'm going to look in to the financial backers (VC's - angel investor groups etc) and I will look to put some money to work with one or two of them. When I say put some money to work -- I'm talking about 100 grand or so.... TINY for me.... but if a guy can get in on the bottom floor -- 100 can get you a 10 bagger... and then that's real money, I don't care who you are! :unibrow:

For investing 102 -- some of you might have enough that you want to speculate just a bit -- and maybe look into the grow light industry -- or hydroponics suppliers -- or??

http://seattletimes.com/html/localnews/2019809614_marijuanainvestor02m.html

[CarlC]

Can individual foreign stocks be purchased through an on-line brokerage service, i.e. Ameritrade, etc? Specifically I'm looking at perhaps purchasing a Japanese stock but I'm having a heck of a time finding a definitive answer. I have not signed up for an on-line broker service so if they are available through the standard channels I apologize for not digging deeper.

[GregWeld]

Carl,


It "depends".....


Give me a name or email me a name or PM me whatever...


There are a few Japan "ETF's"... and then there are also what are known as ADR's (American Depository Receipts). But without a name nobody could do any research for ya.

[GregWeld]

california is definitely a tenant's state. I bought a triplex at trustee sales recently. 2 units were occupied and 3rd one was vacant (was told by neighbor) by the time I got trustees deed and recorded. some one had moved in and demanded cash for keys and so did the others ( rediculous amount otherwise I would have payed out). in california tenants get a 90 day notice before you can even begin eviction process. I will not buy rent controlled real estate , that is another ball game
so any how , got an eviction lawyer working on it.
3 units 1B - 1B each, 2000sqft , 10,000sqft lot
plan A
Rehab them completely. refi and hopefully get all my investment back while generating about $1000.00 a month.

plan B same as above but add another unit. zoning and lot size allows it. need to work out numbers w architecture and $$$ / sqft etc....

I got a pretty decent deal so I think there is enough room to get all of my initial investment and I'll do 90% of the work my self.
It is really hard to get to get a deal at auction like todd said. people are paying market value and above at times. A lot of Hedge fund money out there, I hear.
If you know the game and stay persistent it pays off. hoping to get out there again soon. just not to sure where market is going and don't want to get caught at the peak of the " W "



It's these kinds of tales that keep me out of the individual unit investments.... I invest in large apartment LLC's that are professionally managed -- get really nice returns (7 and 8% annual cash interest) ... upside cap, if any when they're sold... income tax depreciation.... and no phone calls about someone's toilet plugged up!:D
:cheers:

[Vince@Meanstreets]

It's these kinds of tales that keep me out of the individual unit investments.... I invest in large apartment LLC's that are professionally managed -- get really nice returns (7 and 8% annual cash interest) ... upside cap, if any when they're sold... income tax depreciation.... and no phone calls about someone's toilet plugged up!:D
:cheers:

That's where investing into an organized property maintenance company would come into play. :D

With proposition 19 in play back in 2010 your other reference would have been a great move but you would have to keep it low key. I was planning a nice 10,000 sq ft green house where we would cultivate "artichokes" and sell to whole sale sellers. Since 19 failed I will not risk the move. I love my guns too much on that risk. I haven't been a user since the 80's but I think it could have been a good cash crop.

Since we are on a commercial flow, what would you do with 12 acers of high desert just out side of Lancaster? 5 miles from hwy 395 and hwy 15?

Mini-mall? Retail coops? Self Storage complex?

[GregWeld]

Since we are on a commercial flow, what would you do with 12 acers of high desert just out side of Lancaster? 5 miles from hwy 395 and hwy 15?


You don't even want to hear what I think about investing in Landcaster, or that area, let alone investing in ANYTHING that's in California...

I love California - but not as an investor. Way too many tree huggers and laws there. The criminals have "rights" - the renter that doesn't pay has "rights" - the border hoppers have "rights". No thanks!

Dump the property and buy some good stocks.... :woot:

[Bucketlist2012]

You don't even want to hear what I think about investing in Landcaster, or that area, let alone investing in ANYTHING that's in California...

I love California - but not as an investor. Way too many tree huggers and laws there. The criminals have "rights" - the renter that doesn't pay has "rights" - the border hoppers have "rights". No thanks!

Dump the property and buy some good stocks.... :woot:

Haha....No doubt...That is why I will one property...The one I live in..I may move in the next few years to my forever home, but I will not keep this one..
Mainly for the reasons you mentioned..

I don't need a squatter laughing at me while he doesn't pay for several months...My health cannot take the stress and I won't do the jailtime for what I would do...

I would still stay in California due to family, but I don't have the stomach for the laws and rights given to squatters...

[glassman]

Some of my clients that are high end boutique resalers have said there are two California's for investing, coastal and "other". They've all said stay away from " other". There are exceptions to that of course, but when were in the game of numbers...

[frankv11]

When I buy such property. I have already taken into account eviction , holding time , repairs etc... All that has to be factored in. As long as the numbers make sense and oppurntunity strikes and if I have the means I'll be all in.

For example on above mention property. If there is no drastic change in market. I should get all of my investment back in six months. it will pay for it self while generating a profit and if there is a bit of room maybe ill pay my self a bit on the front end. With today's interest it would be a sin not to keep it. If I could keep one or two of those a year. Maybe I'll be able to get a professional management firm when I'm 45:D
Plan C , which is not really in my plans would be to sell and profit an avarage of $70k before taxes.
Now that is just my point of view we are all at a different stage,money wise career, family goals etc... So most definitely not for everyone but do what you know works for you. :thumbsup:

[GregWeld]

Good post Frank... and the part I like the best is that you understand that everyone has differences. So ideas are just that... ideas -- and they can be
modified... used in part or in whole etc.

Doing what someone understands and has intimate knowledge of - to me - is the best way to invest. They see and understand the pitfalls. They have a better sense of changes - good or bad etc.

The main part of this entire thread is just to get going and do SOMETHING - save - invest - start early. Make your own "luck".

:cheers:

[Vegas69]

I like your statment about making your own luck.

I was speaking to a physician client of mine yesterday and he was talking about how lucky he is to have his position. Then he started talking about all the training, meetings, interviews, and decisions he made over the years.

I went on to tell him luck likely had some play but a majority of his luck was self made. You don't get lucky being a couch potato.

If you want things to change, YOU must change. Whether it's you skill set, education, health, relationships, finances, whatever....

[GregWeld]

Mini-mall? Retail coops? Self Storage complex?



My brother in law builds and invests in Mini Storages. He has people that have been doing just that - for 25 or 30 years now. They have a very specific set of demographics/cost per square foot/size of property etc that absolutely must be adhered to. Any time they've ignored them - the property hasn't worked out.

Having said that...

These things are the most amazing cash cows I've ever seen. Most of the time Eric tells me that they're all rented out before they ever get an occupancy permit finished. The ones they build have on site live in management. For most of the units there is very little effort on managements part... the few that fail to pay get locked up and the contents sold to people that do that kind of work. He told me once that the biggest job is keeping the electronic gates working 24/7.

[Bucketlist2012]

LUCK..

If you read my signature, you understand what I think of luck..
It is the meeting of preparation and opportunity..

It takes both to make it work..

[slow4dr]

I have been lurking in this thread for a while but I figure now is as good of time as any to join in and contribute anything I can (which is minimal).

What I've done may be considered crazy to some but when you have minimal cash flow you really have to think outside the box. The old saying of be aggressive when others are scared and be scared when others are aggressive has worked for me. I had some great help from not only my boss who also has rentals but a great family friend who at his peak had over 20 SFR's being rented.

BTW: I fit the "other" classification that 'glassman' mentioned above since I am 70 miles East of L.A.

Just a little back story:

*Bought my first house in 2001 with a 80/10/10 loan (primary residence)

*Refi'd house #1 in 2002 to a 15 year loan compiling all 3 loans (rates had dropped far enough that my payment stayed the same)

*Refi'd house #1 again in the Summer of 2010 (this is where many would call me crazy but I went back to a 30 year loan to keep cash flow more positive).

*We bought a bigger primary residence (house #2) with only the minimum required for an FHA loan in December 2010. Using an FHA loan allowed me to keep more cash in hand. IMO too many people are hung up on saving just enough to have 20% down and then they don't have any cash left over for back up. I'd rather not tie up that cash (since I didn't have a lot of it). This was my first swing at a rental property so I was preparing myself for the worst. I wasn't in a position to wait while I saved more any longer because my local market had already started climbing back up by this time.

*I was able to rent house #1 within a few days of listing it. It is a house I am familiar with since I lived in it for 10+ years so I know it inside & out. It is a great SFR with RV storage, 800 sq ft air conditioned shop, big easy to maintain yard. Which made it easy to pretty much have the pick of the litter when it came to applicants.

*The rent payment for house #1 was making the P&I payments on both #1 & #2 houses plus a little extra.

*The newest little bonus came about a month ago. I was able to refi house #2 at a point and a half lower rate AND the house had appreciated enough to get rid of PMI. This dropped the total payment including PMI roughly 20%.

*I've had a few little hiccups at house #1 over the last 2 years. Clogged kitchen sink (plumber called), water heater was leaking from the valve (just needed to be tightened down LOL), I had to replace a garage door spring and I had a leaking stand up shower that I ended up upgrading to a tub (full bath now instead of a 3/4) anyway but overall nothing too crazy. Should the proverbial poop hit the fan I still have the money I didn't spend on the down payment as a cushion.

*I would love to pull the trigger on house #3 as an upgrade for my family and then rent #2 but there just isn't enough inventory right now in my area. For instance there have been less than 10 listings matching my search criteria in the last 90 days. My current residence is very similar to the original only bigger, RV storage, shop, and of course a big easy to maintain yard so renting it should also be no problem either.


*********************************************

Up until this thread I never thought I would ever invest in the stock market. I would like to thank all involved and especially Greg for the ever-so influential way of putting things into perspective. I not only have been researching stocks the last few months but have also gotten my rather stubborn on the subject wife to come on board as well. She would have laid over dead before investing in the stock market but she has read through most of this thread and is now asking me how much a week we should be investing. :cheers:

I am starting to familiarize myself with the Yahoo & Google finance pages to find my comfort zone and follow basic trends. However, there is one small thing I've noticed that is different between these two sites and that is the Dividend. The Yield is always the same but the Dividend amount is always substantially higher on Yahoo's page. I am sure it is just some small difference in the way it is written but for this reason I have leaned towards Google instead (mainly because Greg has posted specific amounts and they have matched Google exactly). If anyone can explain the difference so I can understand it would be much appreciated.

-J

[JKnight]

J - Yahoo quotes dividends as an annual amount, whereas Google shows what you are "expected" to get on a quarterly basis.

[slow4dr]

J - Yahoo quotes dividends as an annual amount, whereas Google shows what you are "expected" to get on a quarterly basis.

:thumbsup: I figured it was something simple, thanks.

[GregWeld]

I have been lurking in this thread for a while but I figure now is as good of time as any to join in and contribute anything I can (which is minimal).

What I've done may be considered crazy to some but when you have minimal cash flow you really have to think outside the box. The old saying of be aggressive when others are scared and be scared when others are aggressive has worked for me. I had some great help from not only my boss who also has rentals but a great family friend who at his peak had over 20 SFR's being rented.

BTW: I fit the "other" classification that 'glassman' mentioned above since I am 70 miles East of L.A.

Just a little back story:

*Bought my first house in 2001 with a 80/10/10 loan (primary residence)

*Refi'd house #1 in 2002 to a 15 year loan compiling all 3 loans (rates had dropped far enough that my payment stayed the same)

*Refi'd house #1 again in the Summer of 2010 (this is where many would call me crazy but I went back to a 30 year loan to keep cash flow more positive).

*We bought a bigger primary residence (house #2) with only the minimum required for an FHA loan in December 2010. Using an FHA loan allowed me to keep more cash in hand. IMO too many people are hung up on saving just enough to have 20% down and then they don't have any cash left over for back up. I'd rather not tie up that cash (since I didn't have a lot of it). This was my first swing at a rental property so I was preparing myself for the worst. I wasn't in a position to wait while I saved more any longer because my local market had already started climbing back up by this time.

*I was able to rent house #1 within a few days of listing it. It is a house I am familiar with since I lived in it for 10+ years so I know it inside & out. It is a great SFR with RV storage, 800 sq ft air conditioned shop, big easy to maintain yard. Which made it easy to pretty much have the pick of the litter when it came to applicants.

*The rent payment for house #1 was making the P&I payments on both #1 & #2 houses plus a little extra.

*The newest little bonus came about a month ago. I was able to refi house #2 at a point and a half lower rate AND the house had appreciated enough to get rid of PMI. This dropped the total payment including PMI roughly 20%.

*I've had a few little hiccups at house #1 over the last 2 years. Clogged kitchen sink (plumber called), water heater was leaking from the valve (just needed to be tightened down LOL), I had to replace a garage door spring and I had a leaking stand up shower that I ended up upgrading to a tub (full bath now instead of a 3/4) anyway but overall nothing too crazy. Should the proverbial poop hit the fan I still have the money I didn't spend on the down payment as a cushion.

*I would love to pull the trigger on house #3 as an upgrade for my family and then rent #2 but there just isn't enough inventory right now in my area. For instance there have been less than 10 listings matching my search criteria in the last 90 days. My current residence is very similar to the original only bigger, RV storage, shop, and of course a big easy to maintain yard so renting it should also be no problem either.


*********************************************

Up until this thread I never thought I would ever invest in the stock market. I would like to thank all involved and especially Greg for the ever-so influential way of putting things into perspective. I not only have been researching stocks the last few months but have also gotten my rather stubborn on the subject wife to come on board as well. She would have laid over dead before investing in the stock market but she has read through most of this thread and is now asking me how much a week we should be investing. :cheers:

I am starting to familiarize myself with the Yahoo & Google finance pages to find my comfort zone and follow basic trends. However, there is one small thing I've noticed that is different between these two sites and that is the Dividend. The Yield is always the same but the Dividend amount is always substantially higher on Yahoo's page. I am sure it is just some small difference in the way it is written but for this reason I have leaned towards Google instead (mainly because Greg has posted specific amounts and they have matched Google exactly). If anyone can explain the difference so I can understand it would be much appreciated.

-J



HUGE KUDOS TO YOU MY FRIEND!


Here's my one though I will add to your investing... Diversify. Don't just do all single family rentals. Stocks will add income - usually over time they grow - but more importantly for YOU - they will be LIQUID. So - I'd build a portfolio of dividend paying stocks.... to add to your housing empire. Seldom do all facets of investing work in conjunction with each other. Housing can go up - stocks might be down - interest rates WILL go up from here which will cause your housing to take a "hit" if they rise too quickly or too far... So you want BALANCE in investing. What happened to MANY MANY people is that all their liquidity dried up when they needed it most... that's a very very bad thing!

If your two houses go up enough -- you might try parlaying them into a fourplex or something similar but don't keep borrowing on them. The key here is to build a retirement cash flow - and that happens when your renters pay off the balance and YOU become the bank!

I have a friend that lives in a 12 million dollar house -- he started out doing EXACTLY what you've done. He parlayed that into 1000's of apartments. It didn't happen over night -- and his apartments are the type I invest in -- LLC's with investors -- his company puts the deals together - and they manage them. Sweet deal. :woot: :cheers:

[Vince@Meanstreets]

Yeah, The property has been in the familly for years (25) and I have been paying the property tax on it for 6 years. I just hate seeing it there sitting. Maybe i'll figure what to do with it. My buddy says dirt bike track but my thoughts are the whole place is a dirt bike track.

A very good customer of mine manages the local Public Storage. He says the company does very well. But then again we are in the middle of Silicon Valley. 10x30 goes for $575 a month.




My brother in law builds and invests in Mini Storages. He has people that have been doing just that - for 25 or 30 years now. They have a very specific set of demographics/cost per square foot/size of property etc that absolutely must be adhered to. Any time they've ignored them - the property hasn't worked out.

Having said that...

These things are the most amazing cash cows I've ever seen. Most of the time Eric tells me that they're all rented out before they ever get an occupancy permit finished. The ones they build have on site live in management. For most of the units there is very little effort on managements part... the few that fail to pay get locked up and the contents sold to people that do that kind of work. He told me once that the biggest job is keeping the electronic gates working 24/7.

[slow4dr]

HUGE KUDOS TO YOU MY FRIEND!


Here's my one though I will add to your investing... Diversify. Don't just do all single family rentals. Stocks will add income - usually over time they grow - but more importantly for YOU - they will be LIQUID. So - I'd build a portfolio of dividend paying stocks.... to add to your housing empire. Seldom do all facets of investing work in conjunction with each other. Housing can go up - stocks might be down - interest rates WILL go up from here which will cause your housing to take a "hit" if they rise too quickly or too far... So you want BALANCE in investing. What happened to MANY MANY people is that all their liquidity dried up when they needed it most... that's a very very bad thing!

If your two houses go up enough -- you might try parlaying them into a fourplex or something similar but don't keep borrowing on them. The key here is to build a retirement cash flow - and that happens when your renters pay off the balance and YOU become the bank!

I have a friend that lives in a 12 million dollar house -- he started out doing EXACTLY what you've done. He parlayed that into 1000's of apartments. It didn't happen over night -- and his apartments are the type I invest in -- LLC's with investors -- his company puts the deals together - and they manage them. Sweet deal. :woot: :cheers:

I have been a little reluctant to look at multiplexes even though the ROI is usually much higher than a SFR. Both of my mentors have had bad luck with them and in my area multiplexes are typically in the not so desirable areas. That's not to say that it is not a possibility but it may be down the road once I have a little more time (confidence) under my belt.


The one thing I have been really thinking about lately is starting an LLC for the rental property. Many of the regulars at biggerpockets have recommended starting one for any rental venture. The problem I see is that technically you will need one for each property. What are your thoughts about that?

Property management is another subject I have been thinking about. For the time being I am more than happy to manage the one property by myself. With the future possibility of managing multiple properties in my spare time it may be worth every penny.

[GregWeld]

You must fully understand the market that you're investing in -- that has to be first and foremost. Sounds to me like you've already got a decent handle on that. If multiplexes are not to your liking - then absolutely stay away from them.


LLC's -- Yes and no. If let's say you already had all the properties -- and you bundled them into one LLC and then sold shares in the LLC to investors (if they were willing to buy them) it COULD work... but multiple properties like that in one LLC would become unwieldily. What if you wanted to just sell one bleeder - or one that had an outsized gain etc. Too many issues there. So YES -- it would be better to have one property within one LLC. The problem with that is that a lot of the profit/cash flow would be burned with accounting and regulations etc so what would be the point.

LLC's are better left for larger investments where you need a larger pool of cash/investors and the cash flow etc can sustain the legal requirements.

All these really are is a way to borrow the downstroke and improvement cash at a % - from "others" - while picking up a management fee and your 51% of the upside without a lot of cash out of your pocket. The investors put up the down etc. BUT ----- management has a lot of up front out of pocket expenses before they ever get to package "the deal". The LLC needs to be set up - prospectus production - accounting - up front earnest money - and blah blah blah. AND more importantly -- you'd better know who your investors are going to be up front. You don't do a deal like this and then go begging for investors! So there is a lot of work etc to get to that point.

I've looked at two deals in the last 3 months -- one in Tucson with $100K per share minimum - and one in the Bakkens with a 1MM minimum that was new construction. Both of these are multi million dollar deals. They both were at 7% return annually -- and of course your share of the upside if any and the tax offset depreciation along the way.

I turned them both down because of the idiots in congress and the POTUS -- since I don't know what the eventual tax changes - if any - are going to be. These kinds of investments are terribly illiquid and as an individual investor - you have ZERO say so. You're just along for the ride.

[Flash68]

I thought you were asking about forming an LLC to hold each rental property in for asset protection vs what Greg is talking about.

I would absolutely form separate LLC's (or at least one) to protect your personal residence and assets from any lawsuits or accidents that could result.

All it takes is one big incident to ruin a lot. An LLC is cheap when you look at it that way.

[XLexusTech]

When a Company issues these what does it mean to the rest of the stock?
Meaning since these are are more secure then comoon shares... would it drive down their price?

Problem... say you have Co. x shares of stock.. Co. X issues new Senior notes... will that drive your share price down?

[slow4dr]

I thought you were asking about forming an LLC to hold each rental property in for asset protection vs what Greg is talking about.

I would absolutely form separate LLC's (or at least one) to protect your personal residence and assets from any lawsuits or accidents that could result.

All it takes is one big incident to ruin a lot. An LLC is cheap when you look at it that way.

^^^ This :thumbsup: Asset protection was the primary goal and maybe a little extra anonimity as well.

[GregWeld]

When a Company issues these what does it mean to the rest of the stock?
Meaning since these are are more secure then comoon shares... would it drive down their price?

Problem... say you have Co. x shares of stock.. Co. X issues new Senior notes... will that drive your share price down?



That depends on what their overall balance sheet looks like -- and the reason for issuance. If they're borrowing money for the WRONG reasons then yes - it would affect the stock negatively.

Notes pay INTEREST and as such need to pay a higher rate than dividends because of the tax treatment (interest is ordinary income - dividends are taxed at the dividend rate).

[GregWeld]

The one thing I have been really thinking about lately is starting an LLC for the rental property. Many of the regulars at biggerpockets have recommended starting one for any rental venture. The problem I see is that technically you will need one for each property. What are your thoughts about that?



Sorry -- I thought you were asking about investment LLC's.... you're asking about asset protection.

Be very careful about the intended use of LLC's for asset protection when you are the sole control. They don't work very well for cases like that. Be certain you get a lawyer and tell them what you're trying to do. Listen carefully to his response.

My advice is to simply carry an umbrella policy for liability. They're very inexpensive -- and more importantly - since the carrier doesn't want to pay out - they will defend you as well. Look at your coverage as the more you have the less the carrier will want to be liable for - so they'll defend more vigorously...

If you have a 1MM policy somebody will sue you for 2MM -- the insurance company is only on the hook for a mill... big whoop.... but if you have a 10MM policy - somebody will sue you for 20MM and that puts some deep hooks in the carrier.... and they're going to work hard to not have to pay out and certainly don't want to pay out 5 or 6MM even in a settlement! So they let the dogs out!:cheers:

[GregWeld]

Pretty good - easy to understand RETIREMENT info here...


http://www.nbcnews.com/business/7-retirement-planning-myths-debunked-1C7480802


I couldn't agree more with TWO statements --- START EARLY -- and BONDS suck for retirement... we live too long and they have no growth to handle inflation. That retirement planning is so yesterday!

[GregWeld]

This is pretty funny --- not as in a joke --- but it matches what's happened in my household. The entire family is "hooked" on Apples (AAPL) products. The article calls this the "Apple tax".

I don't currently own any of the shares. I can't figure out what's going on with the wild swings this stock has gotten into. We'll see if it levels out or goes UP once the year ends (people locking in the 15% gain tax).

http://www.nbcnews.com/business/apple-tax-americas-costly-obsession-1C7535330

[Sieg]

The Apple phenom has me baffled to some degree........I see the younger generations taking extreme measures to create their own individuality. Tattoos, piercings, hair styles, attire, etc. Yet they all want to be the same when it comes to their personal electronic device image. :_paranoid

I'm not pro fruit primarily due to heavy proprietary nature of the brand. JMHO that's obviously not hip. :D

Disclaimer: Wife = iPhone. 14 year old son MacBook, iTouch, iPhone. 11 year old daughter iPod, iTouch, iPad, MacBook..........those would cover my front or rear suspension needs nicely for years to come. :rolleyes:

[GregWeld]

The Apple phenom has me baffled to some degree........I see the younger generations taking extreme measures to create their own individuality. Tattoos, piercings, hair styles, attire, etc. Yet they all want to be the same when it comes to their personal electronic device image. :_paranoid

I'm not pro fruit primarily due to heavy proprietary nature of the brand. JMHO that's obviously not hip. :D

Disclaimer: Wife = iPhone. 14 year old son MacBook, iTouch, iPhone. 11 year old daughter iPod, iTouch, iPad, MacBook..........those would cover my front or rear suspension needs nicely for years to come. :rolleyes:


I don't think it's about individuality - I think it's about what "works". Once you go Mac you never go back. :lol:

BTW -- That comes from a guy whom often thanks Bill for his house and a few other niceties!

[Sieg]

I don't think it's about individuality - I think it's about what "works". Once you go Mac you never go back. :lol:

BTW -- That comes from a guy whom often thanks Bill for his house and a few other niceties!

So you're Bi-Electronical? :willy: :D

[GregWeld]

So you're Bi-Electronical? :willy: :D



I don't know.... I've never looked!:rofl: :faint:

[WSSix]

I've never had a problem with PC's. Apple products are nice but, to me, not necessary or worth the money. I'm old school like that though. I have no smart phone and have no intentions of getting one. I read maps instead of paying for GPS devices. I also don't like touch screens compared to buttons. That's ok though, I'll put the money I save having my old cell phone into my savings and stocks. :D

[glassman]

I'm not a techi, but innovation has made Apple stellar the last decade.5. The new products, not so innovative. Great products though. It's hard to say whether it will go up from here, but my monies not going into it.

Mike

[XLexusTech]

Thats why i never tell people what i invest in, only the few that know and trust me, it always goes the same way, friend/relative begs for "tips" and it goes south and they think you were just doing a pump and dump. But when it goes right they just spend their time imagining how much you made and forget they just made money for nothing.
OK the Mayans were right... my BPT is being outperformed by my FB ... dividends excluded :-)
the world is defiantly coming to an end :willy: :_paranoid

[GregWeld]

OK the Mayans were right... my BPT is being outperformed by my FB ... dividends excluded :-)
the world is defiantly coming to an end :willy: :_paranoid



That's funny!


Faceybook looks to be making a run on the upside. It's still not for me - but I've lost hypothetical millions NOT investing in stuff like that.... So now you really have nothing to loose so you might as well hang in there.

Personally -- I like the almost $14,000 a month I get in dividend from JNK... :unibrow:


I also totally agree with the fellow you quoted that said he doesn't give anyone tips or tells anyone what he's invested in. The reasons he states are spot on! This is why I constantly say that I'm using EXAMPLES... and that people just need to learn HOW to do their own choosing! There's nothing worse than making a recommendation -- which turns out to be inappropriate for that person - and they sell the first time it goes down - because they really have no idea why the hell they bought it in the first place.

This thread is all about HOW not WHAT.... big difference in my opinion! And I hope it's helped many folks just get started. :woot:

[Rybar]

OK the Mayans were right... my BPT is being outperformed by my FB ... dividends excluded :-)
the world is defiantly coming to an end :willy: :_paranoid

Hahaha awesome, I'm in the exact same boat as you. :lol:

[toy71camaro]

Well, tryin to pin down the future of the fam. Put in offer on a place back in our hometown (about 15 miles away from where we are currently, and we drive there 2x a day for school/daycare for the kids).

Every house has sold in that town in 2-3 days. but this one had some weaknesses that kept it from selling (close to train). I grew up near there, so I wasnt worried. Offered him 95% of what he was asking. Its been on the market 3+ weeks (very rare for this area).. He declined the offer, stating "its only been on the market a couple weeks, so we cant accept your offer right now". Then he turns around and re-lists it for 10k more the next day. LOL.

Well, we tried. Really bummed tho. Had a nice big lot to put a shop on later too.

[GregWeld]

Houses here are selling same day -- and before noon... and for full price or higher and with back up offers.

I would say that IF YOU CAN -- and you want the house -- you should just buy it. Remember that it's still "historically" low I would assume - price wise from where it was -- AND more importantly the super low interest rates.

[WSSix]

Given the trouble HSBC is in, I think it's safe to say not only do you need to be careful with who you're invested in but also what company you're using to make those investments or hold the accounts. Wish I could say I knew it was coming or that they were even in trouble but the reason I left them was because I could get a better rate on my savings elsewhere.

[GregWeld]

So I know this thread is quiet.... frankly there's not been much to add to the learning experience.... and there hasn't been many (any) questions lately.

I will say that I put some major cash to work today. I've given a few employees a few weeks vacation - but today was "get your azz back to work day". Mostly just added to existing positions. I'm still chasing "yield"... and even more so if we're going to see higher taxes!

I think there's still a big chance that the bozos in Washington DC don't get it together --- but I think there may be a bigger chance of missing a few days of nice moves if you're sitting out. Of course this is nothing but a giant guessing game!

HOW ARE YOU GUYS DOING??

[spacepirate]

Okay Greg,

Maybe your words of wisdom can guide me. I was saving to buy a home in Los Angeles around 400k. My goal was 20% and I'm half way there. However, it seems to have turned into a sellers market and I want to put my money to work for me instead of just keeping it in savings while I meet my goal. What would you suggest I do with my funds while I wait for the next few years?

[GregWeld]

Okay Greg,

Maybe your words of wisdom can guide me. I was saving to buy a home in Los Angeles around 400k. My goal was 20% and I'm half way there. However, it seems to have turned into a sellers market and I want to put my money to work for me instead of just keeping it in savings while I meet my goal. What would you suggest I do with my funds while I wait for the next few years?


Few years?? 2? 5?


So this is really an open ended question without a lot of specifics... and I'm not an investment advisor. But I would give you some things to ask yourself and to think about.

If you have some money -- and you think housing is going UP -- why not buy a house you can afford NOW and ride the wave while you continue to save?
A rising tide floats all boats... and you could be gaining equity in a smaller house or whatever while you build up savings at the same time.

The problem with "what to do" in the meantime is that you need to be liquid if you're continuing to shop for a house. I will guarantee that if you put your money into the stock market -- in order to make a return -- that the day after you found a house to buy - the market would take a dump. Thus the age old investment advice that says "never invest money you think you might need". This can be compounded by the fact that right now the "market" is waiting on pins and needles regarding the so called fiscal cliff etc.

Now --- having said that... making .25% interest on your money won't get you very far towards that down payment...:rolleyes: And I like to use a couple high return "stocks" (they're ETF's) one is Junk bonds (JNK) and one is corporate bonds (HYG). They're "fairly stable" price wise and I park pretty large sums of dough in them just because they are stable and they pay a great monthly dividend as a percentage. Since they move in basically lock step - I don't see one being better or worse than the other. You could also look at the sin stocks -- tobacco - as a place to park some dough. Just be forewarned that without a clear direction for tax treatment etc -- anything is a gamble and a guess.

:cheers:

[GregWeld]

Nova -- Clear some space in your PM box. :cheers:

[NOVA]

done sorry - Nova -- Clear some space in your PM box. :cheers:

[Woody]

So I know this thread is quiet.... frankly there's not been much to add to the learning experience.... and there hasn't been many (any) questions lately.

I will say that I put some major cash to work today. I've given a few employees a few weeks vacation - but today was "get your azz back to work day". Mostly just added to existing positions. I'm still chasing "yield"... and even more so if we're going to see higher taxes!

I think there's still a big chance that the bozos in Washington DC don't get it together --- but I think there may be a bigger chance of missing a few days of nice moves if you're sitting out. Of course this is nothing but a giant guessing game!

HOW ARE YOU GUYS DOING??

I agree with you about the giant guessing game. I am sitting here waiting for an opportunity to put some more money in the market thinking we will get a good correction if they don't resolve the fiscal cliff issue. On the other hand I am thinking there is going to be a big rally that I will miss out on if they do resolve the issue. I have decided that I am just going to be patient and wait it out. On days like this I am glad to be invested, but wish I had put more in at the last correction.

[slow4dr]

As far as long term dividend paying stocks, do you gus have a minimum/maximum P/E ratio you look for? I've been researching all that I can and I keep coming back to somewhere around 10-20. That doesn't necessarily mean I am going to exclude one that has a P/E of 9.99 but I am just thinking a general rule of thumb for someone like myself that is just starting out.

[GregWeld]

As far as long term dividend paying stocks, do you gus have a minimum/maximum P/E ratio you look for? I've been researching all that I can and I keep coming back to somewhere around 10-20. That doesn't necessarily mean I am going to exclude one that has a P/E of 9.99 but I am just thinking a general rule of thumb for someone like myself that is just starting out.



P/E ratios don't make you any money. What you should be studying instead is the total return... 'cause over time - that is what makes you money.

[hifi875]

I would like to thank this thread(mainly Greg) for getting me thinking more about managing my own money(or some of it anyway). My little homemade mutual fund is doing quite well. My overal return is 27% for the year. Since i brought it up, it will probly tank tomorrow. If it was only on a larger scale, I would really have something, but its a start. Thanks Greg!

[slow4dr]

P/E ratios don't make you any money. What you should be studying instead is the total return... 'cause over time - that is what makes you money.

Thanks, I am really trying to keep from having analysis paralysis so that simplifies some decisions.

[bdahlg68]

Still very happy with ytd results... Up around 14%. Happy with positions going into the cliff. Considering some position in a US bank, but havent identified a best of best candidate yet. SCCO has turned into a gem....

[GregWeld]

I would like to thank this thread(mainly Greg) for getting me thinking more about managing my own money(or some of it anyway). My little homemade mutual fund is doing quite well. My overal return is 27% for the year. Since i brought it up, it will probly tank tomorrow. If it was only on a larger scale, I would really have something, but its a start. Thanks Greg!

Way to go! Holy cow! 27%!!!! I'll pay you to be MY money manager!!
:lol: :thumbsup:

[GregWeld]

Thanks, I am really trying to keep from having analysis paralysis so that simplifies some decisions.



Yes -- and that IS what happens.... it just becomes figures figures figures... pretty soon you can't remember anything but silly numbers. I've preached on here time and again -- just keep it simple! You're not running a 3 Billion dollar money fund... nobody is going to fire you because you were half a point off the average! Buy good (make that GREAT) companies... with good total returns... that have good % dividends... NAMES YOU KNOW and LIKE the company! Kick back and retire a rich guy.


:cheers:

[GregWeld]

Still very happy with ytd results... Up around 14%. Happy with positions going into the cliff. Considering some position in a US bank, but havent identified a best of best candidate yet. SCCO has turned into a gem....

Think about 14% --- that's like 1400% MORE than you'd get in a C/D at the bank.... What's not to like about that?



:thumbsup: :thumbsup:

[bdahlg68]

Think about 14% --- that's like 1400% MORE than you'd get in a C/D at the bank.... What's not to like about that?



:thumbsup: :thumbsup:

Yup... And it's better than the special funds of an investment account I have too.

[hifi875]

Way to go! Holy cow! 27%!!!! I'll pay you to be MY money manager!!
:lol: :thumbsup:

My biggest 2 gainers are bank stocks. 1 is up 59% the other is up 31%. They were of course the most volatile

[WSSix]

I'm just waiting for the first of the year. Then I'll drop my annual Roth payment into the account and buy some more stocks. I'm thinking of either going with 4 or 5 stocks. It'll be a smaller amount in each stock than what I currently have per stock but I want some more diversification. I gotta do something to keep another OXY from killing me. Hopefully byt the end of January I'll have the money transferred and stocks purchased. Unless of course the Mayans are right.

[GregWeld]

I'm just waiting for the first of the year. Then I'll drop my annual Roth payment into the account and buy some more stocks. I'm thinking of either going with 4 or 5 stocks. It'll be a smaller amount in each stock than what I currently have per stock but I want some more diversification. I gotta do something to keep another OXY from killing me. Hopefully byt the end of January I'll have the money transferred and stocks purchased. Unless of course the Mayans are right.



Thus the magic "5%" rule -- that no single investment be more than 5% of your portfolio... that way it can go to ZERO and would only kick your sorry butt by 5%.

Hard to stick by - and makes you trim "winners" etc - but it's a very good rule 99% of the time.

The bad part of the rule -- there's always "something wrong", right? Is that stocks like the good old days - let's say Microsoft -- or Google -- or an Apple is going GANGBUSTERS and you follow the rule faithfully and sell every time they hit 10% of your portfolio. In hindsight - that can be very painful. As me how I know that! :D But it saves you on the downside... so is worth heeding. The old Pigs get fat hogs get slaughtered!

[GregWeld]

I was reminded today via CNBC about very good point to remember...


Regardless of the tax changes etc -- if any -- those of you with funds in retirement accounts are not affected. Since those funds grow Tax DEFERRED...
and those with ROTH IRAS will never pay tax on withdrawals so those accounts are looking better and better!


Mahalo! :woot:

[GregWeld]

How many of you have had retirement plans at other employers etc. Here's something I would have NEVER thought about. It's worth just giving a few minutes thought to.

With all the changes to electronic banking etc.... WOW!



http://www.bankrate.com/financing/retirement/woman-drains-exs-retirement-account/?ec_id=m1078090

[WSSix]

Wow is correct. However, I'm surprised he wasn't able to have her charged with fraud and theft. Or maybe he did and that's just not part of this story. I can understand how the plan might not be liable based on the info we've been given but that doesn't excuse the exwife's outright theft. Guess he also got a clear indication of the type of person she is.

I'll have to keep all this in mind as I'm trying to change jobs and have company retirement accounts. I know I'll have to look into rolling things over etc or possibly leaving them where they are. I'll cross the bridge when the time comes.

[GregWeld]

Trey -- I think the real issue was that HE failed to notify of a simple address change, and that alone absolved the institution from safeguarding his money/account!! Ridiculous - but it's obviously legal. So make sure all your accounts have your current mailing address!


The thief - his ex wife - is a different issue and that's criminal... but my guess is it would be hard to prosecute particularly if she could show they were married during the savings period... she might be able to lay claim to some of it. She's still a thief -- but the law is usually on THEIR side.

[CRCRFT78]

Wow that's just plain f***ed up. Thank goodness I'm on top of my accounts.

[WSSix]

It's a very important point. I know with all the moving I have done since I left Georgia 2.5 years ago now that it was just easier and safer for me to list my mom's address where I grew up as my billing address. I can trust dear ole mom :D

I know another point along the same lines is family names. I'm a third. Trey is my nickname. My credit report is not intertwined with my father's but some addresses have been mixed up. I've had to do some work on my part to make sure none of my accounts have been attached to his report and visa versa. We both have good credit but it's still too important to not stay on top of in my opinion.

[XLexusTech]

so I totally get he theory... but follow me here... I maintain 6 months emergency cash.
I have a 401k (mutual funds) Account one
I have 2 + years income post tax $$ in vanguard funds... Account two
I have my 'investment' account... Account Three..... which i just reviewed against the rule of 5%.... what i found was since I only have 14 stocks in it.. the rule of 5.. cant apply.. so what to do? Buy more stocks to balance things out? or dont worry about it because my spread and available cash..already provides some safety?

BTW my stocks are a good mix of "Coffee house" stocks + a few drips and some Muni's... excluding my two gambles... FB and BPT I yield over 12% this year before dividends.. add in the two losers and I am under water...

[GregWeld]

You've stumped me because I'm not sure what you're asking.


The 5% rule just means you shouldn't have more than about 5% in any ONE single investment ---- regardless of what account they're in.


I have a buddy that would buy the same stock in his personal account - then he'd buy it in his IRA and again in his wife's IRA.... He just couldn't look at his money and think of it as all his... regardless of the names on the accounts. No amount of badgering by me could fix it. He suffered a LOT during the downturn of '08.

[XLexusTech]

You've stumped me because I'm not sure what you're asking.


The 5% rule just means you shouldn't have more than about 5% in any ONE single investment ---- regardless of what account they're in.


I have a buddy that would buy the same stock in his personal account - then he'd buy it in his IRA and again in his wife's IRA.... He just couldn't look at his money and think of it as all his... regardless of the names on the accounts. No amount of badgering by me could fix it. He suffered a LOT during the downturn of '08.

Forgetting the cash and other accounts.. Using a basic theoretical example..if i have a stock portfolio with 14 stocks... and 20K invested... then some HAVE to have more then 5% in them... do I buy an additional 6 and balance it out?

[GregWeld]

Ah ha --- no...... is the simple answer. This is a "guide" not a hard and fast rule and it's just to keep people from risking too much in one single investment. But now you just work to invest any new money to keep all in balance. It's like diversifying. You do that the best you can - but obviously - nobody can be perfectly diversified. You just think about it when making your choices.... Like I don't need 25% of my investments in OIL... etc. If you have 25% in oil - then you're next purchases need to be in something else.

These "rules" work better when you have more money invested. Their intent is to keep you from losing too much or being down too much. But if someone only has $2500 invested - it's pretty ridiculous to think they can stay at 5% AND be diversified. At 10K - they could then maybe be 10% per investment (1K) and have started to have some diversification. At 100K invested - now you're on your way to the 5% with 20 names and you should absolutely be diversified.

Even at my level - I can't always stick to the 5%... but I'm always aware.

[CRCRFT78]

Lately Apple has been killing me with their decline in share price but I'm still in the positive at 28.46%. So I opened up the little tab showing me when I purchased the shares and notice that my last purchase is down 19.26% while the rest of the shares still have a positive percentage gain. Is there a way to sell off those shares and take the loss while maintaining the positive shares in my portfolio? I recall Greg mentioning something like this but I am not quite sure if I understood Greg correctly. I haven't lost faith in Apple yet to want to sell all the shares but eliminating the shares with a loss I think would be a smart move for now. ANy opinions on this?

[GregWeld]

Lately Apple has been killing me with their decline in share price but I'm still in the positive at 28.46%. So I opened up the little tab showing me when I purchased the shares and notice that my last purchase is down 19.26% while the rest of the shares still have a positive percentage gain. Is there a way to sell off those shares and take the loss while maintaining the positive shares in my portfolio? I recall Greg mentioning something like this but I am not quite sure if I understood Greg correctly. I haven't lost faith in Apple yet to want to sell all the shares but eliminating the shares with a loss I think would be a smart move for now. ANy opinions on this?

Posting from my phone.


Schwab has a check box you can check before any transaction that has tax lots factored in. But I'm not where I can read whether or not you can just sell shares with a loss first. U can always call your brokerage to ask questions like this.

[GregWeld]

Lately Apple has been killing me with their decline in share price but I'm still in the positive at 28.46%. So I opened up the little tab showing me when I purchased the shares and notice that my last purchase is down 19.26% while the rest of the shares still have a positive percentage gain. Is there a way to sell off those shares and take the loss while maintaining the positive shares in my portfolio? I recall Greg mentioning something like this but I am not quite sure if I understood Greg correctly. I haven't lost faith in Apple yet to want to sell all the shares but eliminating the shares with a loss I think would be a smart move for now. ANy opinions on this?




Personally I'd hold till they report this quarter. I think their Christmas sales will be pretty strong. But that's just my guess.

[CRCRFT78]

Thanks for the response Greg. My curiousity got to me more than the desire to want to sell the negative shares. I just noticed the negative shares are what's affecting the overall performance by averaging down the positive shares value. This is in my Fidelity Rollover IRA account and I'm not sure I can sell just the poor performing shares without actually dealing with a broker in person.

[GregWeld]

Okay -- back from the pool now.... :unibrow:


Since you hold the stock in an IRA -- there's no provision for taking a tax loss... so unless you just don't like the stock - I'd hold it. I'd only sell if you had a TAXABLE account and wanted to do a year end "take some profits and offset some of that with a loss". But you can't do that in an IRA.

Remember that the day after you sell -- the stock will run 60 points. :willy:

[Sieg]

Okay -- back from the pool now.... :unibrow:



..........you went down and so did the market.

Waiting for buddy dive pics. :unibrow:

[GregWeld]

..........you went down and so did the market.

Waiting for buddy dive pics. :unibrow:



I've been an Advanced Open Water diver since 1989.... I quit taking pics long ago. Well.... That and there's nothing exciting about pics of a beached whale.:rofl:

[WSSix]

Well, this was a good surprise in my otherwise poor portfolio.

http://www.imassera.com/whole-foods-wfm-announces-new-shareholder-dividend/2419145/

Nothing but a sea of red in my portfolio. Couple more days til I make my new purchases though. I'm hoping the clearance sales will still be going then. That's what all that red means, right :lol:

[GregWeld]

Well, this was a good surprise in my otherwise poor portfolio.

http://www.imassera.com/whole-foods-wfm-announces-new-shareholder-dividend/2419145/

Nothing but a sea of red in my portfolio. Couple more days til I make my new purchases though. I'm hoping the clearance sales will still be going then. That's what all that red means, right :lol:



Yes! End of year profit taking - the whole fiscal cliff debacle - and blah blah blah.... the world is not coming to an end. Buy LIGHTLY... the old scale in... 'cause it can always go lower... but LONG TERM things will prove to all that the world is fine. Especially when you get that dividend along the way!

[WSSix]

Well, my 2013 ROTH contribution is in my checking account. As soon as the new year starts and I finalize my selections, I'm going to buy my next round of stocks.

This is what I have and the sectors they are in
OXY (energy)
KO (Consumer beverage)
SO (Utilities- electric)
KMP (Utilities- natural gas)
WFM (Retail- specialty)

These are the new ones I am considering and their sectors
MCD (service- restaurants)
MO (Consumer- Tabacco)
CLX (Consumer- Household)
JNJ (Healthcare)
COST (Retail- specialty)

Since it's a ROTH, I have $5000 I can spend. I'm thinking I should go with five different stocks instead of four. That should diversify my portfolio more hopefully. I'm wondering though, if I add these five stocks listed, will I not be as diversified as I think? I would end up with three Consumer stocks and two retail. I think I will be fine because the three consumer stocks are in three entirely different sub-sectors. The two retails are both listed as specialty but have very different client bases and different products. Is this still ok or are they more closely linked than I think because of their major sector? Anyone have a sector suggestion for me to look into? I'm just looking at names I know and use so I'm limited in my thoughts.

Why these selections:

MCD because of the dividend and the fact that it's McDonalds. It's the same as KO for me.

MO because as Greg has mentioned and I've read elsewhere, MO itself is diversified. I was also looking at PM but they only have cigarettes as their product. MO makes its money elsewhere mainly. The other thing is MO costs less than half of what PM does. MO's dividend is slightly more than half of PM's. So given the same dollar value to spend, I'll own more than double the number of shares as I would with PM. When the dividend pays, it'll pay out more dollar wise than the PM will. I then in turn will buy more shares of MO with the slightly higher dividend payment as well.

CLX has the better dividend than CL or PG. I also like their past long term performance better. Hopefully, it's an good indication of the future too.

JNJ is the same as CLX. Just looking at steady stocks that pay good dividends and are solid companies.

COST is like WFM for me. I like the way they operate their business. Their attitude towards their employees and customers is what I like. I think more companies should follow their lead so I support them. For those that don't know, their cashiers earn enough to live on and are often there for a long time. They only have a 15% markup on anything they sale according to Clarke Howard. They also require their executives to go into the stores occasionally. Sure, that's more symbolic than anything but I think it matters. If you shop there, don't be surprised one day to learn that the person who greeted you or walked up to you and asked you some questions was a higher level executive and not just the store manager.

So those are my possible selections. I'm just trying to maintain my money and make it work for me with dividends. Anyone have any comments or suggestions for me. I'm always willing to listen.

Thanks

[GregWeld]

Trey -- That's a great looking portfolio and will serve you very well.

You're right -- buy 1K each of those names

Next year you can just add to each holding $500 each - 'cause I think you'll have 10 names total with this years buy.

Then you can start 2014 looking to add 5 new names - and so on - adding to positions and working your way to a total of about 20 names. Then you can feed them as you want to.

You'll retire to a nice life of leisure!


:cheers: :woot:

[WSSix]

Thanks, Greg. That's basically my plan. Slowly spread it out and build it up. I still have half of my ROTH in Vanguard's mutual fund and there's also my 401k with Fidelity. I guess I'm still not certain enough of myself to not have a portion of my funds in "professional hands". I need to check on the 401k but I've been pleased with the Vanguard fund so far this year. It paid me a descent dividend and has been weathering the recent turmoil well. We will see in a few years how it compares to my more diversified stock selections.

[WSSix]

Not sure how long this will last but go to google.com/finance and type in sell. Press enter and laugh. :thumbsup:

[GregWeld]

Remember during this whole ridiculous "fiscal cliff" etc -- to go back and check out the longer term charts of the shares you own... it's somewhat soothing to see that line headed higher in the long term picture.

All the smoke and spillage in between is just a buying opportunity.:unibrow:

[GregWeld]

A stock I've been picking away at is American International Group (AIG) the big insurance conglomerate that got a bailout from "us". The treasury sold it's stake (and made a few billion in profit) so is finally out of the picture. This stock was a wildly profitable dividend payer until it got too big for it's britches and got into trouble. Hopefully the management learned their lesson!

I'm not pitching it -- just discussing for investing 102 -- as this is the kind of HISTORY that I look for. It USE to be a good dividend payer. That was all suspended during the debacle it got itself into. And what I'm hoping for is that the GROWTH returns -- and they go back to dividend payments. If so - buying in "early" will get me a nice total return.

I'm not putting much into it because buying this kind of stuff is speculative, i.e., gambling. But it's a good educated guess over an IPO. I have history to go off.

In '08 this was a $1200+ stock paying a $4 per quarter dividend.... of course it's an entirely different company now. But I'd love to catch a double or maybe even a triple from here.

[GregWeld]

Lately Apple has been killing me with their decline in share price but I'm still in the positive at 28.46%. So I opened up the little tab showing me when I purchased the shares and notice that my last purchase is down 19.26% while the rest of the shares still have a positive percentage gain. Is there a way to sell off those shares and take the loss while maintaining the positive shares in my portfolio? I recall Greg mentioning something like this but I am not quite sure if I understood Greg correctly. I haven't lost faith in Apple yet to want to sell all the shares but eliminating the shares with a loss I think would be a smart move for now. ANy opinions on this?



Hopefully you haven't blown the Apple (AAPL) out yet -- 'cause just look at the nice move it's had today... Thus -- I'd continue to hold. After today - nobody will be selling in order to lock in the huge gains at LTCG's tax rate.

[GregWeld]

..........you went down and so did the market.

Waiting for buddy dive pics. :unibrow:





http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/file-10.jpg





http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/file-9.jpg





http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/file-11.jpg

[WSSix]

That manta ray is cool!

[Sieg]

Thanks GW!

1:15 and 40* here and the Real Feel is chill ya to the bone. :mad:

[GregWeld]

Well -- those pics are really from a dive in 2008.... but I was feeling under pressure to produce.


Here! Does this help? I always am trying to be helpful.....:woot:






http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/file-13.jpg

[GregWeld]

Back to Investing 102 ---- today's action is why it's so hard to be OUT of the market waiting for something to happen. This is why I park cash in an investable spot rather than just sitting on cash.

I consider parking cash in ETF's such as JNK - HYG - NLY... where you get a pretty dang good dividend -- the share prices are "relatively" stable. I currently have quite a bit parked in JNK and NLY... and while NLY has been drifting lower (it's very interest rate sensitive).. overall when I see the dividends I've collected and the increase made on JNK has offset the loss I have in NLY... and overall that's the objective. I look at my account as a whole not as individual performance... and you MUST included the dividends in the calculations.

So just to show what I'm talking about....


I currently show (can't say HAVE because I haven't sold so just have a paper loss) a loss in NLY of $16,500 but consider the dividends -- I don't really have a loss.

I currently show a gain (again just paper gain) on JNK of $39,800

Just the gain in JNK cancels out the loss in NLY -- but lets consider the dividends collected:


10/29/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$17,500.00
07/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$19,250.00
04/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$13,750.00
01/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: CASH DIV
$14,250.00


and JNK


12/11/2012 JNK SPDR BARCLAYS ETF HIGH YIELD VERY LIQUID
type: ORD DIV - CASH
$13,354.56
09/12/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$6,682.32
08/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,296.25
07/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,356.51
06/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,368.39
05/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,462.88
01/06/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: LT CAP GAIN
$1,320.39
01/06/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: CASH DIV
$1,093.49



Notice that as the "fiscal cliff" talks seemed to be falling on deaf ears - I increased my JNK holdings significantly... because I had cash on hand - took some year end LONG TERM capital gains (locking in the 15% rate)... so all in all these are making me money SO FAR. That can change in a heartbeat - but for now the strategy is working. IF -- BIG IF -- these clowns can get their act together -- I'll scale out of these and work towards normal company specific positions.

[XLexusTech]

I just read a few articles on "Rules for investing" this one was pretty interesting... http://www.thestreet.com/static/25-rules.html

Thought it might be a good direction considering the new year.. what are the "LatG investing 102 thread" rules for investing...

I like the Homework one Cramer mentioned..

[ErikLS2]

Mostly for you Greg since you know NLY pretty good. I've been away for a while but going to re-do my whole stake along the lines of what's discussed here. I was just poking around today and found this:

http://seekingalpha.com/article/1067181-ellington-financial-the-best-mortgage-reit-at-a-healthy-discount-to-book-value?source=marketwatch

I'm wondering if you know anything about this company or have any comments on this article?

[GregWeld]

Mostly for you Greg since you know NLY pretty good. I've been away for a while but going to re-do my whole stake along the lines of what's discussed here. I was just poking around today and found this:

http://seekingalpha.com/article/1067181-ellington-financial-the-best-mortgage-reit-at-a-healthy-discount-to-book-value?source=marketwatch

I'm wondering if you know anything about this company or have any comments on this article?



I read the SeekingAlpha article and the writer makes many compelling points about EFC. I just trade NLY because it's a good name that I know and I can trust it. I park pretty large sums in some of this stuff -- and I have to be able to sleep well at night. Thus my "Buy names you know and trust" which I try to hammer home every chance I get.

There are ALWAYS better names -- or better peer performance. But can you sleep with them? What costs people money is that they panic at the first downturn or hiccup - and this panic is exaggerated when they put money into something they don't know anything about.

There is NOTHING wrong with learning about any or all of these company's and if you (you being the larger - any of you) feel this is a place you want to put money and like all the metrics etc over some other investment... then that's the best you can do. It's the best ANY of us can do. Many times - while researching a new name - you find out things about the company you might already be in! They'll all compare "their" company against the peer names. Sometimes you learn good stuff - sometimes you start to question the name you're in and go back and dig deeper... and I'm 200% for this type of self education! That is what we all should be doing and need to continue to do. Jim Cramer calls it HOMEWORK.

My son looked over my shoulder just a minute ago and said "dude - you've been doing that all day". True enough.... I'm always looking at this stuff - comparing - charting... reading. I love it as much as I do car stuff. My response to him was "yep - that's why I'm good at it". :D

[GregWeld]

By the way -- I'd have made more money using EFC than I have in NLY over the last 6 months or so!

Thanks for bringing up this name --- I'll do more poking around and put it on my "key an eye on it" list!

[GregWeld]

It will be very interesting to see the market reaction to the proposed (since the House hasn't voted yet) changes to the tax laws.

Dividend tax rates increase from 15% (far too low IMHO) to 20%... which is still too low.

We can argue on and on -- but it's this guys opinion that the tax rates are too low on top earners -- BUT -- BIG BUTT -- what top earners really understand and would like to see change is the WASTE that government does with the money they already were getting. That's a different discussion and let's not get into it.

My guess is if you're not in the market on Wednesday morning --- you're going to miss a very nice move UP. But that's just my guess. I'm thinking there's lots of money sitting on the sidelines avoiding a possible disastrous raise in the dividend tax rate... and since that appears to be set - that sidelined money should come pouring back into equities. I know that's what I intend to do. I'll scale back in but... I'll still be a net buyer. Around 40% of the one Schwab account I use for discussions here - is in "parked" cash. :thumbsup:

[John510]

Im just happy they voted to not double to price of milk!

[WSSix]

Score!!!!!!!!!!!

You can contribute $5500 per year to a Roth IRA now. That was a pleasant surprise. So my max has been reached for this year already. Next week I should be able to purchase the stocks. I just hope they wait til I'm on board before they take off like a rocket ship. Hey, I can engage wishful thinking, right? :D

[CRCRFT78]

I just received this letter from Fidelity:

12/31/12 14:07:16
CATERPILLAR INC. IS OFFERING TO PURCHASE ALL SHARES OF ITS COMMON STOCK FROM SHAREHOLDERS OWNING LESS THAN 100 SHARES (99 SHARES OR LESS) AS OF RECORD DATE NOVEMBER 26, 2012. SHAREHOLDERS WILL RECEIVE THE WEIGHTED AVERAGE MARKET PRICE PER SHARE TENDERED, THE DAY THE SHARES ARE SOLD BY THE AGENT. A PROCESSING FEE OF $2.00 PER SHARE UP TO A MAXIMUM OF $50.00 PER ACCOUNT WILL BE DEDUCTED TO DEFRAY THE COST OF THE PROGRAM.

HOLDERS ALSO HAVE THE OPTION OF ROUNDING UP THEIR HOLDINGS TO EXACTLY 100 SHARES. HOLDERS ELECTING THE ROUND-UP OPTION WILL BE CHARGED THE ESTIMATED PURCHASE PRICE OF $95.00 PER SHARE PURCHASED. A PROCESSING FEEOF $2.00 PER SHARE PURCHASED (UP TO A MAXIMUM OF $50.00 PER ACCOUNT) WILL BE DEDUCTED TO DEFRAY THE COST OF THE PROGRAM.

I'm wondering, if I don't want to sell but I can't afford to round up to 100 shares does this matter? I thought I'd ask here before I call them in the morning.

[CRCRFT78]

Waking up to a nice jump in the market, today is starting to look like a good day.

[GregWeld]

I can't find any news on CAT taking an action like this... And I would NEVER respond to an email sent from any financial institution. Only way I respond to a financial institution to to use my OWN links (not those in an email) and or call them using the phone numbers I have (not those in an email).

I also have no idea what - if anything - you should do - since I don't understand the "offering".

From time to time I'll have a "Call" on some senior subordinated notes etc get called away - meaning that the company has the right to pay them back early at a pre agreed price. This just happened to symbol GE-A... General Electric 6.5% notes... they did a partial call. But I've not ever had a situation where they were just taking me out of a STOCK.







I just received this letter from Fidelity:

12/31/12 14:07:16
CATERPILLAR INC. IS OFFERING TO PURCHASE ALL SHARES OF ITS COMMON STOCK FROM SHAREHOLDERS OWNING LESS THAN 100 SHARES (99 SHARES OR LESS) AS OF RECORD DATE NOVEMBER 26, 2012. SHAREHOLDERS WILL RECEIVE THE WEIGHTED AVERAGE MARKET PRICE PER SHARE TENDERED, THE DAY THE SHARES ARE SOLD BY THE AGENT. A PROCESSING FEE OF $2.00 PER SHARE UP TO A MAXIMUM OF $50.00 PER ACCOUNT WILL BE DEDUCTED TO DEFRAY THE COST OF THE PROGRAM.

HOLDERS ALSO HAVE THE OPTION OF ROUNDING UP THEIR HOLDINGS TO EXACTLY 100 SHARES. HOLDERS ELECTING THE ROUND-UP OPTION WILL BE CHARGED THE ESTIMATED PURCHASE PRICE OF $95.00 PER SHARE PURCHASED. A PROCESSING FEEOF $2.00 PER SHARE PURCHASED (UP TO A MAXIMUM OF $50.00 PER ACCOUNT) WILL BE DEDUCTED TO DEFRAY THE COST OF THE PROGRAM.

I'm wondering, if I don't want to sell but I can't afford to round up to 100 shares does this matter? I thought I'd ask here before I call them in the morning.

[GregWeld]

Jose,



My guess is - there's too much bookkeeping and they (CAT) just want to take out small batch holders so they don't have to cut dividend checks and mail notices out etc.

[JKnight]

I don't see this "program" as being legit. Not only is this weird, the $2.00 per share ($50 per account) processing fee seems to make this a pretty raw deal. Why would you go through their "program" rather than just selling in the market and paying a normal trade commission? With most discount brokerage firms this would be less than $10 total? From what I read above, it's not like they're going to pay you a premium to the fair market value, so why use the "program"...

[GregWeld]

I don't see this "program" as being legit. Not only is this weird, the $2.00 per share ($50 per account) processing fee seems to make this a pretty raw deal. Why would you go through their "program" rather than just selling in the market and paying a normal trade commission? With most discount brokerage firms this would be less than $10 total? From what I read above, it's not like they're going to pay you a premium to the fair market value, so why use the "program"...



TOTALY AGREE with this!


The whole thing sounds fishy to me.

[GregWeld]

Jose,


Hope you held that APPLE stock?????


:D

[CRCRFT78]

This was an email from Fidelity that required me to log into my account in a seperate action. Not through a link provided with the email. I checked my Schwab account, also containg shares of CAT (don't ask, rookie mistake) and saw no mention of this. I hope I don't have to give up my shares just because they decide to squeeze out the little guy.

[GregWeld]

You boneheads ought to be happy with yourselves today! :faint: :cheers: :thumbsup:

[Sieg]

You boneheads ought to be happy with yourselves today! :faint: :cheers: :thumbsup:
Certainly could have been worse. :D

Big picture........just another hump in the long-term chart. :yes:

[96z28ss]

It was a good day today. some of my positions did real good.
PSX +4%
KMP +4.75%
MO + 3.5%
PM +3.71%
T +3.8%
KO +3.72%

[Bucketlist2012]

You boneheads ought to be happy with yourselves today! :faint: :cheers: :thumbsup:

I was ready for anything today....But man, my Dog and Pony are tired after the show....

[GregWeld]

Certainly could have been worse. :D

Big picture........just another hump in the long-term chart. :yes:

That is exactly right! And tomorrow - half the hump - could get shaved a bit. It's called PROFIT taking. Best left to traders...

It's still more fun to ride the day this way than a fall off a cliff... :unibrow:

[GregWeld]

It was a good day today. some of my positions did real good.
PSX +4%
KMP +4.75%
MO + 3.5%
PM +3.71%
T +3.8%
KO +3.72%


I had one "red" position (KMP) go positive and another red position (NLY) get almost to the green. Ya gotta love that!

3 and 4% moves in one day are the kind of days you have to have... that's one of those two steps forward kinda days. On average the "market" moves about 10 or 11% in a YEAR! So that 3 and 4% on one day is huge. :woot:

[GregWeld]

I was ready for anything today....But man, my Dog and Pony are tired after the show....



Mike --- I'd love to FIRE the entire team that drug your dog and pony around... but we know that ain't gonna happen. These bozos in Washington DC are the most frustrating bunch of clowns I've ever seen my my short lifetime. I truly hate every single one of them! Both sides of the aisle!:willy:

[Bucketlist2012]

Mike --- I'd love to FIRE the entire team that drug your dog and pony around... but we know that ain't gonna happen. These bozos in Washington DC are the most frustrating bunch of clowns I've ever seen my my short lifetime. I truly hate every single one of them! Both sides of the aisle!:willy:

Animal abuse is what I call it....I almost called the Humane Society..:rofl:


They screw it up and then save the day....At the last dramatic second..:willy:

I was a Ron Paul guy, but even the GOP knew he would come in and clean house, so they kicked sand in his face....Too bad for us...

Yes, I am in for the long haul...No short term Trading... I look at the good days and just let the bad days ride...A crappy deal, but a deal ...

The Dog and Pony are resting now....The thing that I know is that they will all go to a 5 star restaurant on our dime and joke about it....Both parties together off Camera....Laughing at us:mad:

[toy71camaro]

Man.. what a day yesterday huh!?

Still waiting for my ABT split to take affect. I dont show the ABBV stock in my account to make up for the ABT stock splitting in half. So I show a big loss (relative to me, lol).

Hopefully in a day or two it shows up. :_paranoid

[GregWeld]

Man.. what a day yesterday huh!?

Still waiting for my ABT split to take affect. I dont show the ABBV stock in my account to make up for the ABT stock splitting in half. So I show a big loss (relative to me, lol).

Hopefully in a day or two it shows up. :_paranoid



You not only got a split -- they raised the dividend 6%.... what's not to like about that. I see they also received approval for the split off (AbbVie) to join the S&P 100 and 500 indexes. Usually that means that Mutual Funds and ETFs that mimic, or trade in, those indexes will buy those shares. That should be viewed as a positive.

[GregWeld]

Back to Investing 102 ---- today's action is why it's so hard to be OUT of the market waiting for something to happen. This is why I park cash in an investable spot rather than just sitting on cash.

I consider parking cash in ETF's such as JNK - HYG - NLY... where you get a pretty dang good dividend -- the share prices are "relatively" stable. I currently have quite a bit parked in JNK and NLY... and while NLY has been drifting lower (it's very interest rate sensitive).. overall when I see the dividends I've collected and the increase made on JNK has offset the loss I have in NLY... and overall that's the objective. I look at my account as a whole not as individual performance... and you MUST included the dividends in the calculations.

So just to show what I'm talking about....


I currently show (can't say HAVE because I haven't sold so just have a paper loss) a loss in NLY of $16,500 but consider the dividends -- I don't really have a loss.

I currently show a gain (again just paper gain) on JNK of $39,800

Just the gain in JNK cancels out the loss in NLY -- but lets consider the dividends collected:


10/29/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$17,500.00
07/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$19,250.00
04/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: ORD DIV - CASH
$13,750.00
01/26/2012 NLY ANNALY CAPITAL MGMT REIT
type: CASH DIV
$14,250.00


and JNK


12/11/2012 JNK SPDR BARCLAYS ETF HIGH YIELD VERY LIQUID
type: ORD DIV - CASH
$13,354.56
09/12/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$6,682.32
08/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,296.25
07/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,356.51
06/11/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,368.39
05/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,462.88
01/06/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: LT CAP GAIN
$1,320.39
01/06/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: CASH DIV
$1,093.49



Notice that as the "fiscal cliff" talks seemed to be falling on deaf ears - I increased my JNK holdings significantly... because I had cash on hand - took some year end LONG TERM capital gains (locking in the 15% rate)... so all in all these are making me money SO FAR. That can change in a heartbeat - but for now the strategy is working. IF -- BIG IF -- these clowns can get their act together -- I'll scale out of these and work towards normal company specific positions.



Since I posted this ----- we can change the numbers


Annaly Capital Management (NLY) is now UP $6033. In the Green


JNK is now positive $56,587


See what a couple of days can do?

[GregWeld]

I just sent an email to my bond broker and instructed to sell my entire muni bond portfolio. I think we are going to start to see interest rates rise. Houses are selling. Employment seems to be improving. And in order to make money you must be AHEAD of the game many months. If I wait to be certain it can make a giant difference. As low as rates are right now, a very small move up would mean a huge drop in bond values. Since I have a nice capital gain now. I'd prefer to lock that in. And if I'm right I want to have even more money in equities.

[bdahlg68]

I just sent an email to my bond broker and instructed to sell my entire muni bond portfolio. I think we are going to start to see interest rates rise. Houses are selling. Employment seems to be improving. And in order to make money you must be AHEAD of the game many months. If I wait to be certain it can make a giant difference. As low as rates are right now, a very small move up would mean a huge drop in bond values. Since I have a nice capital gain now. I'd prefer to lock that in. And if I'm right I want to have even more money in equities.

Will be interesting to see how NLY and the like mange the spread going forward if rates do in fact continue upward.

[GregWeld]

Will be interesting to see how NLY and the like mange the spread going forward if rates do in fact continue upward.

Well.... NLY has already cut it's dividend - and the share price is down a pretty good tick from it's highs a couple months ago.


That's why I've reminded folks that these are not the "buy and forget" kind of stocks ---- these are places to put money to work if you're sharp and keep an eye out for what's coming. You've got to be nimble in names like these. They're really not for Investing 102... or for IRA's and that sort of thing.

I've moved in and out of NLY several times in the last year... ditto JNK and HYG.... I purely use them to park money - pick up a dividend and wait for something else to come along.

[GregWeld]

Since people are asking about Annaly Capital Management (NLY) here's a Motley Fool report on them.

PLEASE NOTE THE FINAL COMMENT ---- This is an INCOME investment --- not a price appreciation investment. The income is currently sky high and as such has been great for people like me... but please understand what your individual situations are and what each stock does or doesn't do for you.




http://beta.fool.com/jordobivona/2013/01/07/how-will-annaly-mreit-dividends-react-fiscal-cliff/20301/

[glassman]

Greg, what's the difference between an income investment and a price appreciation investment?

Mike

[GregWeld]

Greg, what's the difference between an income investment and a price appreciation investment?

Mike



Income investment - let's say NLY - are bought because they spin off super sweet income in the form of dividends or interest... But you're not investing in them because you think the price per share is going very far.


A price appreciation investment would be where you expect (hope) that the share price is going to go higher. So I might buy a stock where I "only" get 3% dividend - but to offset that smallish dividend - I need the share price to appreciate to give me a "TOTAL RETURN". Dividend plus share price growth.

[GregWeld]

I had a funny thought this morning -- partly because of Mikes question about income vs appreciation... and partly because I got my Annaly Capital Management (NLY) dividend this morning.

Most of you guys own houses.... I think a "jumbo" mortgage is $417 grand in most states...

I have about that much invested in NLY ($437 grand) -- but instead of paying someone -- IT pays me... $12,891 per quarter or $51,564 per year.

That is INCOME investing... :D


Side note --- AT&T is trading "ex" dividend today - so part of the price drop this morning is "market" and part is the "ex" dividend trade.

[GregWeld]

Here's - to me at least - a CLASSIC example of using your own sense for investing.


If you drove down the major retail street in your home town -- which of those businesses would you likely "think" was doing well -- and which of those would be of the least interest to you. We've discussed this before... but todays news/articles just highlighted this for me once again.

This article about SEARS...

http://www.cnbc.com/id/100361253


The news is mostly uninteresting. BUT -- when I drill down on the article -- it shows a PER SHARE LOSS.... and when I couple that with something I would ask myself before investing ----- "WHEN WAS THE LAST TIME I WENT IN TO A SEARS STORE?" WHERE IS A SEARS STORE? vs - When was the last time I was in a Home Depot or Lowe's or name some other retailer...

Put a different way --- how many of you have had to "manage down" in your lifetimes? It's a difficult job to CUT expenses and cut everything to the bone... versus manage your finances etc when things are going GREAT. I just don't choose to invest in any company that is trying to manage DOWN. Why would you do that? What is it that you'd see that would say --- HEY! What a great investment!

Amazon is growing top line and growing it's business..... Sears is trying to manage it's loss of business and scale itself down to the shrinking customer base. Which one going forward is the better bet?

These are hypothetical questions by the way and not meant to be answered --- they're just meant to THINK ABOUT when investing. :cheers:

[GregWeld]

This brings to mind something that Gwen and I noticed this year....


Seems that 99 out of 100 Christmas cards we got this year were ordered/printed "electronically" -- rather than the store bought folding versions we used to get. Most of them had pictures of families on them and were single sided.

Got me thinking --- when was the last time I saw a "Hallmark" store? Did they make the transition to "on line"? Or are they a Kodak that didn't see the switch to electronic cameras from film.

Again - this is just the way I think when I choose investments. I use my own "sense" of how a business is going and or what it's competitors are doing.... THEN I start my research!

[GregWeld]

By the way -- just for the record.... I don't think ANY of you should probably be in Annaly Capital Management (NLY) unless you're just parking money temporarily or are just interested in the quarterly income.

We are going into a RISING interest rate market -- IMHO -- The FED has already told us that it's basing it's interest rate on the employment figures and even if you don't believe those figures THEY are still using them as a gauge. They seem to be getting "better" as does the economy.

Please be very careful about investing in things you don't understand - and or don't pay attention to. This is NOT a buy and hold investment... I use it as an example but it is NOT a recommendation (I don't recommend ANYTHING). And please don't feel comfortable with "Greg's in it" so it must be okay. My investing is COMPLETELY different than for most of you. I pay attention -- I have much more to risk - my numbers and your numbers are (I'm guessing) are completely unrealistic - and my investments are for MY purposes... and you need to tailor your investments for YOUR purposes. :thumbsup:

[sik68]

Thanks Greg. I heeded your warnings this past week on NLY. I realized it wasn't for me, and given that interest rates are being held down artifically by the fed, I felt like it is time to get out before the stampede. For 3 years now, it baffles me that people are continuing to get cheaper and cheaper loans...it makes no sense so I'm out.

As for paper Christmas cards, you're impression is totally right. E-cards are getting popular, and there's an equally popular counter-movement going on. High-end paper stationery is booming. Check out minted.com (shameless plug, ran by a friend), whose business is doing very well catering to those that appreciate the sentiment of receiving something physical. :thumbsup:

I got my IRA disbursement January 1st, putting me at 80% invested and 20% cash. Logic says to me that impending (imminent) rate hikes will damage the market, but I don't know if this is a 2013 issue or longer term. I am 80% confident the market will rise for a while, so being 80% in feels okay. I'm not out to time the market...but I do think there's a big trough coming when reality resets again.



Greg, what are your thoughts on being invested in general in 2013?

Thanks! :lateral:

[GregWeld]

Steven --

#1 -- in an IRA/ROTH type account I'd always be 100% invested -- since these type accounts are purely retirement and as such are super long term... there's no reason to not be 100% invested.

Remember that you don't just retire at 65 or whatever age - and suddenly withdraw all your money! You're going to take a small percentage of it out annually - for the next 20 or 30 years to retire on.... so you have to ADD that term to the term before you're even eligible to start withdrawals... for most here -- that's a very long time.


I really don't do annual look aheads to figure out where I should be - or not. I INVEST for far longer term than that. However, I live off my investments -- and keep cash in shares that create income - and deploy those funds from time to time if there's a big dip in the market etc - but they're ALWAYS "invested". I don't keep any cash in money market type accounts etc. They earn NOTHING. I'm not rich enough (or is that stupid enough? :D ) to want to only earn .25% on my money. Thus - I keep "cash" in NLY and JNK and HYG.... that money IS subject to capital depreciation - but I don't sell in down markets unless I thought the 'loss' in the current holding would more than be made up for in the new investment.... and even then I'd scale in and scale out.

Right now I have pretty large positions in NLY ($437K) and JNK ($2.5MM).... but that's because I took some nice long term capital gains leading up to the end of the year - and parked that money in those two names. So far - they've made me even more money - so for right now I'm happy just leaving it there.... but I'm VERY VERY watchful! If I sold now - I'd have SHORT TERM CAPITAL GAINS and I hate paying the gov 40%... but I also doubt I'll leave it in for the "year and one day" that it takes to get to the new 20% Long Term Capital Gains tax rate... so we'll just see what comes along that's interesting.

Personally I'd like to put another 1 or 2MM into apartments or commercial real estate. I like the long term prospects of low cost money and long term appreciation. But the bulk of my money is in equities. Always has been and always will be. Good market or bad.

[GregWeld]

I had a funny thought this morning -- partly because of Mikes question about income vs appreciation... and partly because I got my Annaly Capital Management (NLY) dividend this morning.

Most of you guys own houses.... I think a "jumbo" mortgage is $417 grand in most states...

I have about that much invested in NLY ($437 grand) -- but instead of paying someone -- IT pays me... $13,500 per quarter or $54,000 per year.

That is INCOME investing... :D


Side note --- AT&T is trading "ex" dividend today - so part of the price drop this morning is "market" and part is the "ex" dividend trade.



I went back and looked at the numbers and I'd posted them incorrectly -- the correct numbers are now in BOLD

[bdahlg68]

Ford gave out a 100% pay raise. Can't complain about that! I bought in at about $9.85, so the new dividend is about a 4% yield on my initial investment which is pretty darn good!

[GregWeld]

Ford gave out a 100% pay raise. Can't complain about that! I bought in at about $9.85, so the new dividend is about a 4% yield on my initial investment which is pretty darn good!



Don't ya just love it!!


Now -- my guess is that the shares will rise which will bring that % dividend down a little - but remember! What we L O V E is TOTAL RETURN.... and this is the way it gets done!


:cheers:

[avewhtboy]

I sold T pre ex div day and bought back $1 cheaper the next day :thumbsup:

Anyone interested in investing or even daytrading should check this out

www.daytradingradio.com

Just a fan no personal affiliation

[WSSix]

Finally bought my next round of stocks today. Now it's just a matter of watching what happens with them throughout the year. Here's hoping they grow as well as pay me a dividend.

[GregWeld]

I sold T pre ex div day and bought back $1 cheaper the next day :thumbsup:

Anyone interested in investing or even daytrading should check this out

www.daytradingradio.com

Just a fan no personal affiliation

Investing and day trading shouldn't be used in the same sentence.

[avewhtboy]

Investing and day trading shouldn't be used in the same sentence.


Maybe so but I am firm believer in being an active investor, meaning follow your investments diligently, which can lead to daytrading...

[GregWeld]

Maybe so but I am firm believer in being an active investor, meaning follow your investments diligently, which can lead to daytrading...




No. Sorry, it doesn't. If that's what you think is investing then you just don't know anything about investing.

[GregWeld]

I loved Art Cashen's statement this morning about INFLATION:

He says that banks have enormous balance sheets because they aren't lending... and if they aren't lending people and businesses aren't spending if people and businesses aren't spending then that's why we don't have any inflation!


When you think about your house going sky high a few years ago - it was why? Because the easy money let everybody buy a house -- and they went thru the roof price wise... there was no value there - it was just pure inflationary pressures.

Individuals REPAIR their own balance sheets by NOT spending, saving more, investing... growing their top line (income) and trimming expenses. While it might not "FEEL" as good as the paper gain of their house going up 100K a year.. in the long run it's far more healthy. Saving and investing is REAL cash -- paper is just that -- paper.

[avewhtboy]

No. Sorry, it doesn't. If that's what you think is investing then you just don't know anything about investing.

Full time daytrader for 10 years, so I may know something, not everything...

[GregWeld]

Interesting data (evidence?) that there was some money sitting on the sidelines waiting to be invested.

+++++++++++

Equity funds have this week seen the strongest inflows for more than five years as global shares surged and a compromise deal on the US fiscal cliff boosted investor confidence.

Net inflows into equity funds monitored by data provider EPFR hit $22.2 billion in the week to January 9th – the highest since September 2007 and the second highest since comparable data began in 1996. Emerging market and world funds, which had record inflows, drove much of the expansion.



+++++++++++++



We've discussed before -- that like anything - in order to go UP we have to have more buyers than sellers... and when new money floods the market - they're buying. We'll see how long and how much... :D

[Bucketlist2012]

I just sent an email to my bond broker and instructed to sell my entire muni bond portfolio. I think we are going to start to see interest rates rise. Houses are selling. Employment seems to be improving. And in order to make money you must be AHEAD of the game many months. If I wait to be certain it can make a giant difference. As low as rates are right now, a very small move up would mean a huge drop in bond values. Since I have a nice capital gain now. I'd prefer to lock that in. And if I'm right I want to have even more money in equities.

Greg, I did something just like that...Due to the conditions , I am decreasing my Bond exposure and increasing my Dividend Stock exposure.

Also I am selling off some of my "Insurance",Precious Metals, and going into Dividend Stocks.

I feel the Interest rates are going to rise and hammer Bonds, and i feel that I have got all the gains I can out of my Precious Metals.

Normal Investing would say own more Bonds the older you get, and it seems counter intuitive to go heavier Stocks, but with the present conditions and Politics, I am decreasing my Bonds and Precious Metals and increasing my Dividend stocks...

Mike:cheers:

[GregWeld]

Smart move. If the economy is going to come around - which I think it is.... and houses are selling again... rates are going to rise from here.

Now for those that don't understand BONDS. People buy BONDS because you get 100% of their capital back upon maturity. That is - if you buy a 5 year bond - you'd get semi annual interest payments (NOT dividends!) each year and then at maturity you'll get all your cash back.

Okay - so big deal!? Right!? Well.... the catch is that if bond yields (interest rates) RISE -- then the VALUE of your bond declines until it's STATED yield meets what someone could get by buying a new bond at current rates. Not a big deal IF -- BIG IF -- You're holding until maturity... but then let's say you have a 5 year bond @ 4% -- FIVE YEARS is a long time.... and it's ONLY going to pay 4%. Period. If I want to earn more money for the next 4 years... I have to sell that bond at a loss of face value... or I have to accept a sub par interest rate.

Right now -- I owned bonds that paid above market rates -- therefore they were worth MORE than face value... so if you think rates are going to go up -- then not only would I lose the CAPITAL GAIN from the sale by holding to maturity -- I'd have below rate interest rate income as well and if I wanted to change that anytime before maturity I'd take a loss. So why not sell now - capture the capital gain --- and invest in something that is a little better going forward. Perhaps.

I hope that makes some sense.

[GregWeld]

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013/01/15/wal-mart-says-to-buy-more-us-goods-hire-veterans/

[Sieg]

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013/01/15/wal-mart-says-to-buy-more-us-goods-hire-veterans/

It will be interesting to see how this plays out. :thumbsup:

Wonder it there are enough "qualified" candidates to form a nationwide school security program?

[toy71camaro]

Now here's a TREND we need to see more of!!


http://www.foxbusiness.com/news/2013/01/15/wal-mart-says-to-buy-more-us-goods-hire-veterans/

Thats a great trend for the US economy on two fronts (more US sales, and more US jobs)... but how does that relate to the WMT stock holder?

My initial thoughts is that it would/could bring down some of their profit margin (made in the US = more expensive) and more jobs = less bottom line.

Although, its great publicity. lol. How would you play this? I certainly dont think its a game changer on either front (buy/sell), and neither have anything to do with investing 102 (long term hold). But just curious.

**I do not own any positions in WMT and do not plan to within the next 72 hours.** heheh

[GregWeld]

Thats a great trend for the US economy on two fronts (more US sales, and more US jobs)... but how does that relate to the WMT stock holder?

My initial thoughts is that it would/could bring down some of their profit margin (made in the US = more expensive) and more jobs = less bottom line.

Although, its great publicity. lol. How would you play this? I certainly dont think its a game changer on either front (buy/sell), and neither have anything to do with investing 102 (long term hold). But just curious.

**I do not own any positions in WMT and do not plan to within the next 72 hours.** heheh



Nice caveat there!


I personally HATE Wal Mart (WMT) --- I wouldn't shop there if the crap was free... IMHO they represent all that is wrong in America. They killed good factory jobs in the USA many years ago by shopping their inventory offshore... and the very people they sold that cheap crap too were the ones they were putting out of work. The more they bought - the more factories closed. Remember when you bought a toaster made in the US? That was made by low skilled under educated US middle america....

So now that's how I feel about Wal Mart ----- I don't really like their retail model -- high volume low margin. I'd buy COSTCO over Wal Mart if I wanted that retail exposure.... And I don't think this "move" will do anything -- near term -- but long term -- it can help AMERICAN jobs -- and if they're successful with the products and price points OTHERS will copy ---- and then that's not really a Wal Mart share booster -- but it's a booster for all of America. And that's ALWAYS good for the stock market.


:cheers:

[toy71camaro]

I hate walmart too.. i do get some stuff there when i have too though.

LOVE Costco tho. If i had to pick one of the two to invest with, costco would be my personal choice. :cheers:

[sik68]

I know it's best to think of each invested dollar as an 'employee', out to work for you and make a solid return. Going along with the metaphor, do you ever get the urge to get some "spare" employees together for a skunkworks operation (aka, speculation)?

The fledgling 3D printing industry is fascinating; the big players like 3D Systems (DDD) and Stratasys (SSYS) could take off in a big way. I know on this forum the guys are drooling for a 3D printing machine in their garage (ahem, make some floorspace GW). But it's not just about hobbyists; on a more macro-demand level, I see EVERY medium to large company that manufacturers products wanting one.

One thing is for sure is that it will be bigger than it already is....

Have I been drinking the Koolaid (KRFT), or is there good sense in hopping on uncharted territory (that I believe in) with a 1% investment?

[GregWeld]

I know it's best to think of each invested dollar as an 'employee', out to work for you and make a solid return. Going along with the metaphor, do you ever get the urge to get some "spare" employees together for a skunkworks operation (aka, speculation)?

The fledgling 3D printing industry is fascinating; the big players like 3D Systems (DDD) and Stratasys (SSYS) could take off in a big way. I know on this forum the guys are drooling for a 3D printing machine in their garage (ahem, make some floorspace GW). But it's not just about hobbyists; on a more macro-demand level, I see EVERY medium to large company that manufacturers products wanting one.

One thing is for sure is that it will be bigger than it already is....

Have I been drinking the Koolaid, or is there good sense in hopping on uncharted territory (that I believe in) with a 1% investment?



The 20MM I made in 2010 -- was made on a 385K purely speculative "investment".


I also LOST 500K in another purely speculative investment made around the same time frame (about 6 years prior to 2010 -- both were made at around the same time).


So it's worth repeating ---- NEVER "invest" with money you can't truly afford to loose... because you will loose it. The idea you're investing in might be a solid as they can get --- but the "investor group" runs out of interest about 6 months early and pulls the plug.... or people quit.... or people die... or get divorced... or the list goes on as long as you have lead to keep writing!

BUT --- OBVIOUSLY people CAN and DO make money on these kinds of investments so I'm not a guy that would ever tell you "NO". I'm a guy that's going to tell you to make sure you have all your other ducks in a row before you GAMBLE -- because that's what this kind of investing is. Perfectly acceptable if you're a big boy and can take the hit if it comes to that.


Great question by the way!!

[GregWeld]

I will add to my above comment ---

Because re-reading your question -- I think you're asking about an investment in corporations that already exist and that maybe haven't shown the growth yet?? Such as the 3D printer business.

SO if it's publicly traded already -- that's different -- then sure -- if you think it's a growth industry and want to speculate with even as much as 5% -- do it.
Keep 80 or 90% of your money in "the right stuff"... That's why the 5% rule -- anyone can afford to have 5% go to zero - or not perform and they should be fine.

If you're talking about a "start up" -- like I was referring to above post... then that's a really different kind of deal because those are loose 9 out of 10 or maybe more like loose 18 out of 20 investments. Really... better left to "big money" guys... but like I said -- can't kill ya either if that's what you think is worth the gamble. Just keep it "affordable".

[sik68]

Tanks for the perspective GW!

[GregWeld]

Tanks for the perspective GW!



Welcome! Just like to toss a caveat in here while I can.

Please remember that what I'm trying to RESPOND to is a WAY TO THINK... not THE WAY to do. I'm just trying to give you some food for thought. What you all do - what you all invest in - etc is entirely up to you.

In investing - there are no absolutes. You just do the very best you can at that time with the information available to you at that time.

If you have cash 'parked' -- you can't just forget about it. If you invest in something - you need to review each and every investment to make sure that investment is doing what you thought it should do. (employees sometime s don't work out - they need retraining! Don't let them go on permanent vacation! :warning: )

[GregWeld]

We have discussed Kinder Morgan Partners (KMP) a lot on this thread.... again -- caveat - it's not right for everyone and isn't a RECOMMENDATION -- it's been a very good EXAMPLE.


I love when the companies I invest in give me a raise!!! And when you choose good investments -- THIS is the kind of report you want to read!


Pipeline master limited partnership Kinder Morgan (KMP) reported strong fourth quarter results Wednesday afternoon. Revenue surged 31% year-over-year to $2.5 billion, exceeding consensus estimates. Operating earnings per share grew 74% year-over-year to $0.61, also ahead of expectations. Distributable cash flow per share increased 6% year-over-year, to $1.35, more than covering the firm's payout during the fourth quarter. This led the company to raise its fourth quarter distribution to $1.29 per share (payable February 14, 2013), three cents higher than the previous payout. The firm's full-year distributable cash flow of $5.07 per share was significantly higher than in 2011, but more importantly, it easily covered distribution payments of $4.98 per share.

[WSSix]

Sweet! I get back from a week of blowing stuff up to find out I also got a raise on one of my stocks. That's news I can come home to

[Bucketlist2012]

Last week was a good week...You need to be Invested to capitalize on times like that...That is why you cannot try to time things..

Oh and i just got back from Celebrating the Inauguration in D.C. :confused59: :lostmarbles:

Just Kidding....I just wanted to jerk some chains....:relax: :poke:

[GregWeld]

Last week was a good week...You need to be Invested to capitalize on times like that...That is why you cannot try to time things..

Oh and i just got back from Celebrating the Inauguration in D.C. :confused59: :lostmarbles:

Just Kidding....I just wanted to jerk some chains....:relax: :poke:



Exactly!


Did you take plenty of ammo to DC?? :bitchslap:

[WSSix]

Yep! I stopped by and checked on my stocks and liked what I saw. Every stock is currently on an up swing and the new purchases have put me in the positive for the entire account. Diversification works :D

[Bucketlist2012]

[QUOTE=GregWeld;459618]Exactly!


Did you take plenty of ammo to DC?? :bitchslap:[/QUOTE

:guns: :guns:

:lol: The TSA wouldn't let me.... Just Kidding, worked around the house and on the car.:relax:

I didn't even turn the TV on today....

Loving the new Icons...:thankyou:

[toy71camaro]

What's a TV? heh


Well, on a good note, I go sign papers today to get the house. Should close tomorrow or thursday. :D :D

But, that also means my investing 102 (new money) gets put on the back burner for a bit while I build up my savings and what not again. lol. Sure will be nice to back in MY OWN home again. And back within walking distance of my parents and sister and GF's parents (rather than a 20 minute drive).

But, my investing 102 account is nearly all green again. So thats doing well. Although, I'd rather it be down... until the week before I start retirement. :lol:

[GregWeld]

That's awesome news Albert! Congratulations!!


Buying a home is allowed in 102. And buying NOW with low prices and low interest rate is smart and a good use of your savings. We just bought this place in Sun Valley (I'm here now for the first time) -- we bought by accident and weren't planning on buying here - but a place came up for sale - it's half the price it used to be - and the interest rate is ridiculously low. TIME TO POUNCE! Done!

[toy71camaro]

Yeah.. it sure is awesome getting a sub 4% interest rate. LOL.

The price we're paying for this house (monthly) was the same it was to rent in the area. Which we were planning on doing if we didnt find a house soon.

Good news its, its got rear/back yard access, and enough room to build a decent 2 car metal shop... Now to only save up enough coin to afford to have it put in. Then i'll be in heaven. LOL. (probably about $6-8k).

[Bucketlist2012]

Congrats Albert..

Yes Owning a home is part of Investing 102.. And the time is now...

The rates are crazy low....You tell someone 80 years old your Interest rate and watch them smile ear to ear... They know it is historically Low...

[Sieg]

Here's an article on dividend investing that worth the read IMO:

http://seekingalpha.com/article/1124931-rising-dividends-my-dividend-growth-portfolio-2012-2013-report

[toy71camaro]

^^^ Good article. I like his writing. I've read a lot of his stuff on SA over the last year. :)

[bdahlg68]

AAPL.... Doh!
Bought some at 485 a bit ago and thought I was a genius!

[XLexusTech]

AAPL.... Doh!
Bought some at 485 a bit ago and thought I was a genius!
what do you think it will drop too? Overnight it was 465 I think

[Sieg]

what do you think it will drop too? Overnight it was 465 I think
Squawk just said it opened at $458

[GregWeld]

I'm not trying to say I'm a genius here... I'm trying to say that I've lived all this and I'm trying to help you all understand the "issues" --- using my experiences both bad and good....

RE: APPLE



Go back and read my "priced for perfection" warnings....



This is exactly what happens when stocks have run up HUGE.... expectations are for even more "hugeness".... and then they hiccup.

The market is about perceptions - expectations - and performance. Miss one of these and you get absolutely hammered.


BUT -- Always the big butt! It could have just as easily run the other way --- blown out sales numbers - or blow out profits -- and it JUMPS $75 in a day... then you're kicking yourself for having "missed" this.


This is EXACTLY why I have quit trying to play that game -- and I just buy stuff that pays me a nice dividend -- doesn't move huge one way or the other -- and I go to bed at peace and wake up rested. The other stuff is too much heartache and too gut wrenching. I'm old - I can't take it anymore -- plus... it's just not fun when it goes against you.

[toy71camaro]

^^^ I was waiting for the reply. LOL The whole time I've seen it sinking (since the $700 mark) I've had that in the back of my head.. "priced to perfection"... and i had a feeling they were on a downward slope. I mentioned back when we were talking about that I was considering switching to an Android cuz I've just got tired of Apples stuff. <-- that fell into the investing 102 theory that we've talked about. I am a "buyer" of that product, and when I feel I am no longer wanting to be a buyer, I wouldn't want to be an investor either. <the old drive by lowes, if the parking lot is always empty, store is always empty, somethings up>

[XLexusTech]

IN @ 445... you make all your scratch on the buy baby.. BTW my "facey book" is kicking butt..

BPT however.. is out...

JNJ.. is the think that keeping me in balance...

[WSSix]

Heard an interview snipet on the radio about Apple from an investment expert. She said the same thing really. All I could think about was, "Yeah, I know a guy who said the same thing a long time ago"

[WSSix]

Looked in on my Fidelity account which is my company matched 401k and Employee Stock Purchase Program stock as well. Both are doing well especially the ESPP. That one alone is up 54% since I started a year and a half ago. Sure, that includes the gains from the discounted price I bought the stock at but it's still a gain. The 401k is difficult for me to know percentages since I get a good company match. It does show what I put in and what the company puts in though and those numbers make me happy :D :G-Dub:

ESPP's are worth it!

[Flash68]

:G-Dub:

That is all.

[GregWeld]

Looked in on my Fidelity account which is my company matched 401k and Employee Stock Purchase Program stock as well. Both are doing well especially the ESPP. That one alone is up 54% since I started a year and a half ago. Sure, that includes the gains from the discounted price I bought the stock at but it's still a gain. The 401k is difficult for me to know percentages since I get a good company match. It does show what I put in and what the company puts in though and those numbers make me happy :D :G-Dub:

ESPP's are worth it!



YES THEY ARE --- they're free money! Take advantage of them!:thumbsup: :D

[hifi875]

got my year end report for my sep/401k, made 11.75% return last year. not bad considering the roller coster of a year.

[Bucketlist2012]

I know this is Investing 102 , so some of what I mention is actually Investing 101.

But everyone should be in their Companies Employer Matched funds if they are available..

When I worked , my company matched 10% and they also had a profit sharing program...

FREE Money. Plus I had them taking out 15%...Over a long period of time ??:G-Dub:

Add to that having no consumer debt like Revolving Credit Card balances, or Car loans.

Then add to that a mid 3% Mortgage on a home you can afford ?

Then live within your means and have Investments on your own ? :G-Dub:

Of course a high paying Job would be nice but not needed.

I may not be rich, but I am comfortable..