Investing 102

[GregWeld]

So here I am -- even on Xmas Eve - reading finance stuff.... and watching TV with the other eye -- and trying to keep Stella off my computer...



So... many times you've heard me state that money competes -- and asset classes compete for money -- and the same money moves around always in competition for trying to make the money "work". Gotta keep them employees cranking day and night, right?!?! No days off! No slackers! Some need retraining... some are doing fine - some are stellar...


This "comment" made me laugh --- because it's absolutely true!


"It has become clearer that 2013 for the U.S. equity markets was all about where can I place my money to make a decent return, and I think a lot of people ended up chasing the market and pushing it higher. It was the least worst house on a bad block," said Robert Pavlik, chief market strategist at Banyan Partners, contrasting the U.S. market to those in Asia, Europe and emerging markets.

"And, when interest rates started to tick up on Treasuries, equities seemed like the only game in town. That and the fact that the Fed continues to print money and provide a low cost of capital environment for corporate America," Pavlik added.




Money CHASES "return" ---- and that's what I've been saying about watching rising interest rates - because there's a "place" where rates on "X" will be good enough for people to sell "Y" and buy "X" and that's what you need to be heads up about. I don't know what that looks like -- but the "SMART MONEY" will chase returns. They have computer programs that do all the calculations -- and there's an axis point that causes the money to move from one type of asset to another -- with taxes etc factored in.

The thing is -- we look at TOTAL RETURN -- well --- okay -- but total return has to be GROWTH in our share price AND a dividend. Typically the lowest total return stocks will get hit first... because the "smart money" moves out to raise capital -- and then they buy whatever is the next thing. But then what happens is -- as the share prices go down --- what happens to the dividend??? The dividend is paid as a dollar amount -- it is NOT paid as a percentage.... so as the share price drops -- the PERCENTAGE that dividend represents goes UP... Making competition for the next new thing that WAS higher...

So guys like me BUY MORE when the price goes down -- we're not first on the spot -- ya got to pick your spots -- but you build a cash position and you take the opportunity when presented. So it looks like this ---- Let's just say Coke (KO) at current price pays 3% === and the price drops per share 10% --- now that dividend is 4% !! And so on.



To calculate the percentage of dividend a stock pays -- you divided the ANNUAL DIVIDEND by the current share price.


$1.00 annual dividend / share price of $10.00 = 10%

So if the share price dropped 10% to $9.00

$1.00 annual dividend / share price of $9.00 = 11%


Of course what TIME gives us is that perhaps you bought a year ago and the shares have already gained 10% in price -- so a small drop doesn't mean much -- it's still paying that dividend.... but if it drops 10 or 15% below your original cost - that's when you want to start to look at buying some more of it. You don't double down -- you just chip away. All the time making a BETTER % dividend on your new purchases.

[SSLance]

I had a much better feeling about Twitter's market than Facebook. But I didnt have the capital to gamble with. lol. I think twitter has a lot more "business" wise than most people realize. I've just started getting a presence on there as part of my Life Coach recommendations and the future of "social currency".


For the life of me, I can NOT figure out how these companies like facebook and twitter make the money that they do...

Granted, I run ad blockers on all of my PCs so I never see any pop up ads, and I don't facebook at all...but aren't both facebook and twitter free to use?

Where does all of the money come from?

[toy71camaro]

For the life of me, I can NOT figure out how these companies like facebook and twitter make the money that they do...

Granted, I run ad blockers on all of my PCs so I never see any pop up ads, and I don't facebook at all...but aren't both facebook and twitter free to use?

Where does all of the money come from?

There free to use, but they are a marketers dream. Companies pay money to place "posts" in YOUR news feed. Whether its twitter or facebook, doesnt really matter. They're just different styles of overall the same thing. Its the next age of "TV" commercials...

Reading a recent book about this, and this is how they broke it down....

Say your a company selling "widgets". And, you want to get your widgets out in the market. You spend $50k on making a commercial, you then spend $20k-$500k on getting that commercial on the air. The higher profile the "show" is that its placed on, the higher the cost (see super bowl = millions per commercial spot?). So, that Advert cost you $100k. Did it work? Dont know. Cant really confirm how many people seen it. How many of your target (say its a product geared towards 20-40year old females). Did sales go up? sure. But was it the Ad or coincidence? not really sure. So, whats next? another 100k for another commercial... VERY Expensive. Not sure how productive it is. And who even watches commercials anymore?

Now, take facebook/twitter. I create a Post/Article/Video, whatever you want to call it. FREE (essentially). I can make that Post for free. If its a "good" post, then people will engage with it (like it, share it, comment, etc). Facebook even tells you when you've got a "good" post and suggests you "boost" it (Pay money to reach a higher number of people). Now, when I boost a post on there I can be VERY specific at WHO sees my post. i can spend $500 and specifically reach 2 million 20-40yr old females in the lower 48 that would specifically be interested in my widget (just random figures here). I can also see a lot more info, like what time of day are best to post this, etc. You cant get that sort of reach with radio, TV, etc. Its a marketers dream. And businesses are realizing its money WELL spent. Which means profits up the wazoo for Faceybook and Twittster.

If you're selling something, where would you want to spend your advertising dollars?

[GregWeld]

Lance ---


Some of these companies like Twitter are very UNPROFITABLE... Twitter posted a loss of MINUS 38% operating margin...


But there's 500 MILLION TWEETS PER DAY.... of course part of the loss is that they need complex back end solutions to handle that volume (part of how I made a small fortune in 2010 was owning part of a company that provides solutions like they need).... and staffing ramp up. That has to come FIRST so for a while - they are losers..... but still have an immense audience of eyeballs -- and advertisers willing to pay for this MOBILE eyeball experience. The HOPE and GAMBLE is that they'll be able to monetize this at some point and become the next Google etc. They SHOULD have big margins if they can get people to pay for the access to eyeballs.


SOMETIMES the stock price is WAY WAY WAY ahead of the actual facts ---- thus anyone that's early is just gambling - which is what a buy of TWITTER (TWTR) is... but I'm okay with gambling a bit (I can afford to) and playing just a bit to see what the outcome is going to be.

I once had 750 "options" on Microsoft in 1986 at a cost basis of $32.25 per share --- at the time - the market was under $30.00 and I used to make fun of that at the time. That GREW just a bit --- as it turned into 216,000 shares at a cost of .11 cents per share... So sometimes a guy can hit a double or a triple or a 10 bagger. And that's what people BET on.

I don't think this is where people should INVEST -- as many of these run up and then blow up. These are gambling money plays and should be viewed as such. I just thought it would be "fun" to post about it here and I'll live or die in front of everyone here. UGH....

[glassman]

Man, some good stuff here the last couple of days.

Merry Christmas my fellow investors.....Cheers

[CRCRFT78]

So Christmas is here and I was wondering what to do with the kids gifts (money). I have 4 kids ranging in age between 2-11. I would like to teach them to save & invest at an early age to prepare them for their future and was looking for some opinions on options. I was thinking 4 investment accounts with Schwab with regular contributions for them. Should I invest in the same stocks for each or different holdings per account. I thought an investment account was a good idea so that they can use them for their own individual needs later on in life. Whether it be college, homes, weddings, etc. I would like some provisions so that they just couldn't go out and blow the money once they turn 18.

Any suggestions, what have some of you set up for your children? Any good books I can give to my kids to read on investing and saving?

[bdahlg68]

Do some research on 529's. They are great for college and if you save the history you can show how money grows in the market and just how important saving is. The money stays yours in case they get a scholarship because you don't need a college kid with some large sum of money to blow. They are different by state. Michigan's is good and I think Colorado as well. Otherwise I would say start gifting money but I don't think that's a good plan unless you are certain about responsibility and mega rich. Just my opinion though. Looking forward to others but that's what I'm doing for my 2.5 yr old.

[WSSix]

Utah's 529 is/was the best in the nation. I'd definitely research the different plans including your state's plan. You may get a tax break staying within state.

The other thing to keep in mind is that no one but you is going to pay for your retirement. Make sure you're setup first before you set them up for college. They will have many options available to themselves to pay for college.

[GregWeld]

First off -- the advice to take care of your retirement first - is really good advice... and that's mostly because of that old father time issue... the kids have 10 or 12 years before heading off to college - and retirement has a longer horizon (I'm guessing here) and lasts far longer.

Secondly -- While it's a nice thought to save for two college degrees - it's impossible for an ordinary person to do so. My own first hand experience tells me that. It's about 30 to 40 GRAND per year for all the tuition and books - and living expenses and travel costs..... PER KID. So you'd need 300 GRAND saved in the next 10 or 12 years... That's 25 GRAND saved per year beginning today. Depressing I know.

In state schools are less... Mine went out of state - why? Because the in state schools didn't accept them. Why? Because they're busy accepting out of state students that pay double or triple the tuition. Of all the parents I know - one kid went in state.

So here's where I'd be using the savings teaching.... Which is how we did it. I always taught them that it was okay to spend part of the dough -- as long as they saved at least half of it. It's kind of a reward for savings - that they also get to have some fun along the way. No different than the rest of us. It's human nature. We NEED to have our car parts etc -- but we also recognize the need to save/invest. So depending on how old the they are - you can also begging to teach them about investing. I started that when they were in high school.

I'd bought Apple (AAPL) stock for Alex -- 25 shares @ $85.00... by the time he finished college it was in the 300's... he was really interested in the market by then!!

I had set up accounts -- for each child... but before they turned 18 - I closed them and sucked the money back into my own accounts. That way they had no control over it. It was going to be ME paying for their college regardless... so the separate accounts were just used to show them about investing. When Alex graduated and remembered that "he" had 25 shares of Apple... he then wanted the money! After all -- it was "his". I just looked at him (as fathers do) and said -- Really? Well -- I'll give you that dough just as soon as you pay me back for your college expense. I mention this episode because that's what happens when you "give them" something. They can add - but they can't subtract.

If I was to do it over again --- I'd have pooled the money... so it "looks like" more to them. And it would have bought more of "X" investment.. and I'd have made sure they were donating half of everything they got to it. Some parents choose to incentivize by "matching" dollar for dollar anything the child saves. Sadly though - there's not much employment opportunity anymore for high school kids like there was when I grew up. We could work at any fast food joint - the car wash - the gas station etc. NOW? No way. Alex did yard work at an apartment complex I own (he worked for the management company so THEY were the boss not me).

An interesting side note there on INFLATION. Alex made $12 an hour. A friend said -- wow -- he can't even afford gas! To which I said -- well... When I was his age I made $1 an hour -- gas was .25 a gallon so I could buy 4 gallons of gas for an hours work. Alex makes $12 an hour and gas is $3 a gallon... so he can buy 4 gallons of gas for an hours worth of work.

What we all know really happens (THEN AND NOW) is that "stuff" goes UP faster than our wages -- so if a guy was making $12 an hour... and gas shoots up over $4 a gallon.... now that's inflation.

By the way..... We chose to send our kids to private Catholic school... so we've spent one hell of a lot of money on our kids education. If I'd have saved all that money - including the college tuition... and invested if for them instead. They'd never have to work a day in their lives.... Kidding here. But it's not far off the truth.

[GregWeld]

An interesting article - remember - articles are just opinions and should be used for information and "thought process" -- as the writer is no fortune teller.. in SeekingAlpha today about how Dividends help in a good market or bad. This has been the realization that took me about 23 years to come to grips with.... but the point of the article is that in a down market the dividends keep paying you something -- whereas the "growth only" strategy of investing pays you ZERO. They included a chart showing the past 8 DECADES for the S&P (a basket of stocks) showing that of the last 8 decades in 4 of them the dividend contributed more than the growth... think about that --- 4 decades --- decades are TEN YEAR periods. That's a long time. Now --- if you happen to hit retirement age during a down market (bear market) period -- some of these bear markets can carry of for quite some time! And in the meantime -- you're still depending on the cash flow from your investments to pay your bills. Thus -- I L O V E the dividend wether it's "trendy" investing or not.


OBVIOUSLY WHAT WE WANT IS TOTAL RETURN -- GROWTH and the INCOME (Dividend) -- that's a WINNING strategy!!






http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/saupload_Total-Return-of-SP500-from-1930-to-2012.png (http://s919.photobucket.com/user/gregweld/media/Fun%20Fotos/saupload_Total-Return-of-SP500-from-1930-to-2012.png.html)

[GregWeld]

And for those that need further PROOF of the dividend REINVESTMENT strategy.... check out this chart. $100 invested in 1987 --- with and without the dividend reinvested. I'll take the reinvestment strategy!!!


SEE THOSE NASTY DIPS IN THE CHART --- turns out they didn't matter all that much did they.






http://i919.photobucket.com/albums/ad33/gregweld/Fun%20Fotos/saupload_Reinvestment-of-Dividends-Strategy-2.png (http://s919.photobucket.com/user/gregweld/media/Fun%20Fotos/saupload_Reinvestment-of-Dividends-Strategy-2.png.html)

[GregWeld]

So here's the FUNNY PART about the dividend strategy....


I had a question about retirement savings the other day. Wether to invest in RISK assets for growth or "what". My advice was to invest in a higher paying dividend name -- with growth -- and let the compounding take hold.

The above chart kind of shows that the "growth only" method is pretty risky! Even though the S&P 500 is not considered risky - I would consider it risky since you'd be relying on the growth component only.... and you'd have made 75% more on your investment simply by reinvesting the dividends! That's damn near a double just for checking a simple box 'reinvest the dividend'.

[toy71camaro]

Great re-affirming Posts Greg. Hope you had a lovely Christmas with the Fam and the kids were able to come home and enjoy it with you too.

Looking back over the last 2 years since I've started my "dividend" (or, as i like to call it, Investment 102 strategy, heh) I can see how well its taken hold and grown in my accounts. Granted, the past two years have been great in the market, but it just proves to me that its the right thing.

When i look at my 401k, which i've had for a little over 10 years and i see these numbers, I'm happy (note, i completely re-structed/allocated my 401k in Feb of 2013):

2003: 32% Rate of return (note, this is when i opened my account at this employer and rolled in my previous 401k. so not sure how accurate that really is) Dow had a 25.32% return. S&P had a 26.38 return
2004: Me: 12.95%. Dow: 3.15. S&P: 8.99
2005: Me: 4.72. Dow: -.61. S&P: 3.00
2006: Me: 17.53. Dow: 16.29. S&P: 13.62
2007: Me: 5.71. Dow: 6.43. S&P: 3.53
2008: Me: -36.31. Dow: -33.84. S&P: -38.49
2009: Me: 28.42. Dow: 18.82. S&P: 23.45
2010: Me: 12.41. Dow: 11.02. S&P: 12.78
2011: Me: -8.09. Dow: 5.53. S&P: 0.00 (I stopped contributing in this year, due to various reasons. (no employer match, started my ROTH instead)
2012: Me: 12.37. Dow: 7.26. S&P: 13.41
2013: 25.08. Dow: 25.32. S&P: 28.93

Which puts me at a 6.59% rate of return total since i opened the account in 2003 and contributed (with company match) up until sometime in 2011 (i think company match stopped in 2010 tho).

Those arent great numbers (well, a couple of them were much higher than i ever thought before i just looked those up). But, I'm much happier with the 2013 than the rest, as at that point i KNOW what i'm looking at, i'm getting a Dividend on most the funds i've invested in as well. and I've seen my overall balance grow much more than what i could have put into it.

[GregWeld]

Tomorrow I'll sell half the Twitter (TWTR) I bought....


Remember the old adage -- pigs get fat - hogs get slaughtered? I'm a pig... the shares are up 50 Grand on my 100 Grand purchase -- I refuse to call it an "investment" as it wasn't and isn't.... it was pure gambling -- I've won pretty good so far - and I'm way way way ahead of where I thought it would be -- and I was only going to buy 1000 shares to begin with!

I hate short term gains -- as this will be taxed at 40%.... but like I always say --- they get their percentage -- I keep the rest. I'd far prefer to pay taxes than try to generate losses.... That's just a stupid suckers "big talk" strategy. Big talkers want you to think that they make so friggin' much money that "they have to make some losses so they can skin the guberment".... That is just pure BS. The goal should always be to make the most money possible.

We're not talking about end of the year tax strategy here -- that's a different strategy where you have huge gains - you feel you need or have taken some -- and now you have the possibility of REDUCING that gain by selling some losers that you were planning on selling anyway. If you sell the losers the same year as the big gainers -- then that's SMART -- rather than taking all the gains and then the following year selling the losers and getting nothing for your effort. Don't confuse the two - they're entirely different.

[GregWeld]

Recently I've been asked a lot of questions about the Do It Yourself style versus the "Pro" managed accounts... and this got me thinking. That's usually never a good thing -- but I get asked this question A LOT. So let's see if I can put this in to an Investing 102 style thought process.

I think that most people are AFRAID of money. I have no idea why that is... we'll take apart engines with zillions of pieces - hell - we'll take apart entire cars without giving it a thought... but manage our own money?! Are you crazy?!?!

Why? Because we don't know anything about "money" except that we need it.

Okay - so we turn it over to someone that does.

How many of you have read a thread about "the shop" or "the guy" that took their money and did a crap job - or never finished it - or it was 3 times more expensive than quoted? YEP -- a nice showing of hands.

Okay --- what's the difference between that -- and handing over your retirement savings (far more important than any old car!) to a "shop" or "guy" that is supposed to do a good job for you? Never thought about it that way did ya? Every "shop" (money firm) should just be equal and make you rich without you ever having to do a thing.... Right now I wish I knew how to insert that big LOSER BUZZER!!

The "PRO" has some training... in the shop and in the money firm... how much - who taught the class - were they the A student or did they just attend and got a passing grade. The Roadster Shop is a "shop" -- so was Frank's "Prodigy" one is an epic fail. The other turns out some stellar stuff. Do you think "money shops" might just be the same way?

So -- just like building a small block chevy --- there's about a half a zillion parts and pieces you can assemble to build a motor. But if you've learned ANYTHING about motors -- you know there's "parts" and there's COMBINATIONS that make a huge difference in the outcome. INVESTING is the same way. There is a giant array of "pieces" to invest in.... Treasury bonds - CD's - Corporate bonds - stocks - properties - REITS - mREITS - Okay I could fill a page with investment grade ways to park your money. But... and here's the main idea for this post ---- there are only so many ways that ANYONE has to invest. And just like the parts for the small block build --- they're available to anyone.

So does the "Pro" money management firm have an edge up on say -- yourself -- when it comes to investing? Well.... yeah. They do this for a living. But the real difference is - how much time are they going to spend on YOUR account. I mean this really. How much time per month - per quarter - per year - are they going to spend making certain that Joe Average is going to maximize the results to they can retire in comfort? At Schwab -- you get a Senior VP level guy to personally help you out once you have an account with TEN MILLION DOLLARS in it! For that kind of money - you actually get someone that oversees your account. He doesn't do any investing -- and he doesn't give any advice - but he'll make sure that your withdrawals are handled the day you want them - and he invites me to parties - and I get good eats at the golf tournament etc... TEN MILLION MINIMUM. So what level of oversight and thought do you get for say -- ONE HUNDRED GRAND? That's a lot of money!! TO YOU.... to a money management firm that makes a percentage of your deposit... it's the equivalent of a penny in the gutter. If the firm has a staff of 100 people -- all with salaries and they have two whole floors in a downtown high-rise with rent to pay... they have to manage a LOT of money to make that all work -- given that you are going to pay them 2% if you have a million or so to invest -- and about 1% if you have 10 million and so on. So we're clear here -- we're talking about FIXED FEE management. When you have a "broker" -- you might actually get more attention if you're capable of buying 100 or 500 shares of something - because the "broker" makes a commission... and when do they get a commission? When they're buying or selling something in your account. Otherwise - they get ZIPOLA.

So here's the million dollar question. Who should have more interest in your money? You? The Broker? The "Pro" money management house?

Shouldn't it be YOU?

Now -- and here's the real reason for this long winded post.... If everyone has the same access to the same investments as listed above... what's the difference between you and the "pro"? The answer is -- he has some knowledge of all things money. I'll give him that. He's actually spent the time to learn about money. YOU -- THE GUY WHO HAS THE MOST DEPENDENCE MAKING SURE YOU HAVE ENOUGH MONEY TO RETIRE ON!!! YOU HAVE DONE NOTHING!!

Is that right?? The guy who has the most riding on making sure he's going to be okay -- has done the very least to see that happens. Pretty effing sad huh. You sure as hell wouldn't treat your small block Chevy that way would you? Would you work hard and buy all the parts -- and then just lay them around the shop and let 'em rust and never give them ANY thought at all... until what - 10 or 20 years went by? Then what? You look around and go -- wow --- all those parts I bought are old -- out of date -- don't work together -- didn't make the horsepower I thought they would.... ARE YOU EFFING KIDDING ME!!

So I don't care if you give your money to a broker -- to a big money institution - or do it yourself.... LEARN ABOUT YOUR MONEY -- read a book or some articles and ASK SOME PEOPLE ABOUT WHAT OR HOW THEY DO "X" --- no damn different than you do about your motor? Or tire size or wheel offset!!

It's only complicated if you CHOOSE to not learn and pay attention. Thank gawd some have stuck with this and actually done okay for themselves!! They'e taken charge -- and found out it's not really very complicated... it can actually be just as much fun as car parts!


When one guys Small Block Chevy makes a zillion horsepower and lasts 10 years of hard driving --- and the other guys is lame as hell and will barely chirp the tires.... Do ya suppose that one guy paid a lot more attention to his build? And while he might not have built it himself -- he might have spent some time learning who the best SBC builder in the Universe was... or what parts and pieces he wanted to make the best combo for his build... and had great discussions with the builder about all of that.

In other words -- there's a bit more that needs to be done than just pick "Risky" - "not so risky" - and "safety". Or randomly choose the answer to "what kind of investor are you".... I mean really -- how would you really know what kind of investor you are unless you knew what investments you owned and how they added up and so on. It's like racing - how would you know if you liked a road course versus the Bonneville Salt Flats if you didn't even know the difference between them?

Okay -- I've done my job -- I've got ya thinking about that. And put your best Forrest Gump impression on here --- "that's all I'm going to say about that".

[GregWeld]

Okay -- I changed my mind --- I SOLD IT ALL....

It's just not a stock I want to be in to. I picked up a 40% return on my purchase for one month. That's good enough. DONE.



12/27/2013 Sell Trade Details TWTR
TWITTER INC
1,700 $69.602 * $118,313.73
12/27/2013 Sell Trade Details TWTR
TWITTER INC
300 $69.591 * $20,875.60






Tomorrow I'll sell half the Twitter (TWTR) I bought....


Remember the old adage -- pigs get fat - hogs get slaughtered? I'm a pig... the shares are up 50 Grand on my 100 Grand purchase -- I refuse to call it an "investment" as it wasn't and isn't.... it was pure gambling -- I've won pretty good so far - and I'm way way way ahead of where I thought it would be -- and I was only going to buy 1000 shares to begin with!

I hate short term gains -- as this will be taxed at 40%.... but like I always say --- they get their percentage -- I keep the rest. I'd far prefer to pay taxes than try to generate losses.... That's just a stupid suckers "big talk" strategy. Big talkers want you to think that they make so friggin' much money that "they have to make some losses so they can skin the guberment".... That is just pure BS. The goal should always be to make the most money possible.

We're not talking about end of the year tax strategy here -- that's a different strategy where you have huge gains - you feel you need or have taken some -- and now you have the possibility of REDUCING that gain by selling some losers that you were planning on selling anyway. If you sell the losers the same year as the big gainers -- then that's SMART -- rather than taking all the gains and then the following year selling the losers and getting nothing for your effort. Don't confuse the two - they're entirely different.

[toy71camaro]

Okay -- I changed my mind --- I SOLD IT ALL....

It's just not a stock I want to be in to. I picked up a 40% return on my purchase for one month. That's good enough. DONE.

And the numbers today showed everyone else did too. LOL

[Sieg]

Okay -- I changed my mind --- I SOLD IT ALL....

It's just not a stock I want to be in to. I picked up a 40% return on my purchase for one month. That's good enough. DONE.

I was watching it this morning and hope you did. :thumbsup:

[toy71camaro]

Recently I've been asked a lot of questions about the Do It Yourself style versus the "Pro" managed accounts... and this got me thinking. That's usually never a good thing -- but I get asked this question A LOT. So let's see if I can put this in to an Investing 102 style thought process.

I think that most people are AFRAID of money. I have no idea why that is... we'll take apart engines with zillions of pieces - hell - we'll take apart entire cars without giving it a thought... but manage our own money?! Are you crazy?!?!

Why? Because we don't know anything about "money" except that we need it.

Okay - so we turn it over to someone that does.

How many of you have read a thread about "the shop" or "the guy" that took their money and did a crap job - or never finished it - or it was 3 times more expensive than quoted? YEP -- a nice showing of hands.

Okay --- what's the difference between that -- and handing over your retirement savings (far more important than any old car!) to a "shop" or "guy" that is supposed to do a good job for you? Never thought about it that way did ya? Every "shop" (money firm) should just be equal and make you rich without you ever having to do a thing.... Right now I wish I knew how to insert that big LOSER BUZZER!!

The "PRO" has some training... in the shop and in the money firm... how much - who taught the class - were they the A student or did they just attend and got a passing grade. The Roadster Shop is a "shop" -- so was Frank's "Prodigy" one is an epic fail. The other turns out some stellar stuff. Do you think "money shops" might just be the same way?

So -- just like building a small block chevy --- there's about a half a zillion parts and pieces you can assemble to build a motor. But if you've learned ANYTHING about motors -- you know there's "parts" and there's COMBINATIONS that make a huge difference in the outcome. INVESTING is the same way. There is a giant array of "pieces" to invest in.... Treasury bonds - CD's - Corporate bonds - stocks - properties - REITS - mREITS - Okay I could fill a page with investment grade ways to park your money. But... and here's the main idea for this post ---- there are only so many ways that ANYONE has to invest. And just like the parts for the small block build --- they're available to anyone.

So does the "Pro" money management firm have an edge up on say -- yourself -- when it comes to investing? Well.... yeah. They do this for a living. But the real difference is - how much time are they going to spend on YOUR account. I mean this really. How much time per month - per quarter - per year - are they going to spend making certain that Joe Average is going to maximize the results to they can retire in comfort? At Schwab -- you get a Senior VP level guy to personally help you out once you have an account with TEN MILLION DOLLARS in it! For that kind of money - you actually get someone that oversees your account. He doesn't do any investing -- and he doesn't give any advice - but he'll make sure that your withdrawals are handled the day you want them - and he invites me to parties - and I get good eats at the golf tournament etc... TEN MILLION MINIMUM. So what level of oversight and thought do you get for say -- ONE HUNDRED GRAND? That's a lot of money!! TO YOU.... to a money management firm that makes a percentage of your deposit... it's the equivalent of a penny in the gutter. If the firm has a staff of 100 people -- all with salaries and they have two whole floors in a downtown high-rise with rent to pay... they have to manage a LOT of money to make that all work -- given that you are going to pay them 2% if you have a million or so to invest -- and about 1% if you have 10 million and so on. So we're clear here -- we're talking about FIXED FEE management. When you have a "broker" -- you might actually get more attention if you're capable of buying 100 or 500 shares of something - because the "broker" makes a commission... and when do they get a commission? When they're buying or selling something in your account. Otherwise - they get ZIPOLA.

So here's the million dollar question. Who should have more interest in your money? You? The Broker? The "Pro" money management house?

Shouldn't it be YOU?

Now -- and here's the real reason for this long winded post.... If everyone has the same access to the same investments as listed above... what's the difference between you and the "pro"? The answer is -- he has some knowledge of all things money. I'll give him that. He's actually spent the time to learn about money. YOU -- THE GUY WHO HAS THE MOST DEPENDENCE MAKING SURE YOU HAVE ENOUGH MONEY TO RETIRE ON!!! YOU HAVE DONE NOTHING!!

Is that right?? The guy who has the most riding on making sure he's going to be okay -- has done the very least to see that happens. Pretty effing sad huh. You sure as hell wouldn't treat your small block Chevy that way would you? Would you work hard and buy all the parts -- and then just lay them around the shop and let 'em rust and never give them ANY thought at all... until what - 10 or 20 years went by? Then what? You look around and go -- wow --- all those parts I bought are old -- out of date -- don't work together -- didn't make the horsepower I thought they would.... ARE YOU EFFING KIDDING ME!!

So I don't care if you give your money to a broker -- to a big money institution - or do it yourself.... LEARN ABOUT YOUR MONEY -- read a book or some articles and ASK SOME PEOPLE ABOUT WHAT OR HOW THEY DO "X" --- no damn different than you do about your motor? Or tire size or wheel offset!!

It's only complicated if you CHOOSE to not learn and pay attention. Thank gawd some have stuck with this and actually done okay for themselves!! They'e taken charge -- and found out it's not really very complicated... it can actually be just as much fun as car parts!


When one guys Small Block Chevy makes a zillion horsepower and lasts 10 years of hard driving --- and the other guys is lame as hell and will barely chirp the tires.... Do ya suppose that one guy paid a lot more attention to his build? And while he might not have built it himself -- he might have spent some time learning who the best SBC builder in the Universe was... or what parts and pieces he wanted to make the best combo for his build... and had great discussions with the builder about all of that.

In other words -- there's a bit more that needs to be done than just pick "Risky" - "not so risky" - and "safety". Or randomly choose the answer to "what kind of investor are you".... I mean really -- how would you really know what kind of investor you are unless you knew what investments you owned and how they added up and so on. It's like racing - how would you know if you liked a road course versus the Bonneville Salt Flats if you didn't even know the difference between them?

Okay -- I've done my job -- I've got ya thinking about that. And put your best Forrest Gump impression on here --- "that's all I'm going to say about that".

Ohhhhhh so true. LOL. Sad. But true.

I woke up the day I went into a broker (whom i had done some work personally for, so we were somewhat friends). Anywho, his base charge was like 5% of my deposits until reached some 50grand mark or something, then it went down a hair, and the more i had invested the less it got.

But, that got me thinking. He told me i can expect a 7-10% return on my cashola. But he (didnt make it quite so clear) would be skimming off 5% off the top. Regardless of how my money did. I figured out that i cant ever get ahead making 2-4% on my money! I can do THAT good myself! Thus, i started learning, paying attention etc. Then I ran across Mike, who introduced me to this thread.. and as they say, the rest is history...

Did i beat that 2-4% return since *I* took over. OH HELL YEAH I DID!

[Sieg]

Okay -- I've done my job -- I've got ya thinking about that. And put your best Forrest Gump impression on here --- "that's all I'm going to say about that".

Thank you for another exceptional layman termed example. :thumbsup:

[GregWeld]

And the numbers today showed everyone else did too. LOL

I was watching it this morning and hope you did. :thumbsup:





Yes!! So like most things -- the key is to get in BEFORE it takes off and get the heck out before it drops faster than you can say SELL...


Ever watch the movie "Trading places"?



I'd made up my mind last night that I was going to take a nice gain -- regardless if I missed another 10 points higher -- I was happy with what I had and that's it. So I was up an hour and a half before the market ever opened and sold on the open. If you're UP 45 points -- do you really care if it's down to only 41 points... You shouldn't ----- that's where people get crossed up! It's called GREED. We're not trying to be greedy -- we're just trying to make money. Big difference. It's an attitude - and ya gotta have your head in the right place.

[glassman]

Greg, that is so funny you say that about Trading Places, i got my family to watch it last nite for the first time. I worked at the theatre's when it came out and its always been one of my favorites.....

But, can you put it to me in laymans terms what went on at the end, I get the "fixes" the Dukes where trying to do (get a peak at the orange crop, which i;m sure was altered by Valentine and Winthorp)

So Dukes instructed their buyer to "gobble" it all up in the a.m., buy low, hold for a minute or longer(much)...sell high...

But "HOW" did V and Winthorp make out? I saw at the end they were either buying or selling rather calmly and slowly...if they "shorted" the stock, how'd they do it....i'm missing something

[96z28ss]

I just never got twitter. I just never felt they had a good way for advertising revenue. I think the stock will go down like Facebook did and once they show they can make money off of advertising it will go up.
I got some Facebook at $33 and at $26. Hopefully it keeps going up.

[GregWeld]

Greg, that is so funny you say that about Trading Places, i got my family to watch it last nite for the first time. I worked at the theatre's when it came out and its always been one of my favorites.....

But, can you put it to me in laymans terms what went on at the end, I get the "fixes" the Dukes where trying to do (get a peak at the orange crop, which i;m sure was altered by Valentine and Winthorp)

So Dukes instructed their buyer to "gobble" it all up in the a.m., buy low, hold for a minute or longer(much)...sell high...

But "HOW" did V and Winthorp make out? I saw at the end they were either buying or selling rather calmly and slowly...if they "shorted" the stock, how'd they do it....i'm missing something



So with "FUTURES" --- you're buying the ABILITY to purchase "X" at "X" price... some time in the "future".... The Dukes had paid to see a sneak peek at the report... Winthrop and Valentine got the "peek" that should have been delivered to the Dukes --- and altered it and mislead the Duke boys. So they thought there was going to be a SHORTAGE of Oranges.... and were buying "ahead" of the actual news (illegal to say the least)... THEY ran the price to the moon trying to "corner" the market.... Winthrop and Valentine were SELLING at the PEAK of the market.... and then bought when the market crashed and went low ----- Very much like a short.... they sold delivery of the commodity at high prices (but they really didn't own the commodity) -- and in order to deliver at those high prices (the buyer at the high price MUST take the goods or resell or whatever) Valentine and Winthrop BOUGHT the futures at low prices -- therefore making the "spread" between the low and the high.

The Dukes BOUGHT all the way up ---- then they were unable to sell since the market was closed and therefore had to come up with the cash for their purchases.



So ---- In the STOCK MARKET --- if you SELL a naked short (meaning you borrowed the stock from the brokerage house and sold it) you get the cash in your account ------ say you shorted 100 shares of Apple for $550 a share. The brokerage would deposit $55,000 cash into your account --- but they'd also show a MINUS 100 shares of AAPLE in your account.... and at some point you must buy that 100 shares to clear up your short. Obviously you'd be trying to SELL HIGH and BUY LOW.... so you're hoping (betting/gambling) that APPLE was going to go LOWER than where you sold it short. And if successful - you'd pocket the difference.


COMMODITIES are like this ---- so let's say you're a huge user of PORK BELLIES.... you use 100,000 pounds per month... you might have a professional 'trader' buy pork belly futures for you so you could control - or try to control - your cost -- out 6 months or a year. Airlines buy FUEL this way etc. They "TRY" to hedge their costs by betting which way prices are going to go. Sometimes this is great - sometimes it's just like any other bet - it goes against you and you loose.

The key to much of this is that you don't ever actually have to take the commodity you're betting on. Much like they don't mail you a stock certificate... so you could "bet" fuel prices were going higher by this summer --- and buy fuel futures now at X price for June "delivery" --- but maybe they go even higher as June approaches -- and you resell your "contract" to someone else that actually wants that fuel --- or maybe it goes to another speculator....

Commodities are best left to the pros.... as this is a very specific "knowledge" base.

SHORTING is nothing but gambling --- and I never do it -- even though I THINK about "I should" do this because I "just know" (a gut feeling) that X company is going to suck. Well --- about the time you THINK you know this -- and short the hell out of X company -- some other company comes in and makes a huge order that bails them out - and the stock goes sky high ---- or some other company folds up and your company gets all the business ---- or some competitor offers to buy the whole thing for X (which is $10 a share higher than where you shorted it!!). It takes a huge amount of research to be a successful short seller. It's too much work -- and why bet that someone is going to suck --- I'd rather bet that "X" is going to do well -- and for me -- it's an easier "guess" than who is going sour.

There is also "shorting against the box" -- which is selling a stock short against stock you already own... at least that way if the bet goes against you - you know what you're cost is because you already bought the shares you shorted - so you can replace the shorted shares with the ones you have. I've done this a couple of times -- then I thought --- why bother --- I've added stress to my life and for what? If I think the company is going to suck - and I own the shares and need cash -- why don't I just sell now and move on. DONE.

So let's say you shorted TWITTER yesterday -- you sold 100 shares SHORT.. pick up 66,000 in your account --- and you replaced them today when you bought them at the end of the trading day for $56 -- you'd have made 10 a share for your effort. But what if you got greedy and didn't "cover" -- or you got busy and forgot to "cover" -- and monday they start back up and keep going up 3 and 4 bucks a day? When do you cover now? DO you wait for that magic misstep or do you just watch the shares shoot to 100... In other words "how much pain are you willing to accept"? UGH! Not for me -- no sir.

[GregWeld]

Okay -- I changed my mind --- I SOLD IT ALL....

It's just not a stock I want to be in to. I picked up a 40% return on my purchase for one month. That's good enough. DONE.



12/27/2013 Sell Trade Details TWTR
TWITTER INC
1,700 $69.602 * $118,313.73
12/27/2013 Sell Trade Details TWTR
TWITTER INC
300 $69.591 * $20,875.60




BETTER LUCKY THAN SMART is my favorite saying!!!

[glassman]

Thanx for the explanation Greg, i knew most of it and i'm still a little foggy on the "spread". But, yeah, i can see where a "specialist" has to do this in futures, just way too many variables for us in the "not know"....which is also why i dont really invest in tech, too much too know and the game changes to fast for me (and i grew up "programming" computers, could'nt grasp the logic)...

I need the "KISS" philosophy....and thats all there is to it.

Saw Peter Lynch on Bloomberg two weeks back, man i like that guy and the way he thinks....

[GregWeld]

My first investments were based on the Peter Lynch "theory" --- I still use his version to this day and it's never let me down.

[GregWeld]

I have posted here before that "money" chases "return" -- and it's my belief (and history bares this out) that there is no unused pile of money just sitting around waiting to be put to work. Rather --- for one asset class to rise --- another must fall ---- because that is where the money is coming from to make the other rise.

Found this paragraph in another article discussing the recent rise in the 10 year treasury bill.



The average interest rate for a 30-year fixed-rate mortgage rose to 4.48% this week from 4.47% last week and 3.35% a year ago, according to Freddie Mac.

Investors have sold Treasury bonds en masse this year to seek higher returns in stocks and riskier fixed-income assets. Through November, U.S. bond funds targeting Treasury debt suffered a net outflow of $40.2 billion in 2013, according to data provider Morningstar Inc.

In contrast, funds that invest in low-rated "junk bonds" issued by U.S. companies have attracted $2.6 billion from investors. (because they pay a higher rate of return!) <I added this>

Treasury bonds are on track to suffer their biggest annual loss since 2009, according to Barclays PLC.

[GregWeld]

So.... here's the funny part about the statement above.


The author states that people have SOLD bonds en masse.... so that they could invest in riskier assets. REALLY!!!


What happens when people SELL EN MASSE?? Doesn't make any difference if they're selling BONDS or STOCKS or HOUSES.... PRICES FALL...... When there's more sellers than buyers.

So now try to convince me why the author (and anyone else you talk to that supposedly knows all about money) thinks that BONDS are less risky to own.

That my friends is complete nonsense! If you own something and it is SUBJECT to going down -- that is taking a risk isn't it? So my whole deal against bonds is that they pay LESS THAN market rates (for the type we're discussing here - government issued super "safe" Treasury and Muni bonds) ----- and they go down and continue to go down in a rising rate market. That isn't safe -- and the only way to get your money back IN FULL --- is to hold the bond until maturity. That could be 10 or 30 years!! So for the entire time you've held that super safe bond --- and collected the below market rate of return... for what -- ZERO potential of capital growth (so inflation is kicking your butt as well!). The only way you can make money owning bonds is if the rate on your bond is ABOVE market rates. Given the timeframe of the maturity of the bond -- you MUST KNOW that interest rates are going to go up and or down during that period.... so aren't you just gambling that by buying a bond that pays X rate for X years -- that at some point the market rate is going to be LESS that what your bond pays and you will have a capital gain? UGH --- safe? I don't think so. You have two forces working against you -- time -- which is inflation... and the interest rate market.

[GregWeld]

Thanx for the explanation Greg, i knew most of it and i'm still a little foggy on the "spread". But, yeah, i can see where a "specialist" has to do this in futures, just way too many variables for us in the "not know"....which is also why i dont really invest in tech, too much too know and the game changes to fast for me (and i grew up "programming" computers, could'nt grasp the logic)...

I need the "KISS" philosophy....and thats all there is to it.

Saw Peter Lynch on Bloomberg two weeks back, man i like that guy and the way he thinks....



SPREAD = difference of what you paid and what you sell for. It could be minus or positive.

So you bought for $1 and sold for $2 -- the spread was $1. Normally this would be called gain... but when you're buying futures -- etc - the term changes to "the spread" because it is moving and variable and it isn't a "gain" (or loss) until the contract closes for you.

[Sieg]

So now try to convince me why the author (and anyone else you talk to that supposedly knows all about money) thinks that BONDS are less risky to own.

That my friends is complete nonsense!

.........and that somewhat summarizes why when looking to reduce the cash portion of my portfolio (I've been holding too much cash for too long - my security blanket I guess) I re-positioned 33% of my "Soldiers" to KMP's battlefield on Thursday where they will certainly see more action than the barracks they were cowering in.

http://seekingalpha.com/article/1917461-market-wrongly-undervaluing-kinder-morgan-energy-partners

[glassman]

SPREAD = difference of what you paid and what you sell for. It could be minus or positive.

So you bought for $1 and sold for $2 -- the spread was $1. Normally this would be called gain... but when you're buying futures -- etc - the term changes to "the spread" because it is moving and variable and it isn't a "gain" (or loss) until the contract closes for you.

Thanx Greg, makes easy perfect sense!!!

[GregWeld]

Not pitching this or any other stock name... Everyone needs to do their own work and decide what THEY are comfortable owning! Please -- don't think for one moment that what I - or anyone else does - is what you should do!


Sieg,

That's why I own 10,000 shares of it! The dividend is "solid" (nothing is guaranteed of course)... and I have down side protection - because as the price decreases the percentage the dividend pay INCREASES - so becomes more attractive to new buyers/investors (given the return % based on their cost).

I currently have a "loss" in this name (my average cost per share is $84.27) - actually a pretty good sized one on a percentage basis (almost 5%) --- but that doesn't bother me one bit! A small percentage move up in price will have me even - and in the meantime I'm getting a very nice cash flow from it (I'll save you all doing the math and research -- I pick up $4,500 PER MONTH in dividend off this holding).

[Sieg]

Not pitching this or any other stock name... Everyone needs to do their own work and decide what THEY are comfortable owning! Please -- don't think for one moment that what I - or anyone else does - is what you should do!

Key words!

When you see this type of information and it looks compelling, then it's time to do your own research and analyze your positions to see if it enhances the objectives of your portfolio.

In my case it strengthened the portfolio's earning potential compared to the cash sitting idle. The stock was at a reasonable price point vs the last 2 year period and opinions indicated it should be relatively stable in 2014.

[GregWeld]

Since we have just discussed "FUTURES" ------ and this is also an automotive website... I found an article about GAS/E85/Futures all wrapped into one piece!


Now this is what I was talking about when I said trading futures is best left to the professional... because you need to REALLY be on top of your game and following every little nuance -- lest you get your arse handed to you by some completely out of left field "event". Just a RUMOR will send futures up or down...





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




Ethanol requirements for U.S. gasoline appear to be losing friends and influencing the wrong people, with calls growing to reform or scrap the government mandates altogether.
The Environmental Protection Agency in November proposed reducing the amount of renewable fuels, including corn-based ethanol, that oil refiners must blend with gasoline. The rule is a centerpiece of government efforts to curb carbon emissions, while jump-starting alternative forms of energy.

The draft rule would impact the 2014 requirement for renewables to fall between 15 billion and 15.52 billion gallons from 18.15 billion gallons. But the proposal to reduce ethanol requirements for 2014 has done little to quell the groundswell of complaints about the practical effects of using corn-based fuel in America's gasoline supply.

Earlier this month, California Democrat Dianne Feinstein joined forces with Oklahoma Republican Tom Coburn to introduce a Senate bill to strip ethanol completely from the Renewable Fuel Standard, also known as RFS. Although Feinstein continues to champion renewable fuel, she has expressed concerns that excess corn-based fuel production—mainly due to the RFS requirements—is "really not wise," and that the standards may hurt the Golden State's livestock producers.

The bipartisan nature of that bill, combined with the EPA's proposal, sent corn futures reeling on the Chicago Board of Trade in early December.

[GregWeld]

I'm not sure who was selling "GOLD" as an "inflation hedge".... but I sure do remember EVERYONE on the TV saying that "you should have it in your portfolio as an inflation hedge". REALLY???


So it's gone from 1800 down to under 1200..... That sounds like DEFLATION to me. OUCH.

See -- the problem with that kind of investing is that the only way it goes UP -- is if someone is willing to pay more than you did. That's a grand idea that usually winds up not working out real well. We were all supposed to have a chunk of gold in our safe somewhere in case the world went to hell.... Hey! Good luck with that kind of thinking. When the world goes to hell... (it won't)... you'll have far larger problems to deal with. I just don't want to live my life worrying about something that isn't going to happen. Oh yeah - It makes good talk. But it isn't going to happen.

Personally -- I'd rather have $1800 of something that's going to be $2000 over time even if no one else wants to pay me 1801. The dividend will still buy me stuff.

I think all the "gold bugs" moved on to BitCoin. We'll see how that turns out. I'd rather put a down payment on a house or a duplex -- which might not seem as interesting - but I'm guessing in the long run will serve my purpose better.

[GregWeld]

I had to cut and paste this from an article this morning -- this was the opening paragraph.


Really? RISKIER ASSETS? I love that kind of line. So GOLD wasn't risky at all -- the fact that it's DOWN over 30% in one year. Sounds pretty risky to me!!



Gold held steady in thin year-end trade on Tuesday, on course for its biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets.


AMAZING......

[GregWeld]

I sold all my gold a couple years ago. I think I did ok considering the basis was from 1993.

I would love to buy some KMP, just waiting until January to see if prices fall like the "analyst" say they will :rolleyes:



In order to figure out if you did "okay" (and not saying or implying that you didn't!) you'd have to factor in the holding period - and the inflation over the holding period.

Luckily we went into a deflationary period for awhile -- when gold was going up and everything else was going down (houses etc).

Here's the deal --- and this IS INVESTING 102 --- so it's why I pull this stuff out and try to get people to open up their view of all things money....

Investments need to be looked at as competing for what COULD have been if the investment choice was "X" or "Y".... during the same period. Investing shouldn't be STAGNANT... money needs to be working and pulling the wagon ALL of the time. And only some minor analysis needs to be done to make sure a guy is seeing that thru. Buy and hold and forget is not a strategy that will win. Winning is critical. More critical than anything else you'll ever do... Money DOES buy happiness -- the guy that said it couldn't or wouldn't never had any. :lol:


So just for fun --- I looked at the 10 year chart of GLD (a gold ETF) from 2004 to present.

GLD is UP 160% for that period.


Apple (AAPL) is UP 2916% for the same period


Kinder Morgan Partners (KMP) was only UP 77% for that period


So I think you did okay with your GOLD --- but only if you'd have sold it well up near it's top. The problem is on the way down. But even if you'd have held til now -- you did pretty well.

What you'll read about on here is that MOST people buy as something becomes the "hot" investment... unlike you -- were you bought for whatever reason at the time and held on. Your buy was near the "bottom" before gold took on the speculative aura. That's what I'm trying to get people to understand on here. Like flipping houses -- like the dot com era -- gold became "the hot ticket"... and that usually ends poorly because most don't get in until the gig is just about up.

[CamaroMike]

I see what you are saying, my rule of thumb is if the people at work are talking about it (bitcoins) its too late to catch that train

[GregWeld]

I see what you are saying, my rule of thumb is if the people at work are talking about it (bitcoins) its too late to catch that train




EXACTLY!!!



Lucky you (anyone) that can get on the train when it leaves the station... but that's really hard to do when you don't know where that train is going! Easy to see in hindsight.. and the problem with the ghost train is you don't know where it's going and you don't know when it's going to stop. It might be a fun ride with great scenery along the way - but who the hell knows that. Thus my "gambling" statements.

When it's RETIREMENT money - or money you're saving for college - or a house etc - gambling might get you there real quick! But it might also wipe you out... and we don't want to be the wipeouts.

If it's money that's completely EXTRA - you're already set - or already well on your way to retiring --- THEN BY ALL MEANS play a little. It's made me a fortune a couple of times -- so I'm not against gambling at all. I just don't want people to confuse that with actual investing - and they are very very different.

But mostly why I pick on certain items -- is because I want people to be able to tell the difference because that might save them from a big loss. Money is too hard to come by, to loose it foolishly.

You're new here -- and there's about half a zillion pages in this thread -- but the recurring theme is INVESTING wisely - cash flow - building that nest egg you can count on - so we can all go build cars and race together or play golf or whatever else it is people see themselves doing down the road. So it's about time - compounding - averaging in over time - and real savings that are paying you and ADDING to your savings without you ever having to worry about that. So I'm mostly a fan of dividend investing. Not trendy investing. Not gambling. But whatever you choose to invest in == it should have some cash flow paying you to hold it. Rental property - dividend stocks - whatever... Not BitCoins. :warning: :lol:

[Sieg]

Year to date performance

SP 500 +31.86%
Sieg :sieg: +33.60%

:woot: :woot:

[toy71camaro]

Year to date performance

SP 500 +31.86%
Sieg :sieg: +33.60%

:woot: :woot:


Woohoo! Awesome!

[GregWeld]

I love dividends and hate short term capital gain tax! I consider myself a good saver and have always reinvested my dividends since I started in the market a few years ago but never truly saw how important compounding is. Its like compounding interest on a loan but its working in my favor. I have read most of this thread and would like to finish all the pages in the next week. I have a Bachelors degree in Finance and Greg seems like you should have taught a class at my school.


I have been saving up for a house so I have been investing in low risk high dividend securities that I trust and understand. I feel much more secure after reading the first 20 pages. Thanks for giving us less experienced investors some real world advice!






Good to hear Mike! And thanks for the kudos... The whole thread - as you have read - is pretty basic stuff. We could get far deeper into it but I don't think that serves anyone very well. As you've no doubt heard me say repeatedly -- it's not all that complicated. But sadly, schools do a HORRIBLE job at preparing people for "beyond work"... actually - they do a pretty sad job at preparing for LIFE period -- but we digress.... LOL


The funniest part about the whole investing thing is -- the principals remain the same regardless of the amount invested! Oh yeah -- for certain - big money has more stuff available to them - particularly when you hit that 10 million dollar threshold... but it still all boils down to the same principal... make a return on your money, minimize the risks if possible, pay long term capital gains preferably if at all possible...
Pretty simple really.




Year to date performance

SP 500 +31.86%
Sieg :sieg: +33.60%

:woot: :woot:




Okay -- YOU need to start to take over -- 'cause I just barely beat the dogs of the dow (kidding).




Nice job by the way -- and to the rest of you.... don't think for one minute it's always this easy! It's been a real easy market to be in. It's more that you have to be in it to win it... and trying to "time" the market usually means you're sidelined during the big plays. So while it's more fun to be out when it sucks and only in when it's rolling high... it's just almost impossible to gauge. Ya just have to remember the good times and think longer term.

[GregWeld]

I was researching Southern Company (SO) and found they pay a sturdy dividend but seems like they are lacking in growth for the past couple years. Guess I will research some more in to it.

Both Con Ed (ED) and Duke Energy (DUK) have crushed Southern (SO) by a large margin the last 5 years.... not sure why -- but given a similar dividend -- the TOTAL RETURN is very important -- so yeah -- you need the capital growth component to be there as well.

[Sieg]

Okay -- YOU need to start to take over -- 'cause I just barely beat the dogs of the dow (kidding).

Nice job by the way -- and to the rest of you.... don't think for one minute it's always this easy! It's been a real easy market to be in. It's more that you have to be in it to win it... and trying to "time" the market usually means you're sidelined during the big plays. So while it's more fun to be out when it sucks and only in when it's rolling high... it's just almost impossible to gauge. Ya just have to remember the good times and think longer term.

What I like is I did this with stocks rated "C" or higher by Schwab.

The C rated stocks are AT&T, Coca Cola, Excelis, Nike, and Sprint. All but a few pay 3+ % dividends.

Thank you GW :thumbsup:

[GregWeld]

What I like is I did this with stocks rated "C" or higher by Schwab.

The C rated stocks are AT&T, Coca Cola, Excelis, Nike, and Sprint. All but a few pay 3+ % dividends.

Thank you GW :thumbsup:





WTF!!! You made 33% on your money AND YOU DIDN'T GAMBLE?? Well that's just not right!!!


HAHAHAHAHAHAHAHAHAHA

[WSSix]

So I've already sat down and decided how I'll divvy up my Roth installment for 2014. I just have to wait for the calender to say 2014 and the money to hit the account. Here's what I'll be doing.

I'm still in growth mode so I looked at my returns, especially dividend payments, to decide what to do. I put more weight in the dividend payment than the total return. I like the dividend payments, lol.

KMP is barely positive right now for me but they pay a great dividend and buying more will bring down my average share cost/price.

SO I'm actually losing a little money on but the share price is low enough that I can buy enough to get a good dividend payment. I'm putting a little more in but not as much as other stocks. The company is still considered solid and a good position to hold. This works with my long term desires just like KMP.

WFM has been fantastic for me but I'm only putting a small amount into it. The dividend is small and the gains have been mainly capital. That's great but I prefer the dividend payments. It's more real to me that way. If that makes any sense. I'm simply not focusing a lot on this one but certainly not forgetting about it. Maybe next year I'll put a bigger chunk in but not this year.

MCEP. This one is weird for me. If anyone remembers way back in the spring when I bought this one I said it was a gamble. It's still a gamble. Its share price has actually gone down slightly since I bought it. The dividend payment has gone up not only since I bought it but also since the company became public only a short while ago. The combination of a good dividend payment and a low share price means I can buy a good number of shares for not a whole lot of money. Its dividend is on tract to be close to a 10% return. I can't reinvest the dividend, unless that's changed recently, which sucks but it's no big deal. It's not a lot of money I'm playing with, and I figure I'll use the dividend payments at the beginning of the next year to buy more stocks. That's still free money to me. I should also note I'm huge on percentages. I don't care if 10% returns only equals 50 cents. I feel like I've won the damn lottery. :lol:

The rest of the money is going into my other companies which are simply solid investments, nothing risky or special. Examples are KO, MCD, JNJ, and CLX.

I'm not putting anything into OXY or COST. COST is too expensive right now for what little I would have been able to put into it. It's a long term solid choice. I'm trying to be more aggressive with my rather safe choices. That's my idea of risk. OXY simply hasn't performed well enough for me to put more into it at this point. I'm just going to hold it though as I've got a good bit of dividend payments reinvested that are doing ok compared to my initial investment. I'll look at this one again next year or through the year really.

2013 has been good for me. Hopefully, 2014 will be as well. This is the path I'm taking so we will find out. Hope the rest of you do well also.

[GregWeld]

Here's the whole deal in a nutshell Trey....


You have a plan --- and you're doing something. Nobody is EVER going to be able to invest and have every single company or investment work out 100% of the time. But you're thinking about what you're doing -- you're doing some work by looking at things and thinking about them in a RATIONAL LOGICAL way... and that my friend is a home run in the making.

BTW -- You're always correct looking at money in a PERCENTAGE basis... not just dollars. Percentages are what counts 10% is better than 2% --- even though one might be 10 cents and the other is 2 dollars.... 10% beats 2% every time.

[Sieg]

WTF!!! You made 33% on your money AND YOU DIDN'T GAMBLE?? Well that's just not right!!!


HAHAHAHAHAHAHAHAHAHA
You saw how much I gamble on the SEMA Trip. :D

[GregWeld]

You saw how much I gamble on the SEMA Trip. :D



Tighter than a frogs ass --- and that's water tight!

[XLexusTech]

Looking four your thoughts on something I have a decent strategy mixing 401k post tax cash in mutual funds indexes "lazy portfolios"
Then individual stocks all the ones we talk about here kmp jnj apple all Drips...

Now here is the problem I have a big chunk of cash sitting in the bankng doing almost no work for me.

I am gun shy on investing it because just about everything I own is up... Since you need to buy low I am stuck between a rock and a hard place

What to do?

[protour73]

First of all............HAPPY NEW YEAR guys!! (and gals?)

OK Mr. Inspiration. Now it's 2014, I have a recent windfall sitting in the bank that fell in my lap, completely unexpected. Time to INVEST!!!

WHERE do I go? ETrade? Scott Trade? etc, How do I take the first step? I don't recall too much talk of taking the first step in this MASSIVE thread.

I don't have "a guy" to go to either, not sure I'd even trust a recommendation.

HELP!!


Here's the deal --- and this IS INVESTING 102 --- so it's why I pull this stuff out and try to get people to open up their view of all things money....

Investments need to be looked at as competing for what COULD have been if the investment choice was "X" or "Y".... during the same period. Investing shouldn't be STAGNANT... money needs to be working and pulling the wagon ALL of the time. And only some minor analysis needs to be done to make sure a guy is seeing that thru. Buy and hold and forget is not a strategy that will win. Winning is critical. More critical than anything else you'll ever do... Money DOES buy happiness -- the guy that said it couldn't or wouldn't never had any. :lol:

[GregWeld]

Looking four your thoughts on something I have a decent strategy mixing 401k post tax cash in mutual funds indexes "lazy portfolios"
Then individual stocks all the ones we talk about here kmp jnj apple all Drips...

Now here is the problem I have a big chunk of cash sitting in the bankng doing almost no work for me.

I am gun shy on investing it because just about everything I own is up... Since you need to buy low I am stuck between a rock and a hard place

What to do?



I don't understand the thinking behind "it's all UP" so that must be a bad thing. Isn't that actually what is the most desirable??? We invest so our capital will appreciate. We WANT it to go up!

Some of you guys are still stuck in 50 cent land. Trying to buy "low"... and yet afraid if the stock you're looking at goes up from where you last looked at it. I don't know what your personal time horizon looks like until you retire -- but the longer you sit with money that's on vacation instead of hard at work.. you're on the wrong side of that 50 cents you're trying to save on the "buy".

When markets get a "BIG" pullback... the usual TV talking head is talking about a "bear market" pull back of 10%.... okay... 10% on a $60 stock is $6... Yet what we're looking for over 5 plus years is a Total Return of 50 to 100%.... in other words we're look at an investment that will double our money -- from $60 going to 100 or more. Makes the $6 "down 10%" look pretty small by comparison doesn't it?

This is why the nice safe confirmed way to invest is to "AVERAGE IN".... you put money in as you have an amount saved up that makes sense to invest... rather than saving up a big chunk and then trying to figure out what to do with it -- in the meantime losing out on the dividend (which clearly beat bank rates) and any growth. You're letting your fear of not buying "right" keep you from making any kind of return.

Let's take the TWITTER (TWTR) I just TRADED as a current example. I had decided to I wanted to buy 1000 shares of it. It's purely a growth stock - or maybe what they call a "momentum stock"... where it's just going up because of the pile on affect... whatever - I thought it was poised to go up.... so I bought 500 shares. The next week it had jumped up $4 a share! PERFECT!! That is EXACTLY what I wanted to see!! I quickly bought another 500 shares UP $4 a share. DUDE! I'm not afraid of that! That is what I want to see in a stock! That tells me more people want to own it than sell it. I then proceeded to buy ANOTHER 1000 shares (breaking my own set amount) when it jumped up another $10 a share. WTF!! It's acting way better than what I had hoped for.

Now -- the other side of that coin is --- IMHO it went too far too fast -- and I sold it for a nice $40,000 profit on my $100,000 purchase price. That's a pigs get fat hogs get slaughtered scenario... but that's a whole different post. My point is I was NOT afraid because the market was up... in fact - I'd bought even more!

Will the market be lower at some point if you bought today.... maybe. But we're not really worried about that because we're buying good stuff -- that pays a decent rate of return -- and we should have TIME on our side (this shouldn't be money you'll need next week or next year).

Waiting to "get in" is only a feel good temporary rush. But if you'd waited to get in the market last year -- you lost out on about a 30% gain. Again - making that 10% down move look pretty small in comparison.

If it makes you feel better -- then average in. Pick a date -- and get that money to work. Vacation is OVER.

[GregWeld]

First of all............HAPPY NEW YEAR guys!! (and gals?)

OK Mr. Inspiration. Now it's 2014, I have a recent windfall sitting in the bank that fell in my lap, completely unexpected. Time to INVEST!!!

WHERE do I go? ETrade? Scott Trade? etc, How do I take the first step? I don't recall too much talk of taking the first step in this MASSIVE thread.

I don't have "a guy" to go to either, not sure I'd even trust a recommendation.

HELP!!


The brokerage of choice really doesn't matter --- they all have low commission structures now. So as long as it's a discount broker -- the ones you named or Schwab... To me it's more a mater of convenience. The one you drive by on your way to work -- or to the store -- or is easiest to get to and has quick easy parking. Because you'll be making deposits once in awhile. But anymore - you can do that all with their "app" on your phone... deposit checks etc by just taking a picture of the front and back and hitting a couple buttons. I can't tell you the last time I actually went to my bank or broker.

So -- Happy New Year to you it sounds like!


Depending on what your investable amount looks like -- and that's a personal thing for you to know - not us.... will get you an appointment with an "advisor" that will help you get all set up in your account --- Discount brokerages DO NOT sell you anything - nor will they pick stocks for you or trade for you. That's a full service rip off house... er... I meant to say... that's for people that are afraid to think or take personal responsibility for their futures. LOL

The advisor is there to help you navigate their website - or do transfers etc. Remember - these are very low cost organizations -- so they don't have people sitting around trying to make a $500 commission off your buy or sell.

Then - once again - this depends on the amount your talking about --- I'd check with the advisor about what you qualify for as far as IRA's go. A ROTH IRA has certain limits on income level... and normal IRA's have rules too... and you NEED TO UNDERSTAND THEM before you open that type of an account. They're both RETIREMENT ONLY accounts... maybe you want that and maybe you don't. I personally have a whopping 25K in my retirement account... since I've never (for the last 25 years or so) needed one.

Once you understand the type of account --- or accounts ---- you want to open - then you need to decide what percentage of the dough you want to keep "liquid" for an emergency fund -- what you want to tie up until retirement - or maybe you just want a normal account where you can pull money from if you need it. PM me or preferably email me - if you have some personal questions and I'll be happy to answer them. What I WILL NOT do is to tell you to do this or do that -- and I won't tell you what to buy or when to sell. I'll help you to understand fishing --- I won't catch you a fish or hold your pole. (that didn't come out right did it!)


Then I'd tell you to go to page ONE of this thread -- and just digest it a little bit every day. In the end -- it will answer a lot of your questions and you'll get a lot of good information out of it that will serve you well over your lifetime. Not saying that because the thread is about half me posting --- but the questions you have are no different than most everyone else. They've been answered about 10 times each along the way.

The WORST thing you could do is to NOT get started --- so get started. It's fun as hell - rewarding - and it's like horsepower -- you'll always want more.

[GregWeld]

Investors who stayed with stocks from October 2007, before the market crash, to September 2013, would have had a cumulative return, including dividends, of 21%. Haverland estimates that the return on cash over the same period was 3.6%.




In other words --- even if you'd have rode the market to the BOTTOM in '08 and '09 ---- you'd have come out the other side in great shape!

[protour73]

Depends on the "amount" of cash, I have frittered away any chance at making money WITH my money for that same amount of time at .001% in a useless savings account (because I was a chickensh*t). Well, enough is enough, changes are coming to our household finances for 2014......and I'm not getting any younger either!!! :bang:

Investors who stayed with stocks from October 2007, before the market crash, to September 2013, would have had a cumulative return, including dividends, of 21%. Haverland estimates that the return on cash over the same period was 3.6%.

In other words --- even if you'd have rode the market to the BOTTOM in '08 and '09 ---- you'd have come out the other side in great shape!

[XLexusTech]

I don't understand the thinking behind "it's all UP" so that must be a bad thing. Isn't that actually what is the most desirable??? We invest so our capital will appreciate. We WANT it to go up!

Some of you guys are still stuck in 50 cent land. Trying to buy "low"... and yet afraid if the stock you're looking at goes up from where you last looked at it. I don't know what your personal time horizon looks like until you retire -- but the longer you sit with money that's on vacation instead of hard at work.. you're on the wrong side of that 50 cents you're trying to save on the "buy".

When markets get a "BIG" pullback... the usual TV talking head is talking about a "bear market" pull back of 10%.... okay... 10% on a $60 stock is $6... Yet what we're looking for over 5 plus years is a Total Return of 50 to 100%.... in other words we're look at an investment that will double our money -- from $60 going to 100 or more. Makes the $6 "down 10%" look pretty small by comparison doesn't it?

This is why the nice safe confirmed way to invest is to "AVERAGE IN".... you put money in as you have an amount saved up that makes sense to invest... rather than saving up a big chunk and then trying to figure out what to do with it -- in the meantime losing out on the dividend (which clearly beat bank rates) and any growth. You're letting your fear of not buying "right" keep you from making any kind of return.

Let's take the TWITTER (TWTR) I just TRADED as a current example. I had decided to I wanted to buy 1000 shares of it. It's purely a growth stock - or maybe what they call a "momentum stock"... where it's just going up because of the pile on affect... whatever - I thought it was poised to go up.... so I bought 500 shares. The next week it had jumped up $4 a share! PERFECT!! That is EXACTLY what I wanted to see!! I quickly bought another 500 shares UP $4 a share. DUDE! I'm not afraid of that! That is what I want to see in a stock! That tells me more people want to own it than sell it. I then proceeded to buy ANOTHER 1000 shares (breaking my own set amount) when it jumped up another $10 a share. WTF!! It's acting way better than what I had hoped for.

Now -- the other side of that coin is --- IMHO it went too far too fast -- and I sold it for a nice $40,000 profit on my $100,000 purchase price. That's a pigs get fat hogs get slaughtered scenario... but that's a whole different post. My point is I was NOT afraid because the market was up... in fact - I'd bought even more!

Will the market be lower at some point if you bought today.... maybe. But we're not really worried about that because we're buying good stuff -- that pays a decent rate of return -- and we should have TIME on our side (this shouldn't be money you'll need next week or next year).

Waiting to "get in" is only a feel good temporary rush. But if you'd waited to get in the market last year -- you lost out on about a 30% gain. Again - making that 10% down move look pretty small in comparison.

If it makes you feel better -- then average in. Pick a date -- and get that money to work. Vacation is OVER.
More info I average in bi monthly with purchases 24 times a year in my vanguard mutual fund accounts... The big chunk is a result of some stock based compensation via my employer I cached out roughly 50 percent of the vested and have more vesting over the next year so I cashed out to reduce risk of having that money in one stock. So now I have a lump of cash to invest if I find good candidates

[GregWeld]

Depends on the "amount" of cash, I have frittered away any chance at making money WITH my money for that same amount of time at .001% in a useless savings account (because I was a chickensh*t). Well, enough is enough, changes are coming to our household finances for 2014......and I'm not getting any younger either!!! :bang:




Hey --- If you'd have just followed the Great Siegymeister in 2013 --- you'd be 33% richer!


OMG.... so simple.

[GregWeld]

More info I average in bi monthly with purchases 24 times a year in my vanguard mutual fund accounts... The big chunk is a result of some stock based compensation via my employer I cached out roughly 50 percent of the vested and have more vesting over the next year so I cashed out to reduce risk of having that money in one stock. So now I have a lump of cash to invest if I find good candidates



I love stock options! It's free money!


Did I ever write about my 20 million dollar Grand Banks?? LOL ---- oh long story... or the 30 million dollar house I bought for 177 grand?


Goes back to my wife being a Director level at Microsoft beginning in 1984... and me being the safe one -- I wanted to pay cash for stuff... and the stock options were free money. Better to have a paid for house and boat than to have that stuff and watch the stock go in the tank... so I sold along the way. Well -- that made me miss out on the 10,000% gains those shares had. Mind you -- we had a couple million shares... so I didn't exactly go broke with that strategy either. LOL


Remember something about OPTIONS -- they're PURE INCOME -- and when you sell -- that amount is added to your income -- and you owe taxes on that - as well as the higher tax rate on all the other income in your household. So be certain to "account" for that hit. Best course of action there is to have them withhold max bracket rate --- and get a nice check back --- rather than owe huge and have to sell another batch to pay the taxes with - which adds to your income the following year and down that path you go. Trust me on this one.

[protour73]

Hey --- If you'd have just followed the Great Siegymeister in 2013 --- you'd be 33% richer!


OMG.... so simple.yes, yes, yes.... well let me tell you Greg, if you smack a rock hard enough, over and over, eventually it will crack!! (that's a metaphor, for my skull) :twak: :headscratch: :knokwood: :lolhit:

[protour73]

ok, so now that the rock is split open (my skull) and I am making the investment move. The questions are bubbling to the top!!

I am already convinced that I want to purchase stocks, I have a list that I have been watching......HOWEVER, The company I work for offers a 401K to which they match .50 cents on the dollar up to 6% of my salary.

How do you say no to that "free money" if one does not believe that mutual funds are the way to invest? :stirthepot:

[rocketrod]

....
I am already convinced that I want to purchase stocks, I have a list that I have been watching......HOWEVER, The company I work for offers a 401K to which they match .50 cents on the dollar up to 6% of my salary.

How do you say no to that "free money" if one does not believe that mutual funds are the way to invest? :stirthepot:
You don't.....the free money is a guaranteed 50% returned even if it has to be invested in mutual funds, it's too good to pass up. My 401k is the same way, but I just ensure I diversify my $$ across multiple funds, just like I do with stocks. Just make sure you research the fees the mutual funds in your 401k charge as they can vary drastically.

[im4u2nvss]

How do you say no to that "free money" if one does not believe that mutual funds are the way to invest? :stirthepot:

You must take the free money! 50% gain on your 6% contribution. I never say no to guaranteed free money.

[WSSix]

Take the 50% match at minimum to the maximum of the match. Be sure to then select a diversified investment option with the company managing the 401k. For me, Fidelity is the brokerage company that manages my company's 401k. I can't pick individual stocks as an option. So the option I chose was the targeted retirement option. I could have done large cap, small cap, foreign, etc.

[Sieg]

Hey --- If you'd have just followed the Great Siegymeister in 2013 --- you'd be 33% richer!

OMG.... so simple.

Take note that GW DIDN'T say......... so smart. :sieg:

[protour73]

Take the 50% match at minimum to the maximum of the match. Be sure to then select a diversified investment option with the company managing the 401k. For me, Fidelity is the brokerage company that manages my company's 401k. I can't pick individual stocks as an option. So the option I chose was the targeted retirement option. I could have done large cap, small cap, foreign, etc.Trey, ours is Fidelity as well.

I think my age would favor large cap funds, and small cap funds tend to have higher fees as well as being more volatile. IMHO

[GregWeld]

Well I would have to disagree with those that say the 6% match is "FREE" money... because it depends what the investment is in. Pouring money into a POS fund is LOSING money big time... or loss of opportunity. So it's not really free... and in fact could cost you HUGE.

Ordinarily it is a good choice because people that choose it aren't good savers/investors in the first place... and at least this gets them something. And it's taken out of your check PRE tax... which is another good thing....

But don't just take this at face value. Do a bit of work before you make these kinds of choices. You may be able to do FAR better on your own - than the so called "free money".

Many times the choices inside these company plans are watered down so that the "fiduciary responsibility" of the management is protected... they're far more interested in you not losing very much as opposed to you making a killing.

[GregWeld]

Trey, ours is Fidelity as well.

I think my age would favor large cap funds, and small cap funds tend to have higher fees as well as being more volatile. IMHO



I have no clue what your age is.... but the younger you are the more risk you should be taking because while something might be more volatile -- that means they're usually also highest growth when things are going great... The Russell 2000 Small Cap index was up about 46% this year... do that once or twice and you have a double real quick. If you've doubled and then you go down 20% from the double - who cares... so it all depends on your age.

[protour73]

I have no clue what your age is.... but the younger you are the more risk you should be taking because while something might be more volatile -- that means they're usually also highest growth when things are going great... The Russell 2000 Small Cap index was up about 46% this year... do that once or twice and you have a double real quick. If you've doubled and then you go down 20% from the double - who cares... so it all depends on your age.Closer to your age than you know!! :unibrow:
Truth be told, 55




Well I would have to disagree with those that say the 6% match is "FREE" money... because it depends what the investment is in. Pouring money into a POS fund is LOSING money big time... or loss of opportunity. So it's not really free... and in fact could cost you HUGE.

Reading as much as I have in this thread, I had a hunch you'd take that stance...... I also wonder what their "fees" usually amount to annually?? Which has the effect of taking away from the company's "match" money
--------------------------------------------------------------
Actually it's = my company kicks in .50 cents for every dollar I invest...up to a max of 6% of my salary.

[WSSix]

I have both Vanguard accounts and Fidelity accounts. I think Fidelity's website is laid out better and easier to navigate. You may want to consider them even if you don't go with the 401k through your company. Keep in mind that a Roth IRA is available to you if you are below the income limit.

I'm not sure if I'm limited on my choices because Fidelity says so if because my employer doesn't have it set up that way. I just know in may case that I have a good number of options inside the 401k to choose from. Hopefully that's the case with your company as well.

[GregWeld]

Closer to your age than you know!! :unibrow:
Truth be told, 55




Well -- like I always say --- sucks to be you! LOL

So 10 years to retirement -- then live another 20 plus -- so that's 30 friggin years!




Reading as much as I have in this thread, I had a hunch you'd take that stance...... I also wonder what their "fees" usually amount to annually?? Which has the effect of taking away from the company's "match" money
--------------------------------------------------------------
Actually it's = my company kicks in .50 cents for every dollar I invest...up to a max of 6% of my salary.





It's a nice match -- and MOSTLY makes sense to join that pool --- just do a minimum of research to see what you can invest in --- and adjust accordingly.

[rocketrod]

reurtWell I would have to disagree with those that say the 6% match is "FREE" money... because it depends what the investment is in. Pouring money into a POS fund is LOSING money big time... or loss of opportunity. So it's not really free... and in fact could cost you HUGE.

I hear what your saying, but what your talking about is an extreme/rare instance. It is still an immediate 50% return on investment ("FREE").......it doesn't get any better, period. With my 401k I get the 50% match regardless of what I contribute to and I can move the money to any of the funds available.

[GregWeld]

reurt
I hear what your saying, but what your talking about is an extreme/rare instance. It is still an immediate 50% return on investment ("FREE").......it doesn't get any better, period. With my 401k I get the 50% match regardless of what I contribute to and I can move the money to any of the funds available.

Lots of unknowing people put their IRA's into BOND FUNDS ------ and that's the kind of thing I'm talking about --- no matter WHAT --- you MUST understand and learn what you're doing or the match is wasted - as is the time it took to accumulate some money etc. People just seem to fall asleep when it comes to investing and THINK that because they're in a 401K all is right with the world.

[rocketrod]

Lots of unknowing people put their IRA's into BOND FUNDS ------ and that's the kind of thing I'm talking about --- no matter WHAT --- you MUST understand and learn what you're doing or the match is wasted - as is the time it took to accumulate some money etc. People just seem to fall asleep when it comes to investing and THINK that because they're in a 401K all is right with the world.
What your saying is a given......if you don't know what your investing in you shouldn't be. As a general rule the 50% match is a no brainer.

[redefined]

I'm 7 pages into a 358 page thread. So far it's awesome and I can't wait to read it all! So many pages to go, forums rock my world. A car forum and a thread on investing, but this time it's someone that actually knows what they are doing. Gotta love it! I'm going to need some coffee!

I'm 30 yrs old and have a good head on my shoulders as far as money goes. Sadly my wife and I haven't saved what we'd like to but we have Roth accounts and a business and I have a solid job with Deloitte. Currently I want to invest to save for retirement, save a boat load of money for our second house to buy in 2-3 years and pay off my school loans - went back to school and graduated in 2013 yay!

IRA/Roth is good and this thread is very informative and just helps to drill down into the basics. Where I struggle is picking those 'big name big cap stocks that pay you a dividend' and finding the info on the company to answer the questions of what type if dividend, large or small, and to know enough about their business and what it means if the stock cut in half. Do I buy more if it cuts in half? What determines that? Does it count on a retail customer to support their business and drive the stock? I don't trust most people so that's probably a bad idea, or is it?

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo! :G-Dub:

[GregWeld]

I'm 7 pages into a 358 page thread. So far it's awesome and I can't wait to read it all! So many pages to go, forums rock my world. A car forum and a thread on investing, but this time it's someone that actually knows what they are doing. Gotta love it! I'm going to need some coffee!

I'm 30 yrs old and have a good head on my shoulders as far as money goes. Sadly my wife and I haven't saved what we'd like to but we have Roth accounts and a business and I have a solid job with Deloitte. Currently I want to invest to save for retirement, save a boat load of money for our second house to buy in 2-3 years and pay off my school loans - went back to school and graduated in 2013 yay!

IRA/Roth is good and this thread is very informative and just helps to drill down into the basics. Where I struggle is picking those 'big name big cap stocks that pay you a dividend' and finding the info on the company to answer the questions of what type if dividend, large or small, and to know enough about their business and what it means if the stock cut in half. Do I buy more if it cuts in half? What determines that? Does it count on a retail customer to support their business and drive the stock? I don't trust most people so that's probably a bad idea, or is it?

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo! :G-Dub:




Well - - first off thank you.


Secondly -- you have a good amount of time on your side... so if you get started you'll have a nice retirement.


Third -- Yeah - the thread has grown a bit -- but much of it is repeated info - so you'll have to learn to skip when it gets repetitive.


Fourth -- It doesn't take much to open a discount brokerage account -- and that's where you'll find a lot of info on what you're missing --- i.e., the dividend etc. But you can also get a lot of that info right on Google Finance -- and I'm sure Yahoo Finance etc.


Fifth -- It sounds good to say -- but stock don't ordinarily or regularly get "cut in half". 10% is considered bear market territory... and 20% is huge... and then that's what you'll learn by sticking with the reading of the thread -- you'll be averaging down and buying more shares when the stocks are low as compared to when they're higher priced. Trust me - stick with it - and you'll get a handle on all of how that looks.


Sixth -- Again - if you stick with the homework here - a lot of how you choose stocks -- is explained in the thread. It's really basic basic thinking - not rocket science -- and will serve you well especially given your age. You'll learn about total return -- dividend investing - investing in things you can understand and or use or recognize the companies that you do business with.

Glad to have you on board!


And don't sell the car -- but do share the "expense" with the "investing" side -- and you can do both...

[WSSix]

Back to reading and many thanks to you Greg. Sadly since I don't have the buckets and buckets of money that some do, when I get into the mood of investing and saving it makes me want to sell everything and just save save save. '68 Camaro for sale? Haha, noooo! :G-Dub:

Since that's the case, spend your money on building the brakes and suspension and not replacing a good engine with another good engine that just happens to make more power. You're in the ATL metro area. You will never be able to truly run with the power guys in the area so be cooler than them. A thumping 68 that can handle will turn more heads than an M5 and be way more unique.

Concentrate on maxing both you and your wife's Roths out. Until you get a better understanding of stock selection etc, you can have the money in a targeted retirement account within the Roth IRA. Do you know what the money in your Roth is currently being invested in?

Good luck. Glad you're getting something out of this thread too.

[Sieg]

I'm 30 yrs old and have a good head on my shoulders as far as money goes.

That's all you need!

I'm 55 and committed to investing in 1999. Though I didn't have the wisdom shared in this thread to save me from a few mistakes which when you apply compounding to those losses it would make a substantial (probably $50K) difference to my current portfolio.

You might consider opening a Schwab or other account and buy a few shares (10 or so) of a few solid name dividend stocks in different sectors reinvesting dividends just to get your feet wet and give you a feel for the game so to speak. Then watch what happens on a small scale to get you familiar and comfortable with the procedures.

Combine the additional 10 years you have on me and the knowledge shared here and you'll be looking good at age 55........if you don't get greedy! :thumbsup:

[redefined]

Years ago I messed around with some trading and had a Scottrade account. Nothing is in it that account now, also have Fidelity and Vanguard but the Fidelity will be merged over into Vanguard shortly - for independence related work reasons. That being said maybe I'll open one up here, thought I'm not sure of any local - doh! I know there are both Scottrade and Fidelity close ha.

Greg do you pay attention to the P/E much when you're looking for a new stock? Or even though it gives a sign into what the investors are thinking is it the same as 'water cooler' chat at the office, if the P/E is to high you might be to late? Or is P/E more for the day trader type?

Oh and my current Roth IRA is in - American Funds The Growth Fund of America A (MUTF:AGTHX) with the following the top 10 holdings (most don't fit the mold of what's talked about in this thread - no dividends!):

Security Net Assets
Gilead Sciences Inc (GILD) 4.13%
Amazon.com Inc (AMZN) 4.00%
Google, Inc. Class A (GOOG) 3.36%
Home Depot, Inc. (HD) 2.36%
EOG Resources (EOG) 2.05%
UnitedHealth Group Inc (UNH) 1.61%
Philip Morris International, Inc. (PM) 1.53%
SOFTBANK Corp (SFTBF) 1.50%
Nike, Inc. Class B (NKE) 1.46%
Comcast Corp Class A (CMCSA) 1.42%

WSSix - that's the problem, it doesn't NEED anything! :buttkick: It has suspension and motor and... and.. and.. haha. It just doesn't have everything I WANT done to it. I think what I'll end up doing for now is ditching the leafs, even though aftermarket upgrades, for a 4 link and mini-tub along with a good tune for the motor/carb and call it a day! For now at least. We need/want to build a new house within 3 years that will have a nice workshop/garage so that's #1 on the 'spend money' list!

But back on topic!!! I just sold a set of wheels I had sitting around in the garage and currently have one of my guns for sale. Soon as that sells maybe I'll toss it towards some of these stocks that have been talked about here and use some on the mods mentioned above. :popcorn2:

[GregWeld]

American Growth (AGTHX) - the mutual fund you mention you have --- has a 5.75% FRONT LOAD --- which is a BS word for "commission". Gawd I hate Mutual Funds... and the horse they rode in on.


And it had a pretty good year this year -- however - it's 10 year average is only just that - average - @ 7.94%


It's not a bad fund -- it's just average -- and in a bad year such as 2008 - it was down damn near 40%... but everything was crushed then so it just went along for the ride.


RE: P/E -- that's just ONE metric.... and is rather useless IMHO and that's why what's the most important metric you'll hear me beat into everyone around here is TOTAL RETURN -- who cares how it got there and why and what all the other pretty little numbers are ---- the big question is DID I MAKE MONEY ON MY MONEY AND IF SO - HOW MUCH. If you have a 5 year Total Return number that's over 100% --- you doubled your money in 5 years.... That's an important number.

[redefined]

Where do you see a companies Total Return?

For a 401k/Roth through an employer it seems the only options are mutual funds, pick one, am I wrong? Vanguard is the one I'm in the process of signing up with. Not sure I see another option other than funds/trust/bond.

I also use a Fidelity AMEX credit card. Every looked into it? It's nifty, instead of getting points that you can blow on the newest iPad or Skymiles program it places money directly into your Fidelity investment account. The more I spend the more I invest in myself! yay! :lol:

[GregWeld]

Where do you see a companies Total Return?

For a 401k/Roth through an employer it seems the only options are mutual funds, pick one, am I wrong? Vanguard is the one I'm in the process of signing up with. Not sure I see another option other than funds/trust/bond.

I also use a Fidelity AMEX credit card. Every looked into it? It's nifty, instead of getting points that you can blow on the newest iPad or Skymiles program it places money directly into your Fidelity investment account. The more I spend the more I invest in myself! yay! :lol:



I use Schwab and they have a page for it... not sure where your accounts are or where you could see that very important historical information but I'd ask someone wherever you hold accounts -- and or have online availability.

[Vortech404]

If you go to www.dividendinvestor.com put in the stock ticker
And read the bottom 3 lines and in will tell you 12 month,3 year and
5 year total return.

John

[68ZClone]

For any time period:

http://buyupside.com/stockreturncalculator/stockreturncalcinput.php

[GregWeld]

If you go to www.dividendinvestor.com put in the stock ticker
And read the bottom 3 lines and in will tell you 12 month,3 year and
5 year total return.

John



Doesn't get much simpler than that! Thank you.

[XLexusTech]

I know Greg and others are not big fans of managed funds.. I get why, many are basically ways for the big investment houses to use your $$ to take fees..... however they are not all bad.. their are a few that are really good options for the inactive investor..

How about VFIAX for example... super low expense ratio... and yield and growth pretty damn good.. just throwing it out there its one of my staples and for those with some $$ they want to put in without much risk.. a good fund should be on the option list.. theoretically you could do this yourself.. but with this low of a cost.. why bother...

I am pretty deep into this kind of investment.. I am now looking for other options (read looking for income/growth stocks) but i wanted to put this out there for others..

1 Year 32.33
3 Year 16.14
5 Year 17.94
10 Year 7.39
Since Inception 4.41
11/13/2000
500 Index Fund Adm 32.33% 16.14% 17.94% 7.39% 4.41%

[GregWeld]

So here's why this kind of stock/fund/bond recommendation is so difficult.


The fund you mention (VFIAX) has a minimum buy in of $2500 and 500 minimum for adding to that fund. Further --- if it's in a Company managed 401 it might not even be available as an option.


That's not to say it's good, bad, or indifferent.... I'm just saying that people will run around looking up someone else's recommendation --- get all set to put that on their list - only to find out that they missed some very critical details..... such as the 2500 minimum basic investment. It can be lower than that if it's inside an IRA then it has a 1000 minimum -- and then 500 subsequent investment.

Many "funds" are also "closed end" --- they're CLOSED to outside investors - even though you can find all manor of information about them as if you could actually invest in them.

So these things are better left to be used as a good examples ---- versus a "buy this it's great" idea. Yeah - it might be great... but it also just might be completely made out of unobtainium.... LOL

I believe this particular fund is closed except to people that are already invested in it. Given that it's "status" is "Available to existing shareholders".

[GregWeld]

So let me further explain my "disdain" for Funds.... The above mentioned fund has a "decent" performance. It almost mirrors the S&P500 --- almost exactly --- usually the S&P 500 is what fund managers are looking to "BEAT" --- otherwise they're just considered average and they get looking for work...


All a person has to do -- is to look at the holdings of this fund --- and duplicate it's top ten holdings (if you have that kind of funds to invest)... and you can do so with NO FEES of any kind... no minimums... it's open to anyone at any time - and you can choose to re-invest the dividends or just have them put as cash into your account... in other words -- you can build this same fund --- and have some control over what you want to do and how.... and there's no "expense" associated with it. So then - why just buy a "fund".


Here's their top ten holdings....



AAPL
Apple Inc
Computers & Peripherals


XOM
Exxon Mobil Corporation
Oil, Gas & Consumable Fuels

GOOG
Google, Inc. Class A
Internet Software & Services

MSFT
Microsoft Corporation
Software

GE
General Electric Co
Industrial Conglomerates

JNJ
Johnson & Johnson
Pharmaceuticals

CVX
Chevron Corp
Oil, Gas & Consumable Fuels

PG
Procter & Gamble Co
Household Products

JPM
JPMorgan Chase & Co
Diversified Financial Services

WFC
Wells Fargo & Co
Commercial Banks



So here's my point ---- they probably have 100 plus companies in this fund --- but my guess is that the top ten did all the heavy lifting (performance) and the bottom 20 pull their averages down... so why have the bottom 20 in your portfolio?? Most funds are just giant pools of "average". We strive to be better than average don't we??

So here's another "issue" I have with INVESTING 102 and funds... and that's the research and the details. Now -- I've been doing this a long time --- and I can sort thru lists and details and pick stuff apart in a nanosecond... but I'm not so sure a lot of you can do this and might get fooled by the big numbers and not parse out the larger details. So for example I just did a sort research via Schwab for all the MORNINGSTAR 4 star rated funds.. and then I sorted them by "returns since inception" ----- killer! I should get a list of the very best returns right? So the top one has a 20% "return since inception".... holy cow -- I want in that bad boy -- it's killing it. Well -- but it only started in 2009 --- right when the market turned UP -- and actually - 20% since then is pretty average performance. The "since inception date" is very small --- and how many would have picked up on that?

Then --- once you start to have money in 4 or 5 funds ---- what's your overlap?? How many are going to go look at what the fun is made up of. Microsoft can be in a TECH fund -- it can also be in an S&P Large Cap fund -- or a Large cap blend fund... so while you'd think you were "diversified" you may in fact have a bunch of duplication.

So for me --- funds are "fine" if that's all you have available to you -- and you just want to be investing thru work.... and you don't want to do a dang thing for yourself. But that's why we have 360 pages of posts here... it's about doing a minimum amount of work (which is actually fun -- it's really more like shopping) and building your own "mini fund".

[glassman]

And thats why its called "working smarter, not harder..."

[XLexusTech]

well let me put real time facts to my position on funds. in 10 years I am up 30+ on my funds.. includes deducting for expense fees.. (for which i keep my ratio below .10%)
this is not employee sponsored but post tax cash investment. ANYONE can do this.. the fund I quoted is an Admiral fund the same fund non Adminral VFINX has a 3K minimum investment and a slightly higher fee...all of my funds started at between 100-3K as NON admiral... and i moved them into admiral as they grew.

My point is that Funds can and should be part of a smart portfolio.

I have another pure stock account were i apply the principles here.. several DRIPS all smart names.. APPL, JNJ, KO, MCD XOM, CVX and so on... over the same period its up 17%.

then i have Gamblers... FB... for example which to date are doing real well for me.
My point here really is... in my opinion its a portfolio that has the principles of good funds+ individual stocks which are solid DRIPs and shooting star throw aways money looking for a good run.. is the way to go for me..

[GregWeld]

I don't want this to seem like an argument - which it isn't... as usual -- I must respond to EVERYONE that's reading these posts so that they can make sense of them for themselves. They're just merely "food for thought" rather than "YOU SHOULD BE DOING X" or "YOU'RE WRONG". Not my intent here at all.


Having said the above --- You bolstered what I said by posting your "other holdings" --- which closely DUPLICATE the holdings in the fund we were discussing. That's NOT diversification --- thats just duplication. And this is the point I was making about holding MUTUAL FUNDS without doing the underlying research to see what they're made up of.

Like most investments -- a few make up for the many. A couple good holdings in a basket of 10 plus -- will pull the wagon as far as "group" performance. If you had Five stocks - Apple being one of them - over the last 5 years - Apple would more than make up for two of the five being losers. The key to investing is to be on top of your investments enough to have fewer losers and have at least one or two winners -- and the middle being stuff that's "average" (generally the steady eddies).

But if you're duplicating investments - you're just generally going all in on just a few names. It's akin to buying all your rental property in one neighborhood.
That's where "THE WORK" comes in to the equation... people get lazy and don't stay abreast of what all makes up their funds etc... and then find themselves "stuck" five years down the road in investments that have just performed so so.

The fund you mentioned sole goal is to duplicate the S&P 500 index. If you want to just do what the S&P 500 index does --- just buy it! It trades as the SPY.... That way you'll be assured that you'll at least equal that index.

But there's not much reason to just buy the SPY and then go and duplicate many of what makes up that index - in individual names. Does this make sense??













well let me put real time facts to my position on funds. in 10 years I am up 30+ on my funds.. includes deducting for expense fees.. (for which i keep my ratio below .10%)
this is not employee sponsored but post tax cash investment. ANYONE can do this.. the fund I quoted is an Admiral fund the same fund non Adminral VFINX has a 3K minimum investment and a slightly higher fee...all of my funds started at between 100-3K as NON admiral... and i moved them into admiral as they grew.

My point is that Funds can and should be part of a smart portfolio.

I have another pure stock account were i apply the principles here.. several DRIPS all smart names.. APPL, JNJ, KO, MCD XOM, CVX and so on... over the same period its up 17%.

then i have Gamblers... FB... for example which to date are doing real well for me.
My point here really is... in my opinion its a portfolio that has the principles of good funds+ individual stocks which are solid DRIPs and shooting star throw aways money looking for a good run.. is the way to go for me..

[XLexusTech]

Discussion is never argument.

Here is why i go the route I do... the 100 other stocks in the fun offer me some risk mitigation , the fund allows me to "Set it and forget it" and never look at it..

The individual stock Drips allow me to trickle in directly thereby managing the total cost whilst providing me the ability to Punch out of the individual stock at any time and buy it back at any time.

Its that flexibility and risk limiting factor that for me supports the logic of owning an SP INDEX FUND and some of the same stocks in that INDEX individually

Think of this, I am applying both the "Lazy portfolio" Approach and the active trading approach at the same time... taking the benefits of each.
:thumbsup:

[GregWeld]

I have always said that everyone needs to do what makes THEM feel comfortable and that is style and choices of investments.... I'm never a guy that will say you should only do things my way....

I just wanted readers to understand WHY I was saying what I was saying.... not in a defensive way --- just as an explanation.

I had breakfast the other day with a retired accountant buddy - he was a managing partner at KPMG -- his wife is a retired CFO... both should understand investments and money and compounding... They're pretty well healed. Then he tells me his "money managers" have him in about 30% bonds which he tells me has just taken a huge hit... but that now he doesn't want to sell at a loss.... My question to him was why the hell does he think these people are worth what he's paying them? I sold my bonds months ago AHEAD of the impending interest rate rise and made a very handsome gain on them...

So much for "professional" money managers. And my buddy should just be embarrassed as hell to even mention that he's not smart enough to manage his own money -- or care enough is really what it boils down to. When I asked him if his money was UP 29 to 30% this year... he could only look down and say "well their strategy has me in pretty safe stuff" --- then I reminded him of his bonds and asked how safe those were??

UGH!!











Discussion is never argument.

Here is why i go the route I do... the 100 other stocks in the fun offer me some risk mitigation , the fund allows me to "Set it and forget it" and never look at it..

The individual stock Drips allow me to trickle in directly thereby managing the total cost whilst providing me the ability to Punch out of the individual stock at any time and buy it back at any time.

Its that flexibility and risk limiting factor that for me supports the logic of owning an SP INDEX FUND and some of the same stocks in that INDEX individually

Think of this, I am applying both the "Lazy portfolio" Approach and the active trading approach at the same time... taking the benefits of each.
:thumbsup:

[XLexusTech]

Yes anyone investing that doesn't correlate interest rates and Bonds is pretty far behind the curve.. knowing the rates have nowhere to go but up sitting on Bonds is pretty clear cut bad decision for the foreseeable future .. ....

[GregWeld]

Yes anyone investing that doesn't correlate interest rates and Bonds is pretty far behind the curve.. knowing the rates have nowhere to go but up sitting on Bonds is pretty clear cut bad decision for the foreseeable future .. ....



Amazing isn't it!! A partner in KPMG (retired) and a CFO... you'd think that money management would not only come easy -- but be massively important. Like I said to him -- gee -- I'm glad I don't have enough money to need a professional manager! <knowing that he knows I have triple his net worth!> Okay - yeah it was a dagger in the back. But hey! What are friends for???

[SSLance]

I'm not posting this to agree or disagree with anything said above, but in regards to loads and funds...some investment houses have vehicles to get around those.

At Merrill Lynch for example, you can buy into a fund that may or may not have a front load and not pay any of the load as long as you hold it for at least a year. I believe they get around this because Merrill will buy X amount of those shares from the fund and then buy or sell them to their clients after. They probably also get a break on the load from the funds themselves for being such a large player.

Now, regarding the types of investment accounts you can have at Merrill. You can be in a non-managed account, without any fees...but you will pay a high commission on equity stock trades. You can buy into most funds inside these accounts though...without paying a load if you hold it for at least a year. I don't remember the last time I paid any sort of commission or load on a mutual fund in my Merrill accounts.

Or...you can be in a managed type account where you do pay a fee every quarter based on the value of your total account...get free trades and free buys or sells of mutual funds with no loads. I think the last managed account plan I was in had a 1.5% yearly fee. Your Financial Advisor will completely manage your account for you or you can be very active in the buy\sell decisions in this type of account...your call. Typically in this scenario you don't get a FA that runs you in and out of equities all the time because he doesn't get paid on the trades made, he gets paid more from your account the larger he makes the account grow.

If you were going to have your portfolio totally self directed, Greg's example of a discount investment account at Schwab and buying the equities directly that most funds hold large stakes in is the most efficient way to do this...but you have to remember to be in total control of all of the buy\sell decisions and stay on top of it. It isn't a set it and forget vehicle.

If you wanted to let the money managers do what they do and participate in funds instead, an investment account at a larger house can be efficient in this manner if you can get around the loads as described above and not pay fees on the value of the account. Keep in mind though that the money managers running the funds do need to get paid and this happens from the expenses that come right off the top of the funds before any gains or losses trickle down to the fund holders. Some funds are better about this than others, research is again key.

I have had the opportunity in the last 7-8 years to watch some very high end Financial Advisors...and the different strategies they take. One in particular that is becoming somewhat of a regular appearer on WSJ, Fox Business News etc. It is amazing to me that he isn't much of a stock picker at all. About 90% of his portfolios are built around index funds. He tax harvests regularly, re-adjusts portfolios based on asset class, and buys and holds while reinvesting dividends much like what is talked about here...but all in pretty much Index ETF types of funds. It is interesting to watch and he has done very well over the years, even after the 2% a year he charges his clients.

[GregWeld]

Let's be very clear here ---- Nobody is going to be on a fee managed account anywhere, without having a rather substantial amount of money to plunk into an account. They're not offering fee based accounts to people with 5 grand to invest...


I know this because I have fee based accounts with at least TWO different large institutional investment firms. One is a hedge fund - we won't even get in to that kind of investing here.


Here is something you may want to read...



If you have $10,000, you can open an account at, say, Morgan Stanley, a prototypical full-service brokerage. You’ll work with a broker, who, for a fee of up to 2% of assets annually, will provide guidance on mutual fund investments. But to get more-comprehensive advice at Morgan Stanley—from an adviser who offers a range of services, from investing guidance to retirement and estate planning to banking services—you need at least $100,000. Fees are negotiable and may include commissions on investments, asset-based advisory charges or both. At Merrill Lynch, you’d need at least $250,000 to access that level of service.


Now --- I have a rather large "estate" and have professionals on many different levels from trust accounts on up. I can tell you that most of these "pros" are 30 something folks that are mostly wet behind the ears, they're all "VP's" and when you drill down on them -- they don't know very much except that they can read the "reports" from the analysts in their respective firm. What I LOVE TO DO is to have one of my "team" call and give me some sage advice. I usually then hang up the phone and call my other firm and say --- hey! I was thinking about doing "X" (using the information I just received from broker A)... most of the time - brokerage B has a completely different and opposing view. I have my own view - which is generally not to take either ones advice and do something (If I choose to do anything) in the middle... Broker B was insistent that I continue to hold the 4 million laddered bond portfolio they had built for me (fee managed @ .75% at that level) I owned stocks in this account as well. Thank gawd I knew more than they did and sold the entire portfolio and then closed that account. It saved me at least a half a million bucks, perhaps MORE than that if you figure in the gain I took that I would have otherwise lost and add it to the loss of holding til today. They were FIRED. He was a Senior VP and personal friend. In fact - I wouldn't even let them sell the bonds - I just transferred them lock stock and barrel over to another account and sold them via Schwab (I have 4 accounts just as schwab).

The key to paying FEES of any kind is whether or not you are willing to abdicate decision making to someone else. Because they really are just "selling" their advice. Supposedly educated advice - and they have all manor of people doing lots and lots of analysis. But what you're really looking for then -- is that they can do a better job than you can. I'm good with that! Nothing wrong with that -- but then I demand all manor of other services and features and entrance to investment vehicles for my fee. I get away with that because they'll kiss my butt to infinity if that's what I ask for.... I get free tickets to all kinds of stuff - golf events - pro sports - fancy dinners - and entry to things I otherwise would have no access to at all. For instance -- I just borrowed 5 million dollars -- at 2%. CASH. I can do anything I want with it - no questions asked. How many of you can do that?? That's worth a management fee to me.

But if you're investing 10 grand a year -- and have under 100K invested -- and are expecting to make an 5% ANNUAL dividend -- and the "market" is on average growing 9% per year -- then paying someone 2% looks mighty expensive to me... And that 2% is whether you have an up year or a down year. Let me tell ya -- when you're down 15% and then pay 2% (Cash mind you!) for them to "manage" your account -- you're not going to be a happy camper.

What most people do is pay a fee based firm TO BEAT the average market... Do you understand that "beating the market" also means that if the market is DOWN 12% and they are ONLY down 10% this means they "beat the market"! You also pay a fee for the access to info - and to basically NOT have to do much thinking. The minute you let someone else run things -- your interest drops just about to zero. The next time you have any interest is when you get a statement that shows you LOST MONEY.... and all of a sudden you get REAL INTERESTED. But by then - it's too late - and they always have a reason. My point is and always will be on this issue ---- That it isn't that hard to do most of this ---- and the thread was about learning how to do it on your own because it isn't hard to figure out. If it's not worth your time -- then when your "broker" calls and advises you -- how would you know if he's right or wrong -- or even if you should say yeah "go ahead" or "no - let me look into that"?


Just sayin'.

[GregWeld]

Let me share some investment "advice" (sales pitch is a better description) from one of my brokerages I just received today as a matter of fact. And YES I actually read all the crap they send me. I like this stuff -- I have lots of time -- I'm actually pretty damn good at it too!


Listen to this drivel.... from a FEE BASED FIRM....


Focus List

Focus List Addition: Follow-on Report

• On December 17, we added Teva Pharmaceutical Industries (TEVA) to the Focus List with a Buy rating and $48 price target. Teva is based in Israel and is the world’s largest generic drug manufacturer. Consensus earnings estimates are $4.66 for 2014 and $4.64 in 2015. Our price target is based on 12x a worst-case earnings estimate of $4.00 per share for 2015.

• Teva is dealing with drug patent expirations, revenue concentration, an abrupt CEO resignation, Israeli tax issues, and a questionable growth trajectory.We believe current levels offer an attractive entry point for patient, contrarian investors.We believe Teva’s problems are well understood and that the stock should outperform once we pass the generitization of Copaxone―Teva’s largest drug at 60% of operating profits. Our $4.00 worst-case 2015 EPS estimate assumes a 60% loss of the Copaxone franchise while taking into account Teva’s ability to cut costs and restructure.

• Jeremy Levin recently resigned as CEO, due to what we believe was a board-level fight over his strategic plan. We feel that Chairman of the Board Philip Frost has been the de facto head of the company for some time and provides continuity. Mr. Frost is one of Teva’s top shareholders, and we feel his interests are aligned with those of other shareholders.

• The Copaxone patent expiration is a serious challenge for Teva and a risk to Street estimates. We believe that the bear case has been priced into the stock, and realistic worst-case earnings will be closer to $4.00 and any pullback in the stock will be short-lived. The extent of the threat to the Copaxone franchise should become clearer in May 2014, and clarity should alleviate pressure on valuation. We believe investors have already assumed the bear-case and we recommend positions be built as the company takes steps to reduce costs and reposition itself for future growth.

• Investment risks include revenue loss due to patent expirations, failure to get FDA approvals for new drugs, and other regulatory, operational and financial risks resulting from the global nature of Teva’s business.

Share price at time research report was published: $40.26 (1/02/2014 closing price); Share price at time Week in Review was published: $39.88 (1/03/2014 closing price)



So here's what I got out of reading this:


They are GUESSING that maybe the price will grow to a particular number... big whoop. I hope ALL of my stocks GROW -- if I didn't think they would -- I wouldn't have bought them!!


This is a drug company -- they a have SINGLE product which they are relying on for 60% of their sales!!! Which is about to EXPIRE.

TEVA is a CONTRARIAN investment -- that means that everyone else is WRONG and you're eventually going to be right -- because CONTRARIAN means you're betting against the grain! BETTING ='s GAMBLING. I'm betting everyone else is WRONG -- I'm going to buy low because nobody else wants the stuff --- and I'm hoping they're wrong and I'm right, and I'm going to be a winner. Ya know what? I think the same way when I'm buying a lottery ticket ---- the other 15 million people buying are suckers and my $2 ticket is the winner. So far - I haven't won. CRAP. Oh well.... maybe next time.


That last paragraph is legal mumbo jumbo telling you that when you follow the advice of this broker -- he might just be wrong -- BUT HEY! He told you it was risky so hold on to your hat sucker!



THIS IS THE KIND OF BULL CRAP YOU GET FOR YOUR 2% FEE..... I read it and toss 99% of it in the trash.

[GregWeld]

Now -- here's another absolute NO NO -- don't let me catch ANY OF YOU investing ANYTHING with one of these INDEPENDENT FINANCIAL ADVISORS!!

So help me gawd -- I'll find out and I'll track you down and feed you thru your carburetor!! LOL


Seriously -- this butthole -- is doing 10 years in the Federal Correction facility in Sheridan Oregon... he WAS a big time car collector. He bought one of my '67 Corvettes... the one I frequently post photos of (because I actually had digital pics of it!).... and he had at least 40 or 50 cars!

When I would talk to him at our NCRS meetings -- I KNEW the guy was a phony!!! I told everyone I knew that he was a phony! You know what? People accused me of being "jealous" because he had more cars than I had - and probably more money too! Okay ---- some of these aholes invested with the guy... I'm good with that -- they lost and I'm still on the right side of a prison wall.



http://www.bizjournals.com/portland/stories/2009/08/31/story4.html

[protour73]

no....really? just sayin? :waveflag:

The fact that you aren't doing this as a hobby, or something that you are just "trying it to see what happens, and I'll let you know"...... and have really been at this for a long time, sure merits listening to what you have to say.

You care enough to share your real life experience and give folks the chance to glean the pearls of wisdom and hopefully apply them to their own situation

I hope the folks new to this thread keep that in mind :thumbsup:


Just sayin'.

[Sieg]

LOL! I accidentally bought 100 shares of TEVA @ $37.30 (No I won't go into the details)
I started watching and reading up on it and thought hmmm this CEO deal might not be terrible. Being a Euro trade I couldn't reinvest the dividend (at least that's what I think) I couldn't get comfy with the risk and sold it @ 39.80 and also picked up a $32 dividend deposit.

[protour73]

Is that like "she accidentally got pregnant" ? LOL

LOL! I accidentally bought 100 shares of TEVA @ $37.30 (No I won't go into the details)
I started watching and reading up on it and thought hmmm this CEO deal might not be terrible. Being a Euro trade I couldn't reinvest the dividend (at least that's what I think) I couldn't get comfy with the risk and sold it @ 39.80 and also picked up a $32 dividend deposit.

[WSSix]

hahahahaha is this really the name of the firm? Gatti, Gatti, Mayer, Sayer, Thayer and Associates Say it three times fast and try not to chuckle.


Greg, do you feel the same way about fee only financial planners/advisers? You know, it may just be me hoping and wishing for the best in the world but I've got to think there has to be people out there who truly and honestly want to help people with their investments while also making a living not a killing like this guy was. I've always heard that fee only people are safest because they only make money upfront when you meet with them. They don't get any percentage of your gains so there's no ulterior motive to their advice.

[GregWeld]

hahahahaha is this really the name of the firm? Gatti, Gatti, Mayer, Sayer, Thayer and Associates Say it three times fast and try not to chuckle.


Greg, do you feel the same way about fee only financial planners/advisers? You know, it may just be me hoping and wishing for the best in the world but I've got to think there has to be people out there who truly and honestly want to help people with their investments while also making a living not a killing like this guy was. I've always heard that fee only people are safest because they only make money upfront when you meet with them. They don't get any percentage of your gains so there's no ulterior motive to their advice.



I have used fee only financial advisors... and as long as they're FEE ONLY --- I think using them to take a long hard look at your finances is fine. I will say though -- that mostly they are only going to tell you what you already know. I.E., You need to cut expenses -- make more money - save more money - pay off debt.

See -- that's the thing --- it's MATH. Everyone can add and subtract. It's not even algebra. You earn X -- you spend X... there's X left over or not.

So a financial planner/advisor can't change your habits. That's what has to change -- unless you're just making way more money than you need -- and then that's SUPER EASY -- you take what's left over and invest it in SOMETHING - ANYTHING.

They will help you think about "stuff" in a different way -- so that's usually worth the 2K or so fee. Stuff like life insurance... whole life vs term life --- get you to think about how much you need --- or don't need. If you're single - no kids - etc - who needs life insurance -- so what if you croak? That type of thing.
But they can't change your mortgage.. or your car payment... or pay down the VISA.

To me it's kinda like going on a diet --- you do well for a few weeks -- or even 6 months or so... and now you've spent 2K "extra" to find out what you already should know.

That's "plain english".

For some folks it may have them turning over a whole new leaf. Maybe they don't think about paying down a 20% credit card FIRST vs paying the 6% Card and so on. So it can be a really good thing.

Like most "advice" --- you really really have to be willing to take the advice and stick with it.

[sik68]

Greg, the series of posts you made above are in invaluable. It will be read many times along my investing career in moments of weakness when I doubt my ability to think for myself.

Got my annual SEP IRA check deposited today, it's time to do some investing!

[GregWeld]

hahahahaha is this really the name of the firm? Gatti, Gatti, Mayer, Sayer, Thayer and Associates Say it three times fast and try not to chuckle.


Greg, do you feel the same way about fee only financial planners/advisers? You know, it may just be me hoping and wishing for the best in the world but I've got to think there has to be people out there who truly and honestly want to help people with their investments while also making a living not a killing like this guy was. I've always heard that fee only people are safest because they only make money upfront when you meet with them. They don't get any percentage of your gains so there's no ulterior motive to their advice.




Trey ---


One night (after all his troubles were aired on TV and in the news) -- Rhodes got seriously plastered - he went for a walk and fell down and hit his head on a manhole cover... he stumbled to a random neighbor and reported that he'd been shot. He said "Greg Weld drove by and shot me". I hated him -- he and everyone else in his world knew I hated him - he was not only a schmuck stealing lying POS -- he didn't know anything about cars or Corvettes and the NCRS made the bastard President of the local chapter (I quit that day!). I'm not joking here!! That (that he'd been shot) was, of course, reported to the police - he was taken to the hospital to get stitches --- and oh hell yeah -- the cops were calling me!

So the detective calls and starts to tell me why he's calling and that I'm a "suspect" in the case. So when he was finished... I said to him (not joking here either) that had I shot Wesley C. Rhodes that he'd be deader than a effin' doornail! And that yes - absolutely I'd love to kill the lying sniveling bastard - but I was in Seattle - as the detective knew since he'd called me... and I didn't shoot him even though I'd love to, given half a chance!

The cop started to laugh at this -- because - as usual, I was rather "direct".... and he says --- "well... we're well aware of Mr. Rhodes "issues" and I've seen lots of bullet wounds and this was no bullet wound... that it was pretty obvious that he fell and hit his head on something". He said he had to call me as part of the case but that I needn't worry about being arrested any time soon. LOL

[GregWeld]

LOL! I accidentally bought 100 shares of TEVA @ $37.30 (No I won't go into the details)
I started watching and reading up on it and thought hmmm this CEO deal might not be terrible. Being a Euro trade I couldn't reinvest the dividend (at least that's what I think) I couldn't get comfy with the risk and sold it @ 39.80 and also picked up a $32 dividend deposit.




OKAY THAT'S IT!! ---- Oh wait! I can't feed you thru your carburetor... you've already had that fire once!! LOL

[glassman]

^^^^Oh that was COLD, but funny,,,,

[GregWeld]

Greg, the series of posts you made above are in invaluable. It will be read many times along my investing career in moments of weakness when I doubt my ability to think for myself.

Got my annual SEP IRA check deposited today, it's time to do some investing!



Good to hear and thank you Steven. I'm happy to hear you're about to take the big plunge! I appreciate the warning too... because now we'll all know why the market takes a giant dive - you know - the hour after you get in! LOL


What I'm talking about in this thread isn't GOSPEL.... rather... it's simply food for thought! Like most things -- there's 50 ways to do "X"... my way of looking at things is just that, "my way". Nobody has to do what I say, or think the way I think.... I just want PEOPLE TO THINK. Period!

[Vegas69]

Greg, my counter punch is that you can't take your knowledge for granted. What is instinct for you at this point is foreign to others. Many high wage earners are not great with personal finance just like the less wealthy. They need someone to look them in the eye and say, hey, you need to wake up and smell the coffee and here's how you get there.

Me, I'll read a book, experiment, put together a budget, spreadsheet, scheme and plot. Not everybody is that driven. That's why financial advisors exist. I have two good buddies in the business.

Then there is asset protection from tax and death and the list goes on. To me they are a piece of the puzzle that makes it all click.

[Sieg]

Is that like "she accidentally got pregnant" ? LOL
Let's just say it was definitely premature and leave it at that! :rules:

Usually a stupid mistake like that would cost me a couple hundred instead of producing. Ha!

[Sieg]

OKAY THAT'S IT!! ---- Oh wait! I can't feed you thru your carburetor... you've already had that fire once!! LOL
That's ok, I can set up a direct transfer account. :popcorn2:

^^^^Oh that was COLD, but funny,,,,

Hey! I could have said nothing! I knew what I was throwing to the lions. :D :thumbsup:

[redefined]

My thing is, right now with the market, it seems to be at a high point again, like before it crashed 6 years ago. Setting overall records etc. Scares me that it's about time for it to dip and dip big. Probably soon as I get in we'll have a 2008 kerrr-splat! :bigun2:

[Sieg]

The cream of the crop isn't going to close up shop.

[GregWeld]

Greg, my counter punch is that you can't take your knowledge for granted. What is instinct for you at this point is foreign to others. Many high wage earners are not great with personal finance just like the less wealthy. They need someone to look them in the eye and say, hey, you need to wake up and smell the coffee and here's how you get there.

Me, I'll read a book, experiment, put together a budget, spreadsheet, scheme and plot. Not everybody is that driven. That's why financial advisors exist. I have two good buddies in the business.

Then there is asset protection from tax and death and the list goes on. To me they are a piece of the puzzle that makes it all click.




Which is exactly why I pointed out that they (FA's) can help some people. But I also explained that some people can also do simple math -- so if someone is looking for some miracle (in the form of a financial planner) to straighten out their finances... That's probably not going to happen. So -- like most things -- I was giving people things to think about because it all depends on what it is that they're expecting.

[GregWeld]

My thing is, right now with the market, it seems to be at a high point again, like before it crashed 6 years ago. Setting overall records etc. Scares me that it's about time for it to dip and dip big. Probably soon as I get in we'll have a 2008 kerrr-splat! :bigun2:

I'm sorry --- I hear that same thing every day. Now.... if you've read this thread at all ---- you'd see that I constantly ask that people go look at charts. The reason for that - is that they will be ASSURED that the market WILL in fact dip.... and the shorter the time frame -- those dips will be more obvious... now -- stretch that chart out and those ups and downs start to calm down... and the most important thing you'll see is the chart lower on the left and higher on the right.

I want you to personally go choose just about ANY stock and pull up it's chart PRE 2008 ---- go back to 1999 or 2000 or whenever -- just as long as it's before 2008... and have it stretch to current. Tell me what you see.

The only losers in 2008 (same with housing by the way) are the people that SOLD ---- everyone else is doing just fine.

If you were invested in Dividend paying stocks during that low period --- those dividends were buying MORE shares at lower prices -- those shares paid dividends which bought more shares and so on -- AND their price per share appreciated. This is why I repeatedly say "LONGER TERM" not tomorrow - not next week - not this month... and maybe we suck for a year or two. But if you look at HISTORY (what else can we rely on - we don't have crystal balls) - that will show you that over time - you'll be fine.

If you understand AVERAGES --- the stock market is no different than most everything else in the world... sometimes it goes up - and sometimes it goes down -- but over time it AVERAGES "X". Housing's average increase is about 4% per year. It went nuts for a couple years... then went down for a couple years --- my guess is - when you look back - that "average" number stays just about the same...

The other thing that I have repeated repeatedly is to AVERAGE IN --- I have never said someone should go take 100K and put it all in tomorrow morning. Most people save up -- put some to work -- save some more - put some to work and so on. If they do that -- which is what's NORMAL -- they will buy more shares when prices are lower (during your big kerrsplat!) and they'll buy fewer shares when prices are at higher prices... they begin to average at a lower cost even if you managed to buy your first few batches at the peak of every year. It's okay. It's INVESTING. It's long term thinking 5 - 10 - 20 - 30 years. You're never going to have anything if you're always waiting for the lowest price of the century. You'd never buy a house - you'd never buy a car - you'd never buy clothes... if you were always worried that they might go on sale the day after you bought.

By the way --- I've guaranteed everyone, many times, that the day they buy - the market WILL go down. You'd see that by reading the thread. I will guarantee the day you buy it will be lower at some point than what you paid. Get over it.

Since this thread started - there have been plenty of guys here that started to invest -- and I'll bet you every one of them has seen PAPER losses in their account at some point.... The happy ones - are the ones that stayed the course.

[redefined]

The happy ones - are the ones that stayed the course.

Oh I completely agree, just have to pull the trigger :headspin:

[Vegas69]

Which is exactly why I pointed out that they (FA's) can help some people. But I also explained that some people can also do simple math -- so if someone is looking for some miracle (in the form of a financial planner) to straighten out their finances... That's probably not going to happen. So -- like most things -- I was giving people things to think about because it all depends on what it is that they're expecting.

It comes back to personal responsibility and drive. Wisdom uninvested in labor is wasted.

[GregWeld]

It comes back to personal responsibility and drive. Wisdom uninvested in labor is wasted.



I think the part that bugs me the very most -- is that people will spend all their time on finding the exact right part for their car -- and they'll spend 10 years hunting and gathering those parts and saving up for them etc.... and spend countless hours doing mock up and banging their knuckles... and LOVE IT.

Saving or investing for their f'ckin' future? Learning a minimum amount about it. Knowing how important it is to their LIFE... ZIP!

We'll pull the trigger on a $10,000 motor... or $4,000 wheels... even though by the time the car is actually running - they'll be out of date... but to imagine that we'd buy $10,000 of Altria (MO) and that it might go down to $9,500 and PAY US a 5% dividend... well that' absolutely INSANE. Who'd do that!


UGH....

[protour73]

Greg, I totally dig your "PASSION" about this whole investing thing. It's inspiring!!!!! :thumbsup:

THAT is one of the biggest reasons I keep coming back to this thread. Especially recently. All a guy has to do is read 40 or 50 or a 100 pages of this ginormous thread and they will hear the repetition of your message, "This is NOT difficult" "don't do it for the day, or the month, do it for the long haul"

I think the part that bugs me the very most -- is that people will spend all their time on finding the exact right part for their car -- and they'll spend 10 years hunting and gathering those parts and saving up for them etc.... and spend countless hours doing mock up and banging their knuckles... and LOVE IT.

Saving or investing for their f'ckin' future? Learning a minimum amount about it. Knowing how important it is to their LIFE... ZIP!

We'll pull the trigger on a $10,000 motor... or $4,000 wheels... even though by the time the car is actually running - they'll be out of date... but to imagine that we'd buy $10,000 of Altria (MO) and that it might go down to $9,500 and PAY US a 5% dividend... well that' absolutely INSANE. Who'd do that!


UGH....

[Sieg]

We'll pull the trigger on a $10,000 motor... or $4,000 wheels... even though by the time the car is actually running - they'll be out of date... but to imagine that we'd buy $10,000 of Altria (MO) and that it might go down to $9,500 and PAY US a 5% dividend... well that' absolutely INSANE. Who'd do that!

UGH....

I could have a 3:73 ring & pinion, rear disc's, 4-link and coil overs, new control arms, spindles, and coil overs....................if I sold MO. Ain't happening!

My piddly little Pro-Tinkering Camaro is your fault! :rofl: :thumbsup:

[WSSix]

Man Greg, that guys sounds like a real twat. Guess he got what was coming to him, lol.

It's also amazing to me how blind people with money will be to the obvious. I realize that there are certain, if not arguably tremendous, perks associated with having money and wealth but legally earning inflated returns compared to your average Joe in a public market place is not one of them. How people like this guy and Bernie Madoff got away with it for so long is beyond me. I wish no ill will on anyone but it's kind of funny how dumb people can be with their money even when they have a lot of it.

Just goes to show knowledge isn't limited to those with certain titles, specific bank accounts, or with in the walls of an institution etc etc.

[GregWeld]

I could have a 3:73 ring & pinion, rear disc's, 4-link and coil overs, new control arms, spindles, and coil overs....................if I sold MO. Ain't happening!

My piddly little Pro-Tinkering Camaro is your fault! :rofl: :thumbsup:



You can drive the Lotus all you want.

[protour73]

You can drive the Lotus all you want.

Yea, and coilovers now, will not put Filet Mignon on your plate at retirement, the MO will!!

.
.
.So I'm on the Schwab website reading about setting up a Brokerage account and I see they have Schwab Bank High Yield Investor Checking Account. There are no monthly service fees, no account minimum balance, and you earn interest on your balance, and the account is FDIC-insured.

Normally you need a $1000 minimum to open the Brokerage account, but if you direct deposit at least $100 a month they waive the minimum.

I can direct deposit whatever amount I see fit right out of my paycheck and the checking account is directly linked to a Schwab One Brokerage Account.

Even though my company matches money that I'd put into a traditional 401K, which I have pretty much NO control over. I can dump cash from every paycheck into the checking account and purchase whatever stocks I choose, whenever I choose, on my Schwab Brokerage account!! WIN - WIN

[GregWeld]

Man Greg, that guys sounds like a real twat. Guess he got what was coming to him, lol.

It's also amazing to me how blind people with money will be to the obvious. I realize that there are certain, if not arguably tremendous, perks associated with having money and wealth but legally earning inflated returns compared to your average Joe in a public market place is not one of them. How people like this guy and Bernie Madoff got away with it for so long is beyond me. I wish no ill will on anyone but it's kind of funny how dumb people can be with their money even when they have a lot of it.

Just goes to show knowledge isn't limited to those with certain titles, specific bank accounts, or with in the walls of an institution etc etc.



Trey ---


Here's the thing about Rhodes that kills me... and to people that don't understand how this could possibly happen! It must have been the result of greedy overzealous uncaring INVESTORS... It couldn't be more 180* out from that.


He started out working for a "FIRM" a big name firm.... was there until they cut him loose for "mishandling" clients funds - and in fact - he was fined for this... it's public record by the SEC -- but you'd have to be partly mad scientist to find out any info like that on a government website! When he left the big firm -- he talked some of his clients into letting him advise them... and over a period of time -- got more and more from then. Like most people ---- people recommend "who they're with" to others -- and so the snowball begins.

Now --- this ahole knew everything about his clients -- what the made - what they had - when they were to retire - their kids names -- everything! He went to some of the kids weddings! This was 20 plus years worth of "confidence" the investors had in this scum wad. The worst to me is that while he was spending THEIR money... and draining their accounts - HE KNEW that he was leaving retired people high and dry... he squandered their lifes savings.

These were NOT get rich quick clients -- in fact -- to the contrary -- most thought they were investing in government bonds and ultra safe annuities and that sort of thing. Funny - I later saw some of the made up names of these "holdings" --- and right then and there was a dead giveaway to me. You could not look up ANY of the so called "bonds". The names alone were made to sound ultra conservative and ultra safe but at the same time - they sounded ridiculous! Golden State Triple A Ultra Safe Government Ginnie Mae Plus Plus 4% Retirement GO Bond. Stuff like that. Just complete BS.

His problem was his EGO. When I first met him - we were at a regional NCRS event at Mt Bachelor (Sun River). He had purchased a well known local 67 BB Coupe... it was a nice 99 point car... and he was entered in the event (these are judged events). I overhead the ahole talking to someone about the car as if though HE had restored it.... When he'd just bought it the month before... Okay - so I immediately know he's a liar lowlife. By the next years event - he had half a dozen mid years... But I'd also heard about him by now --- and he was telling people that he managed about 25 million bucks. Okay - do the math -- 25 million @ 2% fixed fee... about $250 grand gross income. He has a fancy office in Lake Oswego... he has an assistant... so even if he's grossing 400K he isn't in a league that's buying 6 or 700K worth of Vettes in one year... so something stinks to me. He's also bragged about how he takes care of his mother - so you know money didn't come from his parents... 6 months later he's got a '70 Hemi Drop top Challenger and a '67 Hemi Bellvedere... and two brand new Corvettes... and he's hustling other NCRS guys to "invest" for them.

So here's the coupe d gras..... about 3 or so years into this buying spree --- he send the club invites to host a year end party at his house.... The invite begins by describing his 10 mile view - and his extensive art collection and that we are welcome to "tour" his "Crossed Flags Museum".... This is all spelled out in a simple invite. AN invite should state where - why - when - who - time - date.... it's not the place to describe your house... or your view. NOW I'm REALLY HATING THIS GUY! OMG! Who does that?!?!? DUDE -- if you have killer stuff -- and you invite them to your house --- they'll see all that when they get there! You don't need to pump yourself up in your invite. I wanted to shoot him then!

No I did not attend.

I warned people --- "there's something wrong with this guy --- 'cause I know what I have --- and I can't buy cars like he's buying cars!". This guy has bought a million dollars worth of cars in one year! I'm worth more than the amount he's "claiming" to manage and I can't afford to do that!! So WTF... something isn't right.

Next thing you know the gig is up --- the accounts are drained... and lots of people got real hurt real bad.


I will tell you now something that will guarantee you will hate this guy.... I was at my buddys place (NorthWest House of Hardtops)... and this CLOWN comes driving up in his drop top hemi Challenger.... with --- wait for it ----- a SCARF and DRIVING GLOVES on. Wearing a tweed sport coat -- top down on a colder than hell day.

Mark and I laugh about that to this very day.

[GregWeld]

Yea, and coilovers now, will not put Filet Mignon on your plate at retirement, the MO will!!

.
.
.So I'm on the Schwab website reading about setting up a Brokerage account and I see they have Schwab Bank High Yield Investor Checking Account. There are no monthly service fees, no account minimum balance, and you earn interest on your balance, and the account is FDIC-insured.

Normally you need a $1000 minimum to open the Brokerage account, but if you direct deposit at least $100 a month they waive the minimum.

I can direct deposit whatever amount I see fit right out of my paycheck and the checking account is directly linked to a Schwab One Brokerage Account.

Even though my company matches money that I'd put into a traditional 401K, which I have pretty much NO control over. I can dump cash from every paycheck into the checking account and purchase whatever stocks I choose, whenever I choose, on my Schwab Brokerage account!! WIN - WIN




See how simple most of this is?? Seriously... you don't have to have half a gazillion dollars to open accounts or invest.... you just have do to a minimum amount of searching and talking to people and make a couple phone calls...


I can tell you that I post my dividends on occasion for no other reason that to keep the interest going. You know people LOVE seeing what everyone else "has" ------ but I get a kick out of seeing people that I know two years ago didn't know a dividend from a postage stamp --- post up that they just got a dividend!! Yeah --- it might barely be enough to buy dinner -- but it comes 4 times a year --- and is buying them more shares... So the snowball has been FORMED. You guys have no idea how proud that makes me!

[Sieg]

You can drive the Lotus all you want.

Yea, and coilovers now, will not put Filet Mignon on your plate at retirement, the MO will!!

In total jest Gentlemen.........realistically Greg's little thread is the best thing I've ever came across on the internet. Thank you :hail: :thumbsup:

Thankfully I was programmed in a manner that's allowed me to resist the temptations and capitalize on much of the investing advice. In a very small way compared to many, but I'd guess much better than the majority. :knock:

I don't know about the Filet Mignon..........thankfully I love a good fried Spam sammich! :drool:

[Sieg]

You guys have no idea how proud that makes me!
I think I might and you should be! The number of younger people in this thread that I've sensed have seen the light and the ones that have already taken action is something to be very proud of. Talk about making a difference in someone's life.........and their spouse and kids as well.

Then there's the number of people who I've shared in person what I've learned.......snowball!

Thanks buddy!

[GregWeld]

In total jest Gentlemen.........realistically Greg's little thread is the best thing I've ever came across on the internet. Thank you :hail: :thumbsup:

Thankfully I was programmed in a manner that's allowed me to resist the temptations and capitalize on much of the investing advice. In a very small way compared to many, but I'd guess much better than the majority. :knock:

I don't know about the Filet Mignon..........thankfully I love a good fried Spam sammich! :drool:



I personally have NEVER been able to stay within any manor of restraint. If I go to a store -- I'll ask the guy -- If you have good - better and best.... what do you have better than that?? LOL. Oh! You have Filet Mignon! Do you have PRIME Filet Mignon??

Luckily for me - our ability to generate what it takes to live that way, for the most part, outstrips my ability to find new things to have.








I think I might and you should be! The number of younger people in this thread that I've sensed have seen the light and the ones that have already taken action is something to be very proud of. Talk about making a difference in someone's life.........and their spouse and kids as well.

Then there's the number of people who I've shared in person what I've learned.......snowball!

Thanks buddy!


You're welcome!



You know --- the people - yourself included -- need to THANK THEMSELVES, not me. I'm just beating the drum.... the people actually getting off their ass and actually doing something - that's on each of you. It's one thing to read and digest -- it's quite another to follow through and do.

The reason I keep this (or try to) keep it SIMPLE --- and with DIVIDENDS --- is that it's the simplest to see some success right away. Even if you completely just missed by a day - the last dividend payment -- the next one is only 90 days away. And once people see that -- I think it lifts their spirits -- and holds their attention.

There's other ways to invest -- but they just might not be as simple and as successful for those starting on this new path.

[protour73]

See how simple most of this is?? Seriously... you don't have to have half a gazillion dollars to open accounts or invest.... you just have do to a minimum amount of searching and talking to people and make a couple phone calls...


I can tell you that I post my dividends on occasion for no other reason that to keep the interest going. You know people LOVE seeing what everyone else "has" ------ but I get a kick out of seeing people that I know two years ago didn't know a dividend from a postage stamp --- post up that they just got a dividend!! Yeah --- it might barely be enough to buy dinner -- but it comes 4 times a year --- and is buying them more shares... So the snowball has been FORMED. You guys have no idea how proud that makes me!

and Greg you should be proud, it's got to be a real kick seeing people get inspired!!

NOW having said that, so I open up an account and dump a chunk of my "recent windfall" into the Brokerage account.........that's where I fall off the "edge of the flat earth" .. I mean UNCHARTED territory!! I don't have a freaking clue how to actually pull the trigger on the actual first stock purchase. I assume the easiest thing to do is to take a check with me to open an account at my local Schwab branch and let a Schwab rep guide me through it.

and then there are taxes - and I remember reading this Weld-ism So let's use this as an example. BE CAREFUL about taxes! If you bought at 2 and sold at 10 -- within ONE YEAR AND A DAY - you'd OWE regular income tax rates on that GAIN.... but if you held it ONE DAY AND A YEAR - that becomes LONG TERM CAPITAL GAINS and is max tax rate of 15%

I don't plan on selling any shares in year, but how do you handle dividends? I'd want to reinvest the dividends into more shares, but obviously in the beginning you'd have to bank those dividends (in the Schwab Checking account earning some interest) along with payroll deposits until there is enough $$ for more shares. Surely you're taxed on the dividends as gains right?


============================================

In total jest Gentlemen.........realistically Greg's little thread is the best thing I've ever came across on the internet. Thank you :hail: :thumbsup:

Thankfully I was programmed in a manner that's allowed me to resist the temptations and capitalize on much of the investing advice. In a very small way compared to many, but I'd guess much better than the majority. :knock:

I don't know about the Filet Mignon..........thankfully I love a good fried Spam sammich! :drool:

I love me some Spam sammich...... Comfort food going back to my childhood!!

[GregWeld]

and Greg you should be proud, it's got to be a real kick seeing people get inspired!!

NOW having said that, so I open up an account and dump a chunk of my "recent windfall" into the Brokerage account.........that's where I fall off the "edge of the flat earth" .. I mean UNCHARTED territory!! I don't have a freaking clue how to actually pull the trigger on the actual first stock purchase. I assume the easiest thing to do is to take a check with me to open an account at my local Schwab branch and let a Schwab rep guide me through it.

and then there are taxes - and I remember reading this Weld-ism

I don't plan on selling any shares in year, but how do you handle dividends? I'd want to reinvest the dividends into more shares, but obviously in the beginning you'd have to bank those dividends (in the Schwab Checking account earning some interest) along with payroll deposits until there is enough $$ for more shares. Surely you're taxed on the dividends as gains right?





Dividends are taxed at a flat 20%.... and you should have them REINVESTED in the stock you've bought and just pay the small tax on them out of pocket.

Now -- that's in an ordinary taxable account ---- if you're opening a ROTH or an IRA -- then those are treated differently and a Schwab rep can help you with that.

Before you actually BUY anything - build your portfolio on paper... so first things first -- get a line up of names you wish to own... make sure you have some diversity -- make sure the percentages dollar wise work out... and then depending on how much you have to invest... either take the plunge -- or scale in.

See the problem is with someone telling you what to do -- is we don't know your situation -- how much you make - how old are you - is this retirement or just investing etc. Are you investing 1,000 -- 10,000 or 100,000 and there's just so many variables. That's why reading the thread --- and I know it's long and repeats itself -- will help to guide you so you can think thru these things on your own.


You're not going to lose out if you just put the money into an account --- then take a month or two months to learn and become comfortable --- then start. We're dealing in years here -- not weeks or months.

[WSSix]

Thanks for the back story on the guy. Makes me dislike him even more, lol.

[GregWeld]

Thanks for the back story on the guy. Makes me dislike him even more, lol.



It's why I didn't hesitate to tell the cop I'd kill him if I'd have shot him. I'd have made sure he was a goner...


One of his 20 plus year clients was a friend -- a retired doctor - ultra conservative people -- the kind of people that saved all their lives and stayed in the same house -- and drove simple cars... Henry was 70 when he got the call telling him he had NOTHING....

Think about that -- 70 years old -- happily retired enjoying life one day - the next day you're wondering if you can eat. Rhodes went to their kids college graduation -- and his wedding. He KNEW he was wiping him out.

THUS --- NEVER put your eggs in one basket -- which is why I'm not all in one brokerage even though it would be easier and cheaper. And why I invest in different stuff... real estate etc. Not just the stock market.

[glassman]

It makes me sick to hear stories like that. My dad taught me that nobody manages your money better than your self. Dont put all your eggs in one basket and diversify. It was good advice, too bad from 32 to 46 i "invested and forget it". I will promise to watch it like a hawk now that i'm 47. Got a nice base. I'm hopin to get at 1.5 to 2 by time i'm 62. Getting the kids done with college will be a major hurdle, two more years and that will be another 3k a month to put away. Right know were doing about 50k a year (15k for me and 15k for her from our company into its pension/401k) and another 20k into my Schwab stuff. Plus the asset's we have now, the house and business (which is "sellable", but its a specialized market so finding a buyer to "buy" a job isn't easy)...

[GregWeld]

It makes me sick to hear stories like that. My dad taught me that nobody manages your money better than your self. Dont put all your eggs in one basket and diversify. It was good advice, too bad from 32 to 46 i "invested and forget it". I will promise to watch it like a hawk now that i'm 47. Got a nice base. I'm hopin to get at 1.5 to 2 by time i'm 62. Getting the kids done with college will be a major hurdle, two more years and that will be another 3k a month to put away. Right know were doing about 50k a year (15k for me and 15k for her from our company into its pension/401k) and another 20k into my Schwab stuff. Plus the asset's we have now, the house and business (which is "sellable", but its a specialized market so finding a buyer to "buy" a job isn't easy)...



HUGE!!!!

[GregWeld]

So the uphill battle is that everyone on TV is going to be talking about what a stellar year 2013 was. Not many years do we enjoy a 30% plus rise in just about everything we touch. Housing is snapping back in most areas... the hardest hit being the first to really come roaring back... etc.

Time and again - the question becomes so simple. Is NOW the time to put my money in the market (or elsewhere? Housing?)?

Here's the way I look at it. I think 2013 was the year that the USA finally was starting to get it's act back together. Nothing is really "great" or going gangbusters... But 2013 brought or started to bring a sense of -- it's not going down - might not be going full tilt either but things are looking up.

THE MARKET IS A FORWARD LOOKING MECHANISM. Always has been.

My sense is we'll see continued business and housing improvements. Not raging - but nice and steady... SO JUST BECAUSE 2013 WAS GANGBUSTERS doesn't make 2014 have to be crappy! What kind of thinking is that. OH! My business started to recover -- so next year everything ought to go to hell. That's NOT how people think! What most people do is relax just a bit... and look around at their situation and say -- well last year - sales came back to normal or almost normal -- so here we go! Let's kick some ass in 2014!

So just to say the market had a fantastic year - therefore - going forward it has to suck... well -- that's just made up bullpucky. While we can't expect 30% across the board gains... why should we just expect something to go sour -- when in my opinion we're just at the first few feet of a business rebound? THE MARKET is about business and earnings - forward looking sales and profit estimates etc.

In unison ---- Does it go straight up???


I can't hear you.....


Louder!


HELL NO!! It's like climbing stairs... and sometimes it two steps forward and three steps back - then four steps forward. What's the net result? We're 3 steps forward. Think about that -- because most of you did lousy math right there. You didn't come up with 3 steps forward did you!

The market moves in jerks. Any of you that have been in have certainly gotten accustom to that by now. Just about the time you're ready to throw in the towel - we get a 200 point day followed by a 100 point day... then a whole bunch of nothing mixed with a few poopie days.. then boom! Another big day. In the end the net result of 2013 was up about 30%.

As dividend investors --- and I'm going to get to my point here in a minute --- we're likely NOT going to see our accounts rise by the same as the market. The reason for that is that we're not invested in GROWTH. We're invested in TOTAL RETURN or DIVIDEND stocks. AND we're protecting our capital from DOWN markets by buying the best of breed companies - mixed with some steady eddies. These companies aren't the kind of companies that suddenly have a 40% sales increase. AND the fact that they yield a dividend can actually hold their prices back when things are going well. WHY? Because people look at the stock price rise -- which makes the yield comparison decline! It becomes an inverse measure... when the price falls the yield rises protecting us on the way down... but that same comparison holds us back a bit on the way up. So long term we get a better comp because we didn't loose as much as those around us - but we don't gain big time quickly either. We're the turtle not the hare. In the end we're the winners (historically dividend investing is the biggest bread winner).

What our dividend stock prices are competing with is interest rates.

What the MARKET wants (what is the market other than a group of people) is safety with a return. Those two are almost mutually exclusive - the higher the return the less safety. When "safe" rates on T-bills and the like rise -- those are super safe -- and when the return is 3 or 4% --- then they become "attractive" to the blue haired little old lady crowd (the ones with the most money!) because they're going to be compared with say COKE (KO) --- and when you factor in the tax free 3% vs the taxable 3% of a dividend... well the TBill becomes a temporary winner.

Now --- let's look at interest rates in the very most basic way.

Interest rates RISE - when what happens?

When people are WILLING to borrow rates rise. What is interest other than a sales commission on money? If nobody is buying I have to lower my prices -- if there is enough demand I'm able to raise my price a bit - but then I should see a leveling off as that demand slows a bit and adjusts to the new prices. If things go well - I might see more or continued demand --- or I might just have hit the ceiling and have to hold right here for awhile. Everything adjusts accordingly. Rates rise to quickly -- it kills housing sales -- and car sales.. and business balks... The WORLD has gotten used to damn near free money. It's going to balk at rising rates. Think about this in your own world. 4% or less money to buy a house... are you ready to look at 5% rates? NO..... that would piss you off. But over time -- 5% if you think it's going to 6% might start to be attractive enough that you take the plunge... and 3 years later -- you're the dude bragging about his cheap mortgage rate at the water cooler.

So if business is GOOD --- we'll see rising rates... and there will be some adjustments made. Rates cost business profits - they'll have to adjust (what's that? -- they raise prices! 'cause they're done cutting costs).

What's a guy to do?? Personally --- I'm looking at my lowest / slowest growth and dividend payers. And what I'm asking myself is --- OVER TIME --- not next week or next year --- am I willing to hold "X" and take "X" (low) dividend and maybe have little or no growth in capital but own a great company that has historically been just fine.... or do I trim that one just a bit --- and try to put a little more into the higher returning (dividend) stock to raise my income and compete with what I see is rising rates and perhaps rising costs...

As typical -- I'd done kind of a little middle of the road. I dumped McDonalds just because I really am average Joe and I find myself AVOIDING eating there as a choice.... and I've trimmed my Coke... because it pays a paltry but steady dividend... and I own it for BALANCE... and I've trimmed half my Wells Fargo right after the first of the year by half - because I had a HUGE gain in it... and it doesn't pay much (now) dividend -- so I took a little pocket money but I think there's still plenty of upside there... so I'm hedging my bet by holding half (10,000 shares is still a good chunk of change last time I looked)... I added a little to my Kinder Morgan Partners (KMP) because they just bought some tankers to add to their pipe business (I like that thinking) and the dividend is good or better because of the price decline in their shares.... and I'm looking for a raise in my own pocketbook this year (this new house is going to be expensive! LOL). The rest I parked temporarily until I get a clearer view or finally decide where I want to put it. I'm now holding WAY too much high yield corporate debt.. but that's just parking money and getting paid to do so.

ALL THE ABOVE JUST USED AS AN EXAMPLE.... WHAT I DO IS NOT WHAT YOU SHOULD OR COULD DO.... but we have to talk about something real and that's real. Period.

So this is a segue -- (not segway like I fell on my face with when I borrowed Charley's)... into what you should be doing this time of year.... it's called REVIEWING and trying to peer just a bit into the abyss we'll call next year and beyond. Look at everything you hold and examine it -- question it -- will you own it come hell or high water --- are you earning enough GOING FORWARD -- What's your GUESS on how your business's will do (you ARE AN OWNER YOU KNOW). This is NOT about getting scared of losing ------- this is about a simple examination or "taking stock" of where you're at.

My HOPE (and that's all it is) -- is that continued better business and housing -- offsets the rise in rates and the market goes with the thinking that better business conditions are okay countered by or tempered by rising overhead... and that maybe 2014 is a "wash" ---- and if it just holds steady -- then the 30% rise we just had -- AVERAGES out to 15% over the two years. I'll take it!!


See -- that's really where your head needs to be at. Think about that. 15% over two years in a market that has AVERAGED 10% over it's lifetime... and that 10% doubles your money every 7 years... and you're going to bitch about ONLY making 15% ?? Or maybe the chance to have just made 30% and maybe we just average 2014 and get the normal 10%.... BUT IF YOU'RE NOT IN -- THEN YOU'RE OUT and you get nothing. Brilliant strategy --- brilliant.

Like my cop buddy says --- your gun is in the nightstand and the bullets are in the basement... and the rapist is coming thru the door. Brilliant.


:>)


Ramble over and out.

[protour73]

Nice rant coach,..........making an appointment tomorrow to get into the Schwab office this week :unibrow:

***so here we go! Let's kick some ass in 2014!

***IF YOU'RE NOT IN -- THEN YOU'RE OUT and you get nothing.


Ramble over and out.

[redefined]

Great post Greg.

I've got a few things I want paid off - school loans - BAHHH :hitaxeonthehead: but I should be able to knock that out by May. After that it's all about saving for the new house and investments!!!!

Time to pick a few of the ones listed here and watch them for the next few months. Interesting that you dropped McDonalds.

:gitrdun:

[protour73]

so let's talk Roth IRA's . . . . Good idea?

[redefined]

so let's talk Roth IRA's . . . . Good idea?

Are you married? Single? You'll have to go off of income here too.

Are you married and file jointly? Do you make more than $181k combined on the joint tax return? If so then legally, no Roth for you.

But now lets look at tax brackets. I believe by going over the $160k mark will put you into the next tax bracket. Because of this if you make over the $160 mark it's not worth doing the Roth and you should go Traditional - my opinion from my research and speaking with our Tax Accountant.

The basics between Roth and Traditional:

The money going into a Roth has already been taxed. Example, you get a paycheck, you then take the money that's already been taxed in said paycheck and place it into your Roth. When you retire and take money out you're then taxed just on the gains. You can also take the money you put into the Roth out at any time with no penalty.

Traditional comes out of your paycheck and goes into the IRA pre-taxes. So when you retire and you take this out you pay taxes on all of this.

With that being said, what is your tax bracket now? What will your tax bracket be when you retire? Higher tax bracket when you retire? Then do Roth now if you can, lower when you retire? Then do Traditional now? (with everything else said above in consideration)

If you CAN do a Roth, do it. I believe the max per year is also $5k per person for a personal Roth, if your IRA through work is a Roth there is no limit for coming out of your paycheck if not mistaking.

[WSSix]

$5500 if you're funding it yourself. Higher if you're over a certain age. In general though, they are great unless you find yourself in the tax brackets listed above. I do the majority of my investing within my Roth account.

[protour73]

$5500 if you're funding it yourself. Higher if you're over a certain age. In general though, they are great unless you find yourself in the tax brackets listed above. I do the majority of my investing within my Roth account.

Thanks guys....

Jointly the wife and I are under $160K, I sure hope my tax bracket now will be LOWER than my retirement tax bracket!! :thumbsup:

[redefined]

How much would you say is a minimum to start with? I'm a few months out before I can commit a decent chunk every month but I could swing a grand or so until then. Pick 1 stock and put a grand in it now?

[GregWeld]

Great post Greg.

I've got a few things I want paid off - school loans - BAHHH :hitaxeonthehead: but I should be able to knock that out by May. After that it's all about saving for the new house and investments!!!!

Time to pick a few of the ones listed here and watch them for the next few months. Interesting that you dropped McDonalds.

:gitrdun:


Paying any debt that has a "high" (that's relative) interest rate is priority. Once it's paid off --- the catch is to not charge more than you can pay off each month... If you pay off a 10% loan -- it's the equivalent of making 10% (not quite but you get the idea). Paying interest is the opposite of compounding interest for yourself... it's compounding for someone else.



so let's talk Roth IRA's . . . . Good idea?


For those that qualify -- I'd always fund an ROTH IRA first --- while it's not tax advantaged NOW --- pulling that money out tax free when you retire is just HUGE. We don't know what tax rates will look like when we retire -- but the longer you have until you retire -- the more you can bet they'll be higher than what they are now. Allowing your money to compound for years - and withdrawing it completely tax free is huge!

Think this way --- if you retire and need $2000 a month from your ROTH IRA... you can just pull out $2000 each month... but if you need $2000 a month to pay your bills and you're withdrawing from a 401K and you're in the 25% tax bracket -- you now need to pull out enough to cover your $2000 need AND enough to cover taxes ($500 more?)... so you're draining your account $500 a month more than if you had it in a ROTH. That's $6,000 a year! Just for taxes.

Put the money in NOW -- let it grow... and withdraw tax free! It's the greatest gift Congress ever gave you!





How much would you say is a minimum to start with? I'm a few months out before I can commit a decent chunk every month but I could swing a grand or so until then. Pick 1 stock and put a grand in it now?


Whatever you can afford -- there is no magic... I'd say if you have a grand --- either do ONE stock -- or do TWO.... and when you have $500 more add a third -- do this until you have TEN stocks... then start to add your $500 to one of the ten names... until you have a grand in each... and so on. The most you need is 20 names even if you have one million dollars (that's 5% per investment). If it was me -- I'd always add the additional funds to the name that had the poorest performance -- thus buying me more shares - and bringing my average cost down the quickest...

There's an explanation to averaging down somewhere in the thread.

[WSSix]

I agree with Greg about doing what you can when you can at any point with the Roth. I say this even if you know you'll be over the salary limit to contribute eventually. I started my Roth in my 20s and some years could only manage a $1000 or so. I've only been able to max it out the last few years.

Also, I'm sure it's been mentioned but once you've got an account open, don't save up through the year and make lump sum deposits to it. Get the money into it ASAP even if it's $50 here or $100 there. If you're dealing with smaller amounts, especially if you're young and just starting out, you may find simply investing in a target retirement account is best. This way you can make the small deposits and not worry about having enough to buy a full share of a stock. You can't buy half a share of a stock but you can buy half a share of a mutual fund.

Here's a quick run down of the regular and Roth with minimums etc from Vanguard. I'd bet the other houses are similar

https://investor.vanguard.com/what-we-offer/iras/traditional-iras-and-roth-iras

[GregWeld]

Great post Greg.

I've got a few things I want paid off - school loans - BAHHH :hitaxeonthehead: but I should be able to knock that out by May. After that it's all about saving for the new house and investments!!!!

Time to pick a few of the ones listed here and watch them for the next few months. Interesting that you dropped McDonalds.

:gitrdun:




Sorry -- I'd forgotten to respond to this...


I had written earlier that I was personally disappointed in a couple recent McDonalds visits... the food was cold and the places weren't especially clean.

When I'm an OWNER of a stock - that makes me an OWNER of the company -- small yeah -- but that IS what you are doing when you buy shares -- you're buying a piece of the company. I like to be proud of what I own..... and I also subscribe to the Jeffery Lynch version of investing. I buy share in companies that I can see and use personally.... keeps it simple.

SO --- I think I'm mister average Joe guy in the street --- and if I'm avoiding the food at McDonalds -- then maybe others are as well. What Gwen and I find is that if we get hungry for a burger -- we want to spend those calories on eating something really good!

So coupling that with the relatively low % of dividend.... and understanding that if my money has to work for me -- and I want to be paid a MARKET rate of return --- and we are in a rising rate environment -- then something has to be sold in order to buy something else with perhaps a better cash-flow and growth prospects. It's more just a rebalancing act which should be done by everyone at least annually. You look at every holding and if you're honest about your expectations and assessment of the business... and then you either continue to hold -- or you move on. I chose to move on.

My positions in a name are kind of large on a relative scale to most reading this drivel on here.... My positions are usually a million or more per name. I live off the income generated rather than re-invest it, as I'm kinda done trying to save some money. LOL. When I look at where my portfolio is and the average income and growth --- making 3.3% and only seeing 7% growth puts a name like this at the bottom rather than in the middle. Middle gets held -- bottom gets sold. I have steady eddies already -- if I didn't -- then I would have looked at mickyD's with a different thought process... but I already have Coke (KO) and Altria (MO) and Con Ed (ED) and several other holdings that have those qualities.

Does this make sense?


BTW --- I NEVER want anyone to follow what I do just because I use it as an example around here. I'm in a completely different "place" -- I'm not a young man anymore (anyone under, say, 40 is young!) -- I've been retired for years -- and I'm (as stated above) not trying to diversify or save capital up to build a nest egg. So my moves are geared to making CASH FLOW so I can continue to race with Charley and put fuel in the rig. That's way different than INVESTING 102 -- similar -- but a different balancing act. If I have a long term gain (owning the shares one year PLUS a day) == and I can take that capital gain... and raise my % of dividend with some other name... then that's what I do. The difference of getting 3.3% on a million bucks or getting 5.2% is a good number... and if I can get 10% growth instead of 7%... that makes something look even better!

[GregWeld]

I DID NOT take the time to read this sites information --- I kinda already have a decent idea on what it takes to make some investment decisions... LOL

BUT ---- it might be worth a read for the new guys... and might be somewhat faster than trying to work your way thru all the posts here (maybe less confusing to get started with than here).


http://beginnersinvest.about.com/od/dividendsdrips1/ss/dividends-and-dividend-investing-101.htm

[GregWeld]

So here's some info that came thru just now --- that KEEPS ME BEING A DIVIDEND INVESTOR...


http://www.marketwatch.com/story/bp-prudhoe-bay-royalty-trust-announces-fourth-quarter-2013-unit-payment-2014-01-03?reflink=MW_news_stmp

I own 11,000 shares of British Petroleum Prudhoe Bay Trust (BPT) -- the last dividend I got was $2.17 a share (for the quarter).... they just announced that shareholders of record (the EX date) will be paid $2.527 (call it $2.53).


Now ---- Since I get to waste my dividends buying much "needed" useless crap that Charley wants me to have... I just got an allowance increase of $4,000 every 3 months... for doing what? Nothing.

This particular dividend VARIES because it's based on how much oil they pump and some other stuff -- but it's always a nice check. I just like it when the check gets bigger rather than smaller!

[CamaroMike]

I picked up Ford "at a discount" a couple of weeks ago while it was down. I am already in the green, cant wait for dividend day!

[toy71camaro]

Glad to see a few more guys jumping on the train here. Awesome!!!

[GregWeld]

So I was just messing around SCHWAB and found that a guy can go to RESEARCH -- Choose ETF's -- and then choose ETF PORTFOLIOS...


So after that they ask what kind of investor you are... Conservative etc. In a drop down menu ---- then you can put in the amount you'd like to invest... I put in 10,000 for playing around.

It then built and entire portfolio of ETF's by how much to put in each one etc.

The minimum was 5K total.


My point here is --- for retirement accounts -- or those guys just struggling to CHOOSE particular names etc ---- ETF's would be a good investment. They're basically baskets of stocks that make up a particular group -- say TECH --- OR Bonds -- or Industrial -- or Big Caps... They're commission free some of them and they're very liquid... and pretty damn stable if you have a diversified portfolio of them. Which is exactly what this little "builder tool" does for you.

Pretty smart -- and pretty easy for those just starting out I think.

[redefined]

So I setup my work 401k and did it as follows.

Traditional IRA

60% Target Retirement 2045 Trust I
20% T. Rowe Price Personal Strategy Growth Fund (MUTF:TRSGX)
20% Vanguard Balanced Index Fund Institutional Shares(MUTF:VBAIX)


Our accountant advised that I leave my current Roth as it's own account and don't merge it with any others.

So on top of this IRA as soon as my school debt is paid off - I need to check my interest rates to see if I should even pay lump sums based on how high they are- I'll start investing a decent amount. Hopefully the money will work for me while we save to build another house and we won't have to just flat out save it all!

**Just checked, student loans are at 6.8%**

[redefined]

After looking further into the funds in each, it seems that the Targeted fund has a lot of Vanguard Index funds in it. I might be doubling up to much :twak:

Target 2045 Fund:
Percentage Fund Percentage
1 Vanguard Total Stock Market Index Fund 63.1%
2 Vanguard Total International Stock Index Fund 26.9%
3 Vanguard Total Bond Market II Index Fund** 8.0%
4 Vanguard Total International Bond Index Fund Institutional Shares 2.0%
Total — 100.0%

[GregWeld]

After looking further into the funds in each, it seems that the Targeted fund has a lot of Vanguard Index funds in it. I might be doubling up to much :twak:



See --- you're LEARNING.... and that's what I love to see!! I don't care what you guys end up doing --- as long as you're engaged and THINKING and LOOKING...

It doesn't take a whole lot of work -- and as you understand it a little more -- actually becomes kind of fun.

[redefined]

See --- you're LEARNING.... and that's what I love to see!! I don't care what you guys end up doing --- as long as you're engaged and THINKING and LOOKING...

It doesn't take a whole lot of work -- and as you understand it a little more -- actually becomes kind of fun.

Oh it's fun, I know this. I almost did it for a living, or wanted to in school. But then I realized what most people end up doing. I wanted to help people, not push papers for accounting.

Ugh, Problem is there are not a ton of options on this Vanguard site for my choices for the IRA. Guessing it has a lot to do with my 'independence' through work. But I feel that fund is going to end up doing some double dipping of stocks which isn't ideal.

[GregWeld]

**Just checked, student loans are at 6.8%**



That's not really high rate debt --- so what you have to gauge -- is if you INVEST -- what is your TOTAL RETURN going to look like -- vs -- just paying down the debt and maybe adding some to the principal from time to time as you can.


At 6.8% --- I'd lean toward trying to get total return on my investments. Now if it was above 10% then I'd pay it off asap.

[redefined]

Pick me pick me!!! :y0!:

So would a mutual fund like this pay dividends? Seeing as how the stocks IN the fund pay dividends, would you get them seeing as how it's inside a 'mutual fund'?

Vanguard Dividend Growth Fund (VDIGX)

[GregWeld]

Pick me pick me!!! :y0!:

So would a mutual fund like this pay dividends? Seeing as how the stocks IN the fund pay dividends, would you get them seeing as how it's inside a 'mutual fund'?

Vanguard Dividend Growth Fund (VDIGX)



Yes -- that's it's primary function... "current dividend income".


So to me - that would be a better investment choice for someone already retired.
If you have TIME on your side -- then you'd be better off with something that will give you growth. In looking at it -- it's growth isn't BAD... given
that it's stated objective is dividend growth not capital growth... So IF YOU CAN CHOOSE TO RE-INVEST THE DIVIDEND having that dividend buy
you more shares.


Here's what THEY say is the funds objective.




The investment seeks to provide, primarily, a growing stream of income over time and, secondarily, long-term capital appreciation and current income. The fund invests primarily in stocks that tend to offer current dividends. It focuses on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time. These stocks typically-but not always-will be large-cap, will be undervalued relative to the market, and will show potential for increasing dividends. The fund seeks to be diversified across industry sectors.


The funds top ten holdings:



McDonald's Corporation (MCD) 3.01%
Microsoft Corporation (MSFT) 2.83%
United Parcel Service Inc (UPS) Class B (UPS) 2.78%
Wal-Mart Stores Inc (WMT) 2.71%
International Business Machines Corp (IBM) 2.71%
Merck & Co Inc (MRK) 2.51%
Target Corp (TGT) 2.51%
Praxair, Inc. (PX) 2.50%
Roche Holding AG (RHHVF) 2.46%
Johnson & Johnson (JNJ) 2.44%

[NOVA]

So I was just messing around SCHWAB and found that a guy can go to RESEARCH -- Choose ETF's -- and then choose ETF PORTFOLIOS...


So after that they ask what kind of investor you are... Conservative etc. In a drop down menu ---- then you can put in the amount you'd like to invest... I put in 10,000 for playing around.

It then built and entire portfolio of ETF's by how much to put in each one etc.

The minimum was 5K total.


My point here is --- for retirement accounts -- or those guys just struggling to CHOOSE particular names etc ---- ETF's would be a good investment. They're basically baskets of stocks that make up a particular group -- say TECH --- OR Bonds -- or Industrial -- or Big Caps... They're commission free some of them and they're very liquid... and pretty damn stable if you have a diversified portfolio of them. Which is exactly what this little "builder tool" does for you.

Pretty smart -- and pretty easy for those just starting out I think.

You can also do regular mutual funds too if you select "all in one solutions" I punched in 250K - It picked 4 ETF funds and then did the same amount with regular mutual funds (mostly schwab funds, low or no fees) and it picked 9 funds ..... I agree with you pretty interesting and maybe not a bad way to go.

[GregWeld]

You can also do regular mutual funds too if you select "all in one solutions" I punched in 250K - It picked 4 ETF funds and then did the same amount with regular mutual funds (mostly schwab funds, low or no fees) and it picked 9 funds ..... I agree with you pretty interesting and maybe not a bad way to go.




Someone with 100K plus to invest -- or invested already -- should be picking their own stocks. With that kind of money you don't need the mediocrity that generally comes with Mutual Fund ownership. I was trying to find a way for guys just starting out -- with less than 50K to invest... which would allow them to get some diversification and have some immediate benefit (just being invested!)

[Flash68]

That's not really high rate debt --- so what you have to gauge -- is if you INVEST -- what is your TOTAL RETURN going to look like -- vs -- just paying down the debt and maybe adding some to the principal from time to time as you can.


At 6.8% --- I'd lean toward trying to get total return on my investments. Now if it was above 10% then I'd pay it off asap.

Exactly. I just went through this talk with my wife. She has these law school loans she just wants to pay off ASAP because of the psychological burden she feels they are, but I explained we are certainly paying off the 8 and 10% loans but no way in HE!! we are paying off the 3% and 4% loans which make up a large bulk of it. It's not hard to beat that total return PLUS you have liquidity should you ever need some money.

[JKnight]

Not to mention the interest from student loans can be tax deductible up to $2,500 or something like that...

Try doing THAT with credit card interest!

[dhutton]

I put some money in this ETF to see how it will compare to the performance of my individual stock picks: VYM

I am curious to see how it will compare over time.

Don

[GregWeld]

I put some money in this ETF to see how it will compare to the performance of my individual stock picks: VYM

I am curious to see how it will compare over time.

Don



Don ---


As you know -- this isn't the stock pickers thread... but having said that -- I'd be real curious (not that you have to defend yourself) why you choose this particular ETF.

Is it inside an IRA? Or is it in a taxable account?

So -- the reason I ask this -- is that we use these names that people throw in as learning tools... discuss them - dissect them - and see what makes them tick and what the thought process is. That way others can glean some things to think about.

I know what I think of this pick -- but I'm interested in why you chose it.

[Flash68]

Not to mention the interest from student loans can be tax deductible up to $2,500 or something like that...

Try doing THAT with credit card interest!

:thumbsup:

[redefined]

Was googling something and ran across this. Made me think of this thread.

http://www.amazon.com/The-Dividend-Growth-Investment-Strategy/dp/B004JU1S6W

"How to Keep Your Retirement Income Doubling Every Five Years" Bold statement.

From one of the reviews:

1. Dividend growth shields investors from emotional turmoil of having your investments sink in value, since these stocks tend to stand up well and also because of the dividend income stream. This is very important if you have a low threshold for financial panic.
2. Dividend growth provides relatively small income streams at first, presumably when you don't need income (and when your taxes are highest), but it grows so that at retirement you will have a large annual income.
3. Dividend growth strategy should have much higher returns than bonds, since your dividend income will grow, while bonds pay static returns.
4. If you hold stocks in an IRA and just live off the dividends and pass the stocks to your heirs, it is a perfect tax shelter for transfering huge amounts of wealth, since all the capital gains on the stocks are not taxable when the stocks are inherited.
Ms. Klugman does mention in passing that Dividend Growth is not necessarily the highest return strategy, and probably will not even keep pace with an index fund. However, Ms. Klugman makes a very compelling case for this style of investing. In addition, her observations about the Wall Street in general are insightful and make good reading.

[dhutton]

Don ---


As you know -- this isn't the stock pickers thread... but having said that -- I'd be real curious (not that you have to defend yourself) why you choose this particular ETF.

Is it inside an IRA? Or is it in a taxable account?

So -- the reason I ask this -- is that we use these names that people throw in as learning tools... discuss them - dissect them - and see what makes them tick and what the thought process is. That way others can glean some things to think about.

I know what I think of this pick -- but I'm interested in why you chose it.

Hi Greg. Well I picked it for a number or reasons. My stock picks to date have been pretty good but I also picked a couple of turkeys. I got to thinking maybe there was an ETF that focused on stocks that pay decent dividends. I noticed that this one had a lot of the names that I had considered as good picks. So I bought some in the interest of science and hopefully finding a way to pick up a reasonably decent dividend while reducing risk through the diversification of this fund.

Greg, I put this out there knowing that you would likely dissect it. I am interested to hear what you say and respect your opinion. I am pretty sure you will not particularly like it but I am curious to hear why. Is it because the dividend is too low, the growth too low or because there is some percentage of turkeys in there too? Or all of the above?

I do not have a significant position in this. I have a little in my Schwab account and a little in my 401k. I bought it to serve as a benchmark of sorts so that I could gauge my stock picking performance against it.

OK, I am ready, let's hear what you have to say... :thankyou:

Don

[GregWeld]

Wow -- I hope I'm not getting a reputation as the "stock ogre"!!


I love it when people use what they know and step up and put their hard earned money to work. That's the whole point of this thread IMHO!


Okay --- so a the price per share of this ETF -- above $60 a share -- it's only paying about 2.5%. It's growth last year (total return) mirrored the S&P 500 with 30%.

My old saying is "a rising tide floats all boats". Because pretty much everything does well (relatively) in a rising market.

I just wouldn't invest my money in much of anything that is only paying me 2.5% to own it. Coke pays more than that - McDonalds pays more than that BUT --- ALWAYS A BUT --- you got the growth (had you owned it) of the market (30% in 2013) so the 2.5% turned out to be a good return!

My problem with 2.5% is not a GOOD YEAR --- it's when we have poo years... and we're waiting for the market to come back -- THAT IS WHEN WE NEED TO GET PAID TO WAIT... because like the rising tide -- and down market takes everything down and that's when I need to be paid. With the 10 year Treasury bill hitting 3%... the 2.5% pales.

So that would be my only beef with this ETF particularly as it bills itself as a "high dividend ETF".












Hi Greg. Well I picked it for a number or reasons. My stock picks to date have been pretty good but I also picked a couple of turkeys. I got to thinking maybe there was an ETF that focused on stocks that pay decent dividends. I noticed that this one had a lot of the names that I had considered as good picks. So I bought some in the interest of science and hopefully finding a way to pick up a reasonably decent dividend while reducing risk through the diversification of this fund.

Greg, I put this out there knowing that you would likely dissect it. I am interested to hear what you say and respect your opinion. I am pretty sure you will not particularly like it but I am curious to hear why. Is it because the dividend is too low, the growth too low or because there is some percentage of turkeys in there too? Or all of the above?

I do not have a significant position in this. I have a little in my Schwab account and a little in my 401k. I bought it to serve as a benchmark of sorts so that I could gauge my stock picking performance against it.

OK, I am ready, let's hear what you have to say... :thankyou:

Don

[dhutton]

Wow -- I hope I'm not getting a reputation as the "stock ogre"!!


I love it when people use what they know and step up and put their hard earned money to work. That's the whole point of this thread IMHO!


Okay --- so a the price per share of this ETF -- above $60 a share -- it's only paying about 2.5%. It's growth last year (total return) mirrored the S&P 500 with 30%.

My old saying is "a rising tide floats all boats". Because pretty much everything does well (relatively) in a rising market.

I just wouldn't invest my money in much of anything that is only paying me 2.5% to own it. Coke pays more than that - McDonalds pays more than that BUT --- ALWAYS A BUT --- you got the growth (had you owned it) of the market (30% in 2013) so the 2.5% turned out to be a good return!

My problem with 2.5% is not a GOOD YEAR --- it's when we have poo years... and we're waiting for the market to come back -- THAT IS WHEN WE NEED TO GET PAID TO WAIT... because like the rising tide -- and down market takes everything down and that's when I need to be paid. With the 10 year Treasury bill hitting 3%... the 2.5% pales.

So that would be my only beef with this ETF particularly as it bills itself as
a "high dividend ETF".

Not a stock ogre, a stock guru... Close, but different...:)

Marketwatch.com shows the dividend yield as 3.4% which is why I thought it was OK. If it is 2.5% then I agree, I picked another turkey, no argument. Any idea why the difference between the two yields?

I'm also curious what is considered a respectable yield. 4%?

Thanks again,
Don

[GregWeld]

Not a stock ogre, a stock guru... Close, but different...:)

Marketwatch.com shows the dividend yield as 3.4% which is why I thought it was OK. If it is 2.5% then I agree, I picked another turkey, no argument. Any idea why the difference between the two yields?

I'm also curious what is considered a respectable yield. 4%?

Thanks again,
Don

Well --- the dividend VARIES because it depends on what is making up the ETF during any particular quarter etc. but I see it as under 3% --- and that's primarily because the NAV (NET ASSET VALUE) has been rising --- when the share price - or in this case the NAV rises the % paid goes down.

By the way ---- if you have two different accounts -- NEVER buy the same names in each account. Remember that DIVERSITY means to diversify. Regardless of what account money is in -- it's still ALL you're money and you want to be diversified. So it doesn't make sense to double up like that. If you want to buy ETF's then buy one different one in each account.

[redefined]

Ok let's just make sure I'm reading these correctly.

Coke(KO)

https://www.google.com/finance?q=NYSE%3AKO&ei=ocvMUoDeNOnvsQeV8gE&ed=us

This dividend is 2.77% which at the last payout was 26cents per share (coming from the Div/yield 0.28/2.77 field).

Did I get that correct? Or is this the projected % at the next payout? If it's not, how do you determine if it'll stay the same, up or down. From what I gather if a stock is doing great then the dividend % will go down - supply and demand.

Most stocks that I have been watching, most from this thread, are in the 2.x% range. I've been trying to find higher ones that I still know the company, searching is hard! :bang:

[GregWeld]

Ok let's just make sure I'm reading these correctly.

Coke(KO)

https://www.google.com/finance?q=NYSE%3AKO&ei=ocvMUoDeNOnvsQeV8gE&ed=us

This dividend is 2.77% which at the last payout was 26cents per share (coming from the Div/yield 0.28/2.77 field).

Did I get that correct? Or is this the projected % at the next payout? If it's not, how do you determine if it'll stay the same, up or down. From what I gather if a stock is doing great then the dividend % will go down - supply and demand.

Most stocks that I have been watching, most from this thread, are in the 2.x% range. I've been trying to find higher ones that I still know the company, searching is hard! :bang:




You read it right --- so that's good!


The names used here are always just examples.... what to look for --- what to think about --- things such as total return etc. So if you have low dividend then you need some growth in capital (thus the total return).

Coke (KO) is a "steady eddie" stock... with a proven RISING dividend.

What's happened this last year is when you have stocks prices rising 30% --- then the percentage gets messed up. So that same .28 a share when the stock price was $37 was just a hair over 3%.

But that's the thing about the dividend paying shares --- the good ones tend to raise their dividend payouts. 5 years ago Coke paid out .21 a quarter now they're paying .28 cents and so on.

I'm not saying anyone should buy COKE -- It's just a good example. So the total return on it over the last 5 years is 104% -- which means in 5 years you've doubled your money. Not bad. And it's pretty safe too...

So that's why I always say it's more about TOTAL RETURN -- that's where the homework comes in. And all of this "depends" --- depends on what you're trying to do -- what kind of an investor you are -- and you totally risk adverse -- can you take on some risk -- or are you all in topedos be damned!

That's why nobody can say -- do this and don't do that.... because everyone is different.

[Vegas69]

Greg, I don't want you to have a day off. I haven't been doing this long but today was interesting.

The DJIA declined .41%.
The Nasdaq increased .3%.

My account went UP .23% today.

What's interesting is 3 out of 4 of best performers increased along with my WORST performer.

Is this just due to my account characteristics or did everybody see this today? Normally the DIJA and Nasdaq seem to follow suit. Why was today different?

I know this is over analytical but I'm trying to learn a little more about the stock market..

[GregWeld]

Greg, I don't want you to have a day off. I haven't been doing this long but today was interesting.

The DJIA declined .41%.
The Nasdaq increased .3%.

My account went UP .23% today.

What's interesting is 3 out of 4 of best performers increased along with my WORST performer.

Is this just due to my account characteristics or did everybody see this today? Normally the DIJA and Nasdaq seem to follow suit. Why was today different?

I know this is over analytical but I'm trying to learn a little more about the stock market..


Good question Todd -- with no explanation except that the DJIA -- is the DOW JONES INDUSTRIAL AVERAGE.... so if you're not invested in much that's actually in the Dow --- then you're not tracking with them.

People don't really understand these indexes.... and without writing a book about it I'll give a brief explanation:


"The Dow" is made up of 30 stocks that they pick --- It's PRICE WEIGHTED - so they add up all 30 stocks and then divide that number by 30 to get the "Average". Since there's ONLY 30 STOCKS that actually make up "The Dow" -- you can see how if you don't own any/many of them - your day can be different than their day.


The NASDAQ --- is made up of every stock traded on it's platform -- so think like 3000 stocks and they are MARKET CAP WEIGHTED --- so the bigger market cap companies pull more than the smaller caps (Cap is the value of the company - which is computed by multiplying all the outstanding shares times the closing market price per share...

[Vegas69]

Makes sense to me, thanks for the explanation.

[GregWeld]

Makes sense to me, thanks for the explanation.

You're welcome!


Years ago I had to actually look all this up for myself - when one of the tv talking heads said that "IBM was taking the Dow down".... I'm like "really" -- IBM all by itself?? Sure enough --- most of the rest of the 30 were doing just fine - but old IBM was struggling and was killing the average.

Personally -- I've given up paying too much attention to the Dow and the NASDAQ averages... they're general trends -- but I've had up years when they've had down... and more importantly I've MADE MONEY every year - regardless of what those two indexes are doing. So do they really matter? Like selling real estate -- yeah the "market" can suck - but that doesn't mean you can't still make money. It'll suck you down if you let it - but it's not the only numbers that matter.

[CamaroMike]

Greg you are a gentleman and a scholar!

[GregWeld]

Greg you are a gentleman and a scholar!




We've obviously never met....

[96z28ss]

Just got another raise. Ford (F) just raised dividend 25% to $0.125 per share.
I bought some in May of 2012 and kept adding to it thru July 2012. The dividend was $0.05 when I first got some. You just got to love getting these increases, not to mention the growth on share price.

[GregWeld]

Just got another raise. Ford (F) just raised dividend 25% to $0.125 per share.
I bought some in May of 2012 and kept adding to it thru July 2012. The dividend was $0.05 when I first got some. You just got to love getting these increases, not to mention the growth on share price.



I own a few shares of Mother Ford (F).... (20,000)... My average cost is $16.12 so I'm not too underwater.... Raising the dividend is the same reason I bought Wells Fargo (WFC) bank (10,000 at an average cost of $39.90)... they just started back with their dividends -- they're profitable -- well run -- and have a history of rewarding the shareholders. I'm hoping over time that WFC doubles and triples the div...

I sold half the WFC I was holding only because I had a very nice gain in the shares - well ahead of what I expected - so took half that gain and held the rest. As it is I have a $62,000 unrealized gain still on the books! That's a keeper.

Ford also has a history of splitting... Not that anyone should buy anything on a lick and a promise. You have to be happy owing it as is -- and anything that comes in the future is just icing.

[redefined]

Any thoughts on Pfizer Inc.(NYSE:PFE)? They went downhill for a long time in the 2000's.

[toy71camaro]

Any thoughts on Pfizer Inc.(NYSE:PFE)? They went downhill for a long time in the 2000's.


What are your thoughts about them? What do you like about them? What do you dislike? What's their "money makers" and what could kill it?

[redefined]

What are your thoughts about them? What do you like about them? What do you dislike? What's their "money makers" and what could kill it?

That was going to be my question for whoever answered. Where did you find the info and why?

I randomly picked them just to get someones take and then ask where they went to do the research. I've been looking them over on yahoo and google finance but can't seem to determine much from there. Assuming I need to do more research to see what their key money makers are, what they have in the works for 2014+ etc. Off to the googles I go.

[redefined]

Altira Group (MO)

https://www.google.com/finance?q=NYSE%3AMO&ei=_lnPUugHx_ixB4N-

Bad because I don't smoke and am not fond at all of cigarets. Also the stock price is towards the top of it's 5yr high. Good or bad? Good because it's growing bad because it could drop anytime? Cigarette sales have steadily declined and not all have picked up on the e-cig market. Lorillard (LO) bought BluEcig which I see all over the place being advertised.

It looks good because from what I know of the tobacco market they seem to own some key players. They have a good % dividend pay.

This stock has been mentioned a lot in this thread. What's to like about it? With cigarette sales continually dropping and the companies offsetting this by an increase in the cost per pack how can they sustain?

[glassman]

its dropping off in our country, not Asia or Europe from what i understand. Plus they hold other companies. I' haven't bought any yet but i'm thinking bout it....

[Vortech404]

Redefined,

I usually visit the company websites to look at the company's products.

http://www.pfizer.com/ for example

You heard of Viagra? lol Do you like the company's products?



John

[GregWeld]

Let's please not turn this into "which stock should I own" thread..... the ideas and discussions would run 10's of thousands of pages and prove to do nothing but confuse people.

I'm not the thread owner - nor a moderator - so you guys are free to discuss anything you'd like - but once it goes into a "stock pickers" thread. You won't see me in here.

Asking how to read something you don't understand etc --- that's good learning for many folks... but trying to pick which stock each person want's to own and why.... that just turns the thread into an unmanageable mess.

99% of the time names are used in here is more for learning how to look at something rather than - this is what you should buy and why. So let's say you are looking at tobacco stocks -- then how do you compare a Lorilard to a Altria to a Philip Morris. Compare their total return - their dividend - where does it fit or not in your portfolio. This is considered a "SIN" stock.... so should be compared and thought of against other such sin stocks -- alcohol etc.

Now - just to answer your question -- Altria (MO) is in both tobacco AND booze...

Yahoo and Google Finance websites are really just for very basic information --- you'll have to log into a financial website such as Schwab etc to get far better details and research.








Altira Group (MO)

https://www.google.com/finance?q=NYSE%3AMO&ei=_lnPUugHx_ixB4N-

Bad because I don't smoke and am not fond at all of cigarets. Also the stock price is towards the top of it's 5yr high. Good or bad? Good because it's growing bad because it could drop anytime? Cigarette sales have steadily declined and not all have picked up on the e-cig market. Lorillard (LO) bought BluEcig which I see all over the place being advertised.

It looks good because from what I know of the tobacco market they seem to own some key players. They have a good % dividend pay.

This stock has been mentioned a lot in this thread. What's to like about it? With cigarette sales continually dropping and the companies offsetting this by an increase in the cost per pack how can they sustain?

[glassman]

Yeah, its easy to get got up in "what" should i do....

But this is a "how to buy" thread, not a "what to buy" thread, although at times i wish it was hahahaha.....

[redefined]

I agree and that's why I ask those questions. My thing wasn't 'should I buy this' it was more of a 'how/where do I research'. If it didn't come across that way, sorry.

Not lookin for someone to tell me what to buy, just trying to learn where to get the info.

I tried my Fidelity account but I guess my account is just for my IRA's and not a 'brokerage' account. So maybe that other information you speak of, the info on Schwab, isn't available to me yet. I'd try Schwab out but sadly due to work reasons I'm unable to.

[GregWeld]

Yeah, its easy to get got up in "what" should i do....

But this is a "how to buy" thread, not a "what to buy" thread, although at times i wish it was hahahaha.....



Well --- it is 'what to buy' --- as long as you listen to me!


NO ---- kidding


It is a what to buy --- but only more what to think about to buy as in great companies (vs something you've never heard of) -- and then researching what other companies that compete or are in the same category...

[GregWeld]

I agree and that's why I ask those questions. My thing wasn't 'should I buy this' it was more of a 'how/where do I research'. If it didn't come across that way, sorry.

Not lookin for someone to tell me what to buy, just trying to learn where to get the info.

I tried my Fidelity account but I guess my account is just for my IRA's and not a 'brokerage' account. So maybe that other information you speak of, the info on Schwab, isn't available to me yet. I'd try Schwab out but sadly due to work reasons I'm unable to.



AH HA -- sorry if I mis-read your questions.



Research is "work" but I don't know where to tell you how to get it. We all have different brokerages etc. so it's hard to tell you what's available on yours vs someone else's.

[redefined]

AH HA -- sorry if I mis-read your questions.



Research is "work" but I don't know where to tell you how to get it. We all have different brokerages etc. so it's hard to tell you what's available on yours vs someone else's.

Yeah, the info wanted you answered by saying at the brokerage website. Don't have a broker account yet, just my IRA accounts so that's prob why.

[GregWeld]

Yeah, the info wanted you answered by saying at the brokerage website. Don't have a broker account yet, just my IRA accounts so that's prob why.



By the way --- I don't smoke or drink -- but I'll cash the check of those that do...

The whole time my wife and I were in Europe - she complained about all the smokers --- to which I would remind her --- GREAT!! SMOKE UP!! 'Cause they're paying for your trip.

It's about making MONEY -- not about virtues or vices... I don't bank at Wells Fargo either - but I own their stock.

[toy71camaro]

Schwab has a good research tool.

In fact, from Greg's mention of that a year+ ago i opened up an account there JUST for that. LOL.

[96z28ss]

I agree and that's why I ask those questions. My thing wasn't 'should I buy this' it was more of a 'how/where do I research'. If it didn't come across that way, sorry.

Not lookin for someone to tell me what to buy, just trying to learn where to get the info.

I tried my Fidelity account but I guess my account is just for my IRA's and not a 'brokerage' account. So maybe that other information you speak of, the info on Schwab, isn't available to me yet. I'd try Schwab out but sadly due to work reasons I'm unable to.

I'd re-read the first 30 pages of this thread. Its a keep it simple stupid approach.
When I first started I was a bit scared, and I spent days researching some of these companies.
There are so many companies out there it was a bit overwhelming but I had to keep going back to the principles that Greg has outlined.
Best of breed companies that pay a dividend. Companies that have been around before I was born, and no way they would disappear. Companies that continue to increase dividends. Companies that have show growth over 5 - 10 year charts.

Its not all about just looking at the research thru your brokerage account.
Greg used a bunch of names on here as examples. One he uses often is Altria (MO) he always said its a tobacco company. I Read Google Finace, Yahoo finance. I also went to Altria.com looked thru there website clicked on everything I could. I found they also owned Vineyards and made Wine. They made wine that was drank at my house A LOT! I didn't even know it. I had to buy some but only after I did some research, cause I need to responsible
for my investments. Some of these large companies own 10 different companies you won't know it unless you research it.

I have 2 accounts now. I have my IRA account (only dividend long term) and I have a personal account that I threw some money into (its a mix of dividend and some gambling) and am planning on opening a 3rd account and moving some of my savings account into. The savings account is just dead money its not making anything in interest.

[toy71camaro]

I'd re-read the first 30 pages of this thread. Its a keep it simple stupid approach.
When I first started I was a bit scared, and I spent days researching some of these companies.
There are so many companies out there it was a bit overwhelming but I had to keep going back to the principles that Greg has outlined.
Best of breed companies that pay a dividend. Companies that have been around before I was born, and no way they would disappear. Companies that continue to increase dividends. Companies that have show growth over 5 - 10 year charts.

Yup. Google is your friend. Everything you can find out about a company. Not just on Google/Yahoo finance. Thats just the pure stock performance data. Not really anything about the company. I would also take a look at David Fish's "Dividend Champions" list. Its a good place to "start". Its got companys broken down into Champions, Contenders, etc based on how many years they've continuously paid/increased their dividend. Gives you some names to start to do your research on to get your feet wet.


I have 2 accounts now. I have my IRA account (only dividend long term) and I have a personal account that I threw some money into (its a mix of dividend and some gambling) and am planning on opening a 3rd account and moving some of my savings account into. The savings account is just dead money its not making anything in interest.

Careful with the "savings" dead money. You don't want to put that into an investment account unless you dont plan on touching it for 5+ years (from what i read, thats a good window). Last thing you want to do is throw it in an account, be down 20% and NEED the money. If you've got a solid 6 month emergency fund and have money left over (after all debt is paid, kids college is taken care of, etc) then yeah, get that extra money working for you. :)

Your emergency fund is your "insurance". Your Get Out of Jail free card. It wont make you any money (mines in a .75% annual return savings account. Its not much, but its something). But most important, its accessible in the event of an emergency.

[GregWeld]

I forget who asked about Altria (MO) --- but here's why I own it... LOL




01/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$12,000.00




That 12K is FOUR TIMES PER YEAR.... and taxed at 20% max rate.

Beats working for a living. LOL

[Sieg]

I forget who asked about Altria (MO) --- but here's why I own it... LOL


01/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$12,000.00


That 12K is FOUR TIMES PER YEAR.... and taxed at 20% max rate.

Beats working for a living. LOL

01/10/2014 Qual Div Reinvest MO
ALTRIA GROUP INC
$52.43

:sieg:

:headscratch:

:smiley_smack:

Slight difference with only 209 shares!

:D

I'll be analyzing my current portfolio holdings for diversity and ranking their ROI this year, then possibly thinning some holdings to reinforce stronger dividend performing positions. Keeping it simple. :thumbsup:

[Vortech404]

Sieg,

209 shares x .48 += $100.32 ;)

John

[Sieg]

Sieg,

209 shares x .48 += $100.32 ;)

John

Ding.......the 100 shares I recently bought must not have cleared in time to qualify as on-record. I thought they'd make the date as that was factor when buying, I'll have to check the details on this one.

Thanks.

[GregWeld]

Ding.......the 100 shares I recently bought must not have cleared in time to qualify as on-record. I thought they'd make the date as that was factor when buying, I'll have to check the details on this one.

Thanks.




You have a settlement date before they went EX?


When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

[protour73]

That's like the 10,795th thing about investing that I've learned from this thread...... another Weld-pearl-of-wisdom :cheers:

When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

[GregWeld]

That's like the 10,795th thing about investing that I've learned from this thread...... another Weld-pearl-of-wisdom :cheers:




THE KEY THERE IS TWO BUSINESS DAYS.... Weekends are NOT business days!

[Sieg]

You have a settlement date before they went EX?


When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

I thought I honestly thought was ahead of the Ex date, but obviously I was not. :ohsnap:

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either. :sieg:

That was TWO bags of dog food! :bang:

[Sieg]

Sieg,

209 shares x .48 += $100.32 ;)

John

........and technically you're wrong. :lmao:

109.xxx in hand and 100 in the bush equals 109 x .48 = $52.43

:underchair:

[protour73]

So many on this thread have talked about using Schwab's research tools and utilizing Google and Yahoo finance pages. I also refer to Seeking Alpha and The Motley Fool websites as well.

......but does anyone have any other reliable sites that help doing research on a company that sells stock that interests you?? :y0!:

[GregWeld]

I thought I honestly thought was ahead of the Ex date, but obviously I was not. :ohsnap:

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either. :sieg:

That was TWO bags of dog food! :bang:



Okay --- but let's talk about a DIFFERENT WAY TO CAPTURE THE DIVIDEND.... and that is trading on the "EX" date.

So -- MOST (not always) of the time a stock will go down almost the identical amount of it's dividend payout on or near it's "EX dividend" date. So let's say
the stock was trading at $50.. and pays a .50 dividend - most of the time even if everything else is trading up that day - you'll see the stock trade down by 50 cents to $49.50. So if you bought that day - basically at a 50 cent discount - and the following day the shares go right back up to $50... you effectively got paid that dividend. You just got it as a discount rather than cash.

Now to do these things - a guy has to be pretty damn active and on the ball. And being on the ball can be very important....

But let's be real here -- it's one thing if you're trading enough shares to make getting that particular dividend "this quarter" (let's say the 12 grand I just got on my MO shares -- guys! That's real money I don't care who you are)... but it's another if you're talking picking up $50 for the quarter... You know - how much effort can you put in to making sure you're going to get that $50 dividend? Yeah it's $50 --- and $50 is $50.... but it's really more important that you just get in to the stock you want to buy or add... Because the day you bought and paid the full $50 each for the shares -- and you missed the dividend and blah blah blah ---- the next week might be the week the market jumps 5% and now your shares are worth $52.50....

So had you realized you'd missed the dividend payout --- and then waited a whole quarter to get in ---- you might have missed the move UP for the entire year.

But you must be careful (which is why I don't usually bring up all this kind of stuff in Investing 102) because trying to trade this way has BIG tax implications that must also be considered! So trading like that inside an IRA or ROTH is one thing --- but in a TAXABLE account -- there are taxes to account for! And taxes on trades can get real big real fast... there's a ton of rules a guy would have to consider... The WASH SALE for instance...

Let's not even turn this into a tax and trading thread... that's just a whole other bailiwick.

There is a website devoted to dividend TRADING -- guys trying to buy the stock pick up the dividend - and then get out and buy another stock to get that dividend and so on - I think it's mostly based on this theory that the stock dips on the ex date and recovers. I've never tried it.... but I'm sure if you're lucky enough and have enough time to "work" at doing that - there's probably a way to make money.

[GregWeld]

I thought I honestly thought was ahead of the Ex date, but obviously I was not. :ohsnap:

Trade Date: 12/30/2013
Settle Date: 01/03/2014
Ex Date: 12/26/2013

Not the first time I've tricked myself.........regretfully it won't be the last either. :sieg:

That was TWO bags of dog food! :bang:



OKAY --- LET'S DISCUSS "OWNERSHIP" ---



You didn't OWN those shares until the SETTLE DATE -- 01/03/2014

So if you're going to try to capture the dividend and play that close to the vest on this stuff.... then you need to allow for the SETTLE DATE which is THREE BUSINESS DAYS. So if EX date was 12/26 -- then you needed to BUY on 12/23 and get a SETTLE DATE of 12/26 in order to be considered an "owner".


Oh the webs we weave!!

[GregWeld]

Was poking around my Schwab account this morning... and stumbled across this. I'm a shareholder in British Petroleum Prudhoe Bay Royalty Trust (BPT).


So what I want you all to LEARN is to read this statement and tell me what the key information is that you need to KNOW if you want to buy a stock and pick up the current dividend.


Regular Dividend of $2.5278 went Ex: BPT began trading ex-dividend today, payable to shareholders of record as of 01/15/2014.


Could you buy that stock today and get the dividend?


What does the "SHAREHOLDERS OF RECORD" mean?


What does the "EX" mean?


What do you think the price per share will do today given that it went "EX"?


The devil is in the details!

[SSLance]

Could you buy that stock today and get the dividend?


What does the "SHAREHOLDERS OF RECORD" mean?




No... Because it will take at least 2 business days between the trade date and the settlement date.

To be a "Shareholder of record" means that you actually own shares of the company on their record, which doesn't happen until the settlement date.

[SSLance]

What does the "EX" mean?


What do you think the price per share will do today given that it went "EX"?



I've always taken the "EX" to mean "after the dividend" but that probably isn't technically correct.

The price per share will automatically drop relative to the amount of the dividend paid.

[GregWeld]

I've always taken the "EX" to mean "after the dividend" but that probably isn't technically correct.

The price per share will automatically drop relative to the amount of the dividend paid.



They were rhetorical questions -- but good to see you know the answer!!


LOL

[GregWeld]

I just want to reinforce these IMPORTANT dividend dates because the terms used can be glossed over by a "newb" and they're important. The MORE you have invested in the names the MORE important they become!


For example:


Regular Dividend of $0.125 Announced Thursday: F announced a new dividend to be paid 03/03/2014 to shareholders of record as of 01/31/2014.



The IMPORTANT date and term here is SHAREHOLDERS OF RECORD ---- and the Date 01/31/2014


REMEMBER that you can't buy on -1/31 and be considered a SHAREHOLDER OF RECORD because of the SETTLE DATE used by your particular brokerage -- Schwab is typically 3 days... your's might be 2 days or it could be longer! You must account for the SETTLE DATE if you want to capture the dividend IF you're factoring that in. Frankly -- I usually don't...

BUT I DO note the dividend date if I'm thinking about selling!! If I can wait to get the dividend AND THEN sell... why not. But of course - like most investing there might be reasons not to hang around til that date... so it all depends.

[GregWeld]

Every day I find a compelling new reason to own stocks that PAY ME to own them.



Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.36 ($5.44 annualized) payable on Feb. 14, 2014, to unitholders of record as of Jan. 31, 2014. This represents a 5 percent increase over the fourth quarter 2012 cash distribution



How many of you have gotten raises for doing NOTHING....



And to top that off -- the shares jumped over a buck today -- so you get your raise in cash and a friggin' bonus!!!

[96z28ss]

Every day I find a compelling new reason to own stocks that PAY ME to own them.



Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.36 ($5.44 annualized) payable on Feb. 14, 2014, to unitholders of record as of Jan. 31, 2014. This represents a 5 percent increase over the fourth quarter 2012 cash distribution



How many of you have gotten raises for doing NOTHING....



And to top that off -- the shares jumped over a buck today -- so you get your raise in cash and a friggin' bonus!!!

isnt that sweet they pay the dividend on Valentines day.

[camcojb]

Every day I find a compelling new reason to own stocks that PAY ME to own them.



Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly cash distribution per common unit to $1.36 ($5.44 annualized) payable on Feb. 14, 2014, to unitholders of record as of Jan. 31, 2014. This represents a 5 percent increase over the fourth quarter 2012 cash distribution



How many of you have gotten raises for doing NOTHING....



And to top that off -- the shares jumped over a buck today -- so you get your raise in cash and a friggin' bonus!!!
My son initially invested in them last year. Then the local "investing expert" from his work told him that for a small investor the extra tax paperwork for that particular stock would eat up any profit. In his words it's a fine investment for a big investor, but not good for my son, so he got out of it. I always wondered if that was true.

[GregWeld]

My son initially invested in them last year. Then the local "investing expert" from his work told him that for a small investor the extra tax paperwork for that particular stock would eat up any profit. In his words it's a fine investment for a big investor, but not good for my son, so he got out of it. I always wondered if that was true.



KMP is a "master limited partnership" and does come with a different tax structure - in that you are a PARTNER in the truer sense of the word... and because they distribute (by law) the profits per quarter you get a K1 tax form.

Because of depreciation etc --- they really distribute your original investment back to you so it's considered a distribution of capital or --- RETURN OF CAPITAL... That way since you're just getting your own money back -- it doesn't carry an "INITIAL" tax burden... BUT when you sell ---- now you're going to have to calculate what tax - if any - is due.

So a very good point Jody --- not a point I'd consider if the shares are held in a deferred tax account (401 etc) and certainly not if held in a tax free ROTH.

My income tax form last year was 184 pages ---- so I doubt it affected the overall cost of tax prep for me... LOL ------ And I wouldn't think for the average person it would take more than 10 or 15 minutes extra if they are using a pro tax prep firm.... BUT it is a point worth thinking about I guess.

I would advise -- and always have advised -- that a quick phone call to your tax preparer BEFORE someone gets into something they don't understand -- is a smart call.

I own a small apartment complex inside Gwen's 401K --- and I did that WITHOUT asking my guy.... and it's been nothing but a headache every year... to the point of my inquiring about just buying it out of the IRA and taking the tax hit. Seems the IRS doesn't like "PASSIVE INCOME" inside a tax deferred account so has mean spirited rules to make you want to avoid doing that.



So just one last thought on this -------- MLP's issue a K1 instead of a 1099.... and for MANY YEARS -- the "dividend" isn't a dividend -- it's treated as a return of capital. So there's no tax hit for many years -- in other words --- you'd have to have owned it for so long that you've gotten dividends that equal your original investment... Once you've reached that point --- all else that comes your way would be treated as "income".

[Vortech404]

So did I make a mistake putting Kmp in my 401k?

John

[dhutton]

My son initially invested in them last year. Then the local "investing expert" from his work told him that for a small investor the extra tax paperwork for that particular stock would eat up any profit. In his words it's a fine investment for a big investor, but not good for my son, so he got out of it. I always wondered if that was true.

TurboTax easily handles this situation. It was hardly any additional effort, just enter a couple of extra numbers from the forms they send you and you are done.

Don

[GregWeld]

So did I make a mistake putting Kmp in my 401k?

John




NO! That's the best place for it!

[GregWeld]

TurboTax easily handles this situation. It was hardly any additional effort, just enter a couple of extra numbers from the forms they send you and you are done.

Don



EXACTLY -- It's no big deal.... It's not like it's some accounting nightmare... no matter what kind of an account it's in. True -- it's a different form.... and does have to be accounted for... But in my book - any time you can get INCOME without it being INCOME.... that's a good thing!

[GregWeld]

The other day Todd was asking about why the DOW was up and his stocks were down -- or maybe it was vice versa...



Today the DOW was off 68 points and I had ONE stock out of all the stocks I own -- and it was down one penny.... (WFC).


I lied --- I had TWO stocks down WFC for one cent and HYG for 4 cents.... OOPS! Huge - just huge! LOL



And here's another thing that I've learned over the years....


One of my stocks was down like $3 early morning --- it closed UP .50 (BPT).

In my old trading days -- I'd have been freaking out about a stock down $3..... and only the idiots that sold down there have themselves to kick....

[redefined]

Tax time and I just got a letter from Principal Bank for a Safe Harbor IRA that has ~$4,500 as a Individual Traditional IRA. Now I don't ever recall setting this up and I'm not sure which job I'd have had that used this place.... I also don't ever recall getting this letter in the past it shows it dates back at least into 2012!

WHAT!?!?! Could this possibly be money that was hiding and is now 'free money'? :idea: *Heads over to the For Sale section*

[GregWeld]

Tax time and I just got a letter from Principal Bank for a Safe Harbor IRA that has ~$4,500 as a Individual Traditional IRA. Now I don't ever recall setting this up and I'm not sure which job I'd have had that used this place.... I also don't ever recall getting this letter in the past it shows it dates back at least into 2012!

WHAT!?!?! Could this possibly be money that was hiding and is now 'free money'? :idea: *Heads over to the For Sale section*



Do yourself a favor --- do not call the numbers on that mail --- or use the website listed ---- GO on the net and look up the numbers etc....


You never know if these are "fishing" mails... you call thinking you have money and give them all kinds of information like your SS number etc. So just check it out FIRST. It's real easy for these scammers to use a REAL outfit -- mail you something where they've got their phone numbers listed etc... and BAM they've got
your info.

[redefined]

Do yourself a favor --- do not call the numbers on that mail --- or use the website listed ---- GO on the net and look up the numbers etc....


You never know if these are "fishing" mails... you call thinking you have money and give them all kinds of information like your SS number etc. So just check it out FIRST. It's real easy for these scammers to use a REAL outfit -- mail you something where they've got their phone numbers listed etc... and BAM they've got
your info.

Yeah I did. I googled and the website has the same information listed. Hrmmm

Even looked up scam for them and couldn't find anyone posting or calming anything.

[GregWeld]

Yeah I did. I googled and the website has the same information listed. Hrmmm

Even looked up scam for them and couldn't find anyone posting or calming anything.



Okay you're good to go then!



FREE MONEY!! What's better than that!!

[Vortech404]

So Greg,
KMP in my tax deferred 401k is ok? What about the UBTI I keep hearing about. Something like you can have up to $1000 dollars in distrabutions and anything over you pay taxes on? To cause less problems would it be better to get rid of my KMP shares and get KMR instead ?

On a side note they brought back the dividend on GM stock

Thanks
John

[GregWeld]

So Greg,
KMP in my tax deferred 401k is ok? What about the UBTI I keep hearing about. Something like you can have up to $1000 dollars in distrabutions and anything over you pay taxes on? To cause less problems would it be better to get rid of my KMP shares and get KMR instead ?

On a side note they brought back the dividend on GM stock

Thanks
John




I can answer that real quick ---- ONLY YOUR ACCOUNTANT should give you tax advice. PERIOD.

[Vortech404]

haha I had a feeling you were going to say that!

[GregWeld]

haha I had a feeling you were going to say that!




The rules are far to complicated --- and the consequences far too onerous regarding taxes... and far too many "it depends". You've just got to consult a tax professional for that kind of info.

I'm probably the WORST tax knowledge guy in the entire universe... and it's a good thing my firm has done my taxes for 25 years.... because MY GOAL is just to make as much money as humanly possible.... and they can figure out what I owe. I just really don't care about taxes... they're just a small percentage of what I make. So I have kind of a convoluted view of them - and I'm not afraid to pay them. He who pays the most wins...

[GregWeld]

Seems there have been quite a few "earnings disappointments" -- along with rather anemic hiring numbers...


I don't make predictions - and I don't change my investments... all cash cows...

But I will say that this "weakness" may overshadow the optimism that 2013 was the beginning of great things to come. That's good and bad. Good because maybe the interest rates won't rise as fast as I thought "could" happen... but bad because the market if a forward looking mechanism. 2013's big gains were based on the forward view of all things being good and great... now if we see they aren't as good and great... then the market will adjust (not good - because it will adjust downward).

So far - this seems to be a "stock pickers" market -- where if you're in the right names - you're okay - but if you're in the wrong names you get taken to the woodshed. Just look at what happened to Best Buy (BBY) (I'd never be in that name anyway - but it's a good example of missing the goal posts!) Compared to a best of breed name like Amazon (AMZN)....

[GregWeld]

I always have to put this caveat in here --- I AM NOT recommending this stock to anyone --- nor is this thread about what stocks to buy or sell. I'm using this as an EXAMPLE only for Investing 102 information --- which is more about how to THINK and what to read about and what's IMPORTANT.


I own 20,000 shares of National Retail Properties (NNN).... I actually currently have a large red number in it -- but have owned it for a long time and I'm not selling nor am I adding to my stake.... but the EXAMPLE here is what we're looking at -- the bold letters being what I consider to be important for stocks that I personally want to own.

So here's my point. I have currently a PAPER LOSS in this holding... But since I'm not selling it -- do I really care? NO. I have to have trust in the company (insert ANY company) that I own that they're well managed and that they're profitable -- and that they're willing to share that profit with me as an owner. The rest will take care of itself.






The Board of Directors of National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, declared a quarterly dividend of 40.5 cents per share payable February 14, 2014 to common shareholders of record on January 31, 2014. National Retail Properties is one of only four publicly traded REITs and 102 publicly traded companies in America to have increased annual dividends for 24 or more consecutive years.

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2013, the company owned 1,850 Investment Properties in 47 states with a gross leasable area of approximately 20.3 million square feet.

[gearheads78]

Sorry guys I put about $4000.00 to work yesterday so you can thank me for the market being down this morning. :lmao:

[toy71camaro]

Sorry guys I put about $4000.00 to work yesterday so you can thank me for the market being down this morning. :lmao:


LOL. Good job!

[Sieg]

Sorry guys I put about $4000.00 to work yesterday so you can thank me for the market being down this morning. :lmao:
:smiley_smack:



:D


I feeling ok right now with the Dow down 220 and my portfolio is only off .5%........so far. :peepwall:

[gearheads78]

:smiley_smack:



:D


I feeling ok right now with the Dow down 220 and my portfolio is only off .5%........so far. :peepwall:

I was .64% down.

I've spent the last 45 days or so waiting for a small pullback before entry and over the last two weeks have been wading my way in. I put the last $4000.00 of the $17000.00 from my 401k rollover in and you saw what happened today. The market knew the last of my dry power was in. :G-Dub:

[GregWeld]

I was .64% down.

I've spent the last 45 days or so waiting for a small pullback before entry and over the last two weeks have been wading my way in. I put the last $4000.00 of the $17000.00 from my 401k rollover in and you saw what happened today. The market knew the last of my dry power was in. :G-Dub:



Classic!


Trust me --- this happens every time. It's a test of your will... It's like they used to tell me if I wanted to buy a boat... put on a slicker - step in the shower - turn on the cold water - and every hour on the hour flush a $100 bill down the toilet... if you can do that for 24 hours - "you're a boater".

You have to be able to stand the sight of a "loss" of capital... even though it IS NOT A LOSS... because you haven't sold... so it's a paper loss. You have to be able to get thru it. If not -- and you get cold feet and SELL -- then you've suffered an actual capital loss. Do that every time you invest -- and you're history. So better to find out right away what kind of an INVESTOR you are.

WE ALL HATE IT. Make no mistake about it - regardless of how much money you do or don't have -- we all hate the sight of red.

[gearheads78]

I have a few small spec positions I will watch closely but the rest I hope to own for ever and just keep adding and waiting for my dividends.

[Vegas69]

Ouch....

[Sieg]

Ouch....
Purchasing opportunities may be on the horizon!

It's times like this that it's wise to have a little cash reserve in your budget.

[Vegas69]

That's what I was thinking.

[WSSix]

I'm thinking I'll wait til the end of January to max out my Roth next year. :D

That or maybe I'll put some more "excess" cash to work here shortly.

[GregWeld]

Okay ---- some "sage advice here".





Never try to catch a falling knife.





What does that mean? It means you never try to game the market --- be patient... hold the course. And once you feel that everything is fine (which it always is long term) then you put some money to work. ONE DAY or TWO DAYS does not define a market - nor does it define your investments.

EVERYONE is expecting a TEN PERCENT CORRECTION.... we have not had one for quite awhile - - which means the longer we go without one - the less time we have until we have one. TEN PERCENT is a correction. Remember markets always average out. We've enjoyed a 30% RISE over one year! 10% back off that is no big deal.... Unless of course - you just got in and didn't get the 30%.... get over it - this happens all the time. Investing takes a great deal of patience and understanding that the market goes UP and it also goes DOWN. Live with it. If you own great stuff - which is EXACTLY why we buy great stuff - you will be rewarded.

Panic? The dogs can always outrun you and you will get eaten.

[Sieg]

In some ways similar to watching waves while surfing.

[GregWeld]

Try to THINK more institutionally. Move glacially. Don't be one of those stupid ass RETAIL INVESTORS the TV talking heads always laugh about.

A retail investor only puts money to work in an UP market -- and then they SELL the minute there's a loss. Everyone else makes their money off these idiots.


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


A phenomena that may be at work and we will see increased rapid selling pressure for a short period. It's called MARGIN ACCOUNTS... Margin allows people to leverage their accounts to buy up to HALF of their account value on margin (meaning borrowed money). Because it's a cash on cash loan - the rates are very cheap. MARGIN is at an all time high. Why? Because people are emboldened in a big ass up market. The big ass up market has been going on since 2009.... and being leveraged like that has been "smart" (smart is debatable).

But --- when you're margined --- the brokerage can make a "call" on your account. Meaning that in a down market you must maintain that borrowing ratio. You have to have $1 in assets for every .50. In a down market that $1 asset might be only .80 and your ratio is upset. You are called by your brokerage and you have til the close of market that day to add money to your account. Failure to do so means they sell assets automatically to bring your ratio into line. It's a "margin call".

If the market is at record high ratio of margin.... which it is.... there's going to be a whole lot of selling .

People on margin will sell to cover their margin -- the more selling - the more margin idiots become freaked out and rush to cover -- or get a margin call... the more margin calls that can't be covered -- and the brokerage just sells indiscriminately... the bigger the quick down market we get... it's like a bloodbath in slow motion. More down means more selling - more selling means more down. Until all the lemmings are OUT. The TV talking heads call it "weak holders". Which is EXACTLY what they are. I call them IDIOTS... which is exactly what they are.


I expect a big couple sharp selloffs... 400 or 500 point days... That will get us to our 10% "correction". Not predicting this -- but this is the scenario that gets set up.

You begin to buy when the stocks you're looking at are down 7 - 8 - 9% NOT 1%

[glassman]

I love sitting here reading your posts Greg, I agree 100%. Everything "averages" out in the long run (emphasis on the word "long" term). And like you said, buy quality, watch the charts, know your companies.

Last time i checked, were still eating, going to the movies, buying toilet paper, putting fuel in the cars...maybe not as much, but were still doing it...(cept the toilet paper part...."insert imogee of happy face on toilet here")....

This is going to be a very tough year for me, I have money in several places. The pension we're setting up for my employees is taking for ever and biz is down 30%. Funny thing is, now is the time to go shopping for better employees, just like when quality stocks are down, go shopping. Interviewed two very good prospects yesterday for our shower door "division"....gotta watch the overhead and trends. Just like we do with the stocks we buy....

[GregWeld]

I L O V E Apple products... but that doesn't mean I can love owning the shares (I DO NOT).... because it's a lot of money tied up per share --- and the dividend is paltry. I just can't justify tying that kind of cash up even if the shares have GROWTH. I need the income...


And then we have today -- where they announced numbers AFTER the market... and note the RED after hours number. OUCH!


That by the way - does not mean it will trade up or down tomorrow during regular hours --- after hours trades usually are very few --- takes too much explanation here --- and isn't important... but you can feel the pain!

Now ---- it's been UP about 25% last year --- so you'd still be far ahead if you'd bought a year ago




550.50 +4.43 (0.81%)
After Hours: 506.04 -44.46 (-8.08%)
Jan 27, 7:59PM EST

[GregWeld]

So this is a "risky" post --- because some of you are investing in non taxable accounts -- and others are investing in IRA's -- and still others are doing both.

These strategies are all DIFFERENT yet investing is the same regardless of what type of account. They're different because of tax implications - and they're different because the non taxable accounts might be for a different purpose (investing for a house down payment etc).

Remember that I personally LIVE off my dividends and other investments... that's a completely DIFFERENT strategy from investing for retirement. I also pay attention to the markets (you have no idea how much time is spent doing this!)... etc. So what I'm doing and why you're doing something have completely different reasons etc.

I use three or four "stocks" for parking cash... JNK - HYG - NLY are the three main ones - and these are the names that have been mentioned in this thread repeatedly. I have also said that these names are used to PARK -- and in TEMPORARILY - cash. JNK and HYG pay a very nice dividend MONTHLY... so if a guy has some cash - he can buy these ETF's and you don't have to wait until the next quarter (3 months) to get some cash flow off them. NLY is a quarterly dividend payer and pays super high dividend percentage.... ALL THREE OF THESE NAMES ARE EXTREMELY INTEREST RATE SENSITIVE! They're the first names (this type) that get killed in a rising rate environment. So if you're not on top of what's going on -- you're going to check your account and you're going to have gotten creamed in this stuff. Leave these to the "active traders" accounts.

So that's all the "disclaimer" ---- it's IMPORTANT.... because this thread isn't about what to do or when or which name to buy and sell... but I can't write a post of Investing 102 without using something for examples.


I sold all three of these names this morning. I had gains in all three. I've picked up dividends off all three as well.... and I wanted to get some cash ready to pick on some more long term dividend payers IF ---- hello here! --- IF --- we get a "correction" (down 10% or so). I don't want to wait until that happens --- or some other event -- and loose money in my "cash parking names" --- so I'll just have to take a small gain while I have it -- and then SIT with employees on vacation -- until and maybe and IF -- we do have a small sell off..... and I'll put all those employees back to work. I had over 3MM in these three names... you guys might have 300 -- 3000 -- or 30,000 whatever it is doesn't matter... what matters is putting yourself in a position to go shopping if we go on sale. Think of it no differently than "Christmas is coming and I need to be ready". Christmas might get canceled.... and we never get the opportunity.. we won't / don't know that.... but if there's a sale --- I'm going shopping!! LOL


I'm not talking about down one day -- boom! I'm talking about a market that just "re-sets" --- a market that re-sets does so over weeks.... and it does it in a matter sometimes that you really don't notice it much. A couple bigger down days --- then some up --- then a week of just down here and there.


So how do I do this?? I have some names I want to add to and some I want to add. I will wait until these names are down 5 - 6 - 7 or so percent... and then I'll just buy a third or a quarter of them at a time. AVERAGING IN. Until I get the position I want. Remember that I can do this because I'm buying a few thousand shares. If you're buying 50 shares you can't do that -- so then you'd want to maybe wait until they're down 7 or 8%. There's no reason to try to wait until you think they're at the very "bottom"! That's nonsense and you'll never hit it. WE ARE LONG TERM.... so if you can just get some shares on sale a little BE HAPPY with that! They will recover... The shares you got on sale might help you average down a position you already have... or sometimes you might average your cost up - even though you bought shares this time on sale. The whole point is --- when stuff goes on sale - take advantage of it if you can and if you can. Don't be afraid of something (the market) just because it's on sale! We don't know how long it's going to be on sale... or when it's going on sale. But if it does... you should be happy.


Think about it like the guy that has been trying to sell his Camaro -- you'd like to own it -- but he's hold his price high and the market might even be going up... and he's thinking about raising his price... all of a sudden the market goes soft and he freaks out and drops his price 10K.... Like Charley did on his Mustang when I bought it! BAM! I'm happy as a clam to have swooped in a grabbed it! Think about stocks the same way. They are no different!!! Get your heads around that and you'll make some real money.

[toy71camaro]

Very insightful post Greg. Thanks for sharing as always!!

[Stuart Adams]

Greg, have you ever had any dealings with Thomas Partners?