Investing 102

[GregWeld]

Out of curiousity, how do some of you decide how many shares to buy? I base it on what I can afford given the amount of money I have at that particular moment. For example, Greg, you picked up 400 shares of Apple & 1000 shares of Chipotle Mexican Grill, how did you come up with those numbers? Why not 500/800 shares? Just wondering everyones technique when it comes to picking shares.

It's a good question but one without a correct answer....

I actually "adjusted" yesterdays purchase after thinking about it -- and sold 500 CMG and bought 200 more AAPL.... so now have 500 CMG and 600 AAPL...

I look at my cash -- and the account that the stock I want to buy is in... and then my LIMIT is 2 or 3% of investable funds. Most people use 5% - but 5% for me gets to be a pretty big $ amount... so it's all just based on what your situation is.

I ALWAYS try to keep a pretty sizable cash position as well.... cash is always king -- you never have to sell into a down period (that can last 2 or 3 years) and you always FEEL BETTER having cash... so I could make that a consideration as well.

[GregWeld]

Good one, Lol.

I added to my STD position today which drops my price per share, not to mention the next dividend, if history repeats itself, will be the big one of the year. " fingers crossed "



I had 20,000 shares and added 10,000 today. I waited until they were down a $1 from my average cost... to add (average down) to this position. They go "ex dividend" on the 10th and they're paying 11% at these prices (remember the percentage of div goes UP when the stock price goes down).

Personally -- I wouldn't "talk up" this kind of a position because of the volatility... and the "unsure" footing european banks are on. Actually the unsure footing the euro GOVERNMENTS are on..... but I think the risk/reward is decent over the long run. I look at it this way -- this stock has a higher chance of going up 25% than Microsoft does. :rofl: Although MSFT has had a decent run lately... so that's an unfair statement.

[GregWeld]

Hey -- How's that gold trade working out for you guys??


OMG....

[Tony_SS]

Hey -- How's that gold trade working out for you guys??


OMG....

Just like stocks... long term success. You get paid to wait. :)

I wish I could afford to buy into gold, now would be a great time!

Greg, PM coming your way...

[Bucketlist2012]

Hey -- How's that gold trade working out for you guys??


OMG....

Actually really good..Not today.

But I have been long for years, but that is why I never recommend what I am doing in certain areas of my mix...Because if you weren't in early, watch out..

But over the last 10 years ? Good..Really good. crazy Gains..

I still see QE4 coming ...I may get off the crazy train within the next 12 months, if QE4 doesn't happen. But it will.

Also plenty of Dividend payers in my Mix.. 14 of the 18 assets that I own are Dividend payers..

But I don't see the Commodity run over yet..Along with the gains my eyebrows should grow back tomorrow..They will print more money soon..

EDIT...One day of tree shaking is no big deal....Back up 2 Grand this morning, in the first Hour....Wait until they bail out more home loans, and just wait until they bail out the Student Loans..

More printing on the way....And when that happens ? I will be waiting.

So yes, Commodities have and will be very good to be..

[Tony_SS]

Actually really good..Not today.

But I have been long for years, but that is why I never recommend what I am doing in certain areas of my mix...Because if you weren't in early, watch out..

But over the last 10 years ? Good..Really good. crazy Gains..

I still see QE4 coming ...I may get off the crazy train within the next 12 months, if QE4 doesn't happen. But it will.

Also plenty of Dividend payers in my Mix.. 14 of the 18 assets that I own are Dividend payers..

But I don't see the Commodity run over yet..Along with the gains my eyebrows should grow back tomorrow..They will print more money soon..

Here's my theory... Gold hit a huge bubble with all the hype when you started seeing commercials on tv and radio. It's being deflated now, and they can attempt to suppress it, but they can't control the market, the trajectory is still going no where but up as long as they keep printing dollars.

[Bucketlist2012]

Here's my theory... Gold hit a huge bubble with all the hype when you started seeing commercials on tv and radio. It's being deflated now, and they can attempt to suppress it, but they can't control the market, the trajectory is still going no where but up as long as they keep printing dollars.

There are many more bailouts in the works... The Housing that they tried to SAY is ok, is not OK...More government aid is happening and will happen..

Recently BEFORE they bail out the student Loans, they added the Illegal alien loans to the books..They will bail that out soon..

People can try to say that gold will fall, HELL they wish it will so they can be Right...Wrong...

Stimulus will continue...Printing will continue...Commodities will stay high..

People say it is overvalued....Nope...Just wait...I guess I have made my post, and now let time be the guide...we will see , won't we ?:cheers:

[GregWeld]

Note that AT&T went "ex dividend" today.

:woot:

[GregWeld]

There are many more bailouts in the works... The Housing that they tried to SAY is ok, is not OK...More government aid is happening and will happen..


In my market -- and I'm trying to buy houses in Portland Oregon ($350K range) and Seattle Washington ($800K range) - the market is HOT...

Every house we've had interest in has gone pending before we can even think about making an offer. There are now BIDDING WARS going on with multiple offers and back up offers.

I have two friends here (Seattle) in the business. Art called yesterday to tell me about a house - and then said a house he just listed at 1.3 million - had FIVE full price offers and one offer at 1.4 million.

Remember that the list of LARGE companies that are doing well headquartered here in the Seattle area will blow your mind... it's just that people don't think about lowly Seattle as ANYONES headquarters for anything.... but it is. High pay - high quality jobs make high priced housing.

[Tony_SS]

In my market -- and I'm trying to buy houses in Portland Oregon ($350K range) and Seattle Washington ($800K range) - the market is HOT...

Every house we've had interest in has gone pending before we can even think about making an offer. There are now BIDDING WARS going on with multiple offers and back up offers.

I have two friends here (Seattle) in the business. Art called yesterday to tell me about a house - and then said a house he just listed at 1.3 million - had FIVE full price offers and one offer at 1.4 million.

Remember that the list of LARGE companies that are doing well headquartered here in the Seattle area will blow your mind... it's just that people don't think about lowly Seattle as ANYONES headquarters for anything.... but it is. High pay - high quality jobs make high priced housing.

Beware! The same thing was going on everywhere before the bubble.. IMO, thats a sure sign of one, where people drive up values in a frenzy.. they end up overvalued and crash down.. the PNW is a fad right now I believe.. a year from now it will crash, IMO.

Here in the midwest we have been stable, but declining still. We have not seen the bottom in housing, no way. But that won't stop new bubbles from forming elsewhere with these ultra low rates the Fed is holding.

[Bucketlist2012]

They haven't let all the foreclosure even through the system yet..

And a new wave of Foreclosures is coming... Then the Student Loans ???


Look up how much money is going to be bailed out...They will, they have to..

Depending on who is in charge, they WANT to...

So there will be stimulus or aid, or loans, or whatever they want to name it...

But Americans will not go for Austerity and Cuts that are needed...They will revolt in some form or another..Spoiled children that won't take the small pill now..Well they are going to take the pill, now or later...

And I don't store ammo, or Gold. I am not buying commodities to live through the entire collapse of society..Haha..I have no time to think that way..

But they laughed at me when I added more Gold at 600. Then they really laughed when I bought at 800. They cried laughing at 1200. Then they thought I lost my mind adding at 1400.

But I do have enough Dividend payers monthly to not bank on Gold or commodities to be the answer. Just an add to my Blend..

Could it go either way ? Yes...But it won't break me..I still think we are in for a reset..

[Tony_SS]

Americans wont have a choice.. Banks dont want hyperinflation.. that's their loss, they'll put the loss on the productive class and steal investments, just like they did in 08.

There's going to come a time when the Fed will just stop buy govt debt and the markets will suffer... I wish I was wrong, but that's what signs are saying.

Anyway I don't hijack this thread with my doomsday prepper talk lol :willy: but there were a whole LOT of people blind to seeing what was coming in 08.. I wasn't one of them. Nothing has changed since then except they've pumped and inflated more, so there will more bubbles a'comin...

[GregWeld]

Beware! The same thing was going on everywhere before the bubble.. IMO, thats a sure sign of one, where people drive up values in a frenzy.. they end up overvalued and crash down.. the PNW is a fad right now I believe.. a year from now it will crash, IMO.

Here in the midwest we have been stable, but declining still. We have not seen the bottom in housing, no way. But that won't stop new bubbles from forming elsewhere with these ultra low rates the Fed is holding.


I don't think you understand the economy here. We NEVER had high unemployment -- nor do we have the foreclosure issues elsewhere in the country.

It's hard to look outside the box if you're not somewhere that is not having the same issues. Employment and job opportunities are what drive housing higher or lower. Think DETROIT.... low pay - not a lot of opportunity.... versus "Silcon Valley".... high job growth - high pay - high housing prices - maybe 1 or 2% unemployment. Ditto Seattle. If you're a housing framer - you suck... if you are in high tech sales or a software engineer or programmer - you have multiple job offers at 100+ K per year and all the benefits you want.

The government may be busy bailing out Louisiana - but they've got nothing to do around here.

[Tony_SS]

I don't think you understand the economy here. We NEVER had high unemployment -- nor do we have the foreclosure issues elsewhere in the country.

It's hard to look outside the box if you're not somewhere that is not having the same issues. Employment and job opportunities are what drive housing higher or lower. Think DETROIT.... low pay - not a lot of opportunity.... versus "Silcon Valley".... high job growth - high pay - high housing prices - maybe 1 or 2% unemployment. Ditto Seattle. If you're a housing framer - you suck... if you are in high tech sales or a software engineer or programmer - you have multiple job offers at 100+ K per year and all the benefits you want.

The government may be busy bailing out Louisiana - but they've got nothing to do around here.

So building and construction is not booming up there? I would think it would be if that economy is thriving....

I just get cautious when bidding wars happen on property.. it tends to start to snow ball into hype and overvaluation...

[GregWeld]

So building and construction is not booming up there? I would think it would be if that economy is thriving....

I just get cautious when bidding wars happen on property.. it tends to start to snow ball into hype and overvaluation...

OVER BUILDING is not happening here -- and if you want to buy a million dollar condo - you probably have a choice of 1000 or more of them in the Seattle and Bellevue area.

[toy71camaro]

know any one looking to pay seattle wages for telecommuter for Tech support/software techie stuff? lol :lol:

[Tony_SS]

OVER BUILDING is not happening here -- and if you want to buy a million dollar condo - you probably have a choice of 1000 or more of them in the Seattle and Bellevue area.

Good to hear.. sounds like a case of short supply.. hopefully those sale values then are legitimate and not inflated. :thumbsup:

[GregWeld]

know any one looking to pay seattle wages for telecommuter for Tech support/software techie stuff? lol :lol:



Too late! We sold Isilon Systems in 2010..... to EMC.


I know nothing about nothing now.



:cheers: :woot:

[GregWeld]

Way back in the thread was some discussion regarding Exxon - Chevron - Conoco Phillips....

I bought Conoco after doing some research...


This is just some 'news' that could be of interest

ConocoPhillips (COP) won the approval from its board of directors to split its refinery arm, Phillips 66, in a move to further accelerate the value of both entities.

In July last year, the third biggest U.S. integrated oil company, following ExxonMobil Corporation (XOM) and Chevron Corporation (CVX), planned to separate its upstream oil and gas exploration and production unit from its downstream refining division into two stand-alone, publicly traded corporations. The move is expected to create the largest refining company in the U.S. (with a capacity of 2.4 million barrels per day) and the largest exploration and production (E&P) player based on oil and gas reserves.

Following the closure of market on April 30, 2012, the groups – with headquarters in Houston − will be alienated through a tax-free distribution of Phillips 66 shares to ConocoPhillips common stock holders. The shareholders of the E&P arm will receive one share of Phillips 66 common stock for every two shares of ConocoPhillips stock held at the close of business on April 16. The refinery unit will trade on the New York Stock Exchange under the symbol PSX. Prior to the distribution, Phillips 66 shares will trade under the symbol PSX WI in a "when-issued" public market.

[toy71camaro]

Good news, for you. ;)

I ended up going with Chevron... down 4.5% now, but they'll turn around.

My curiosity sits at why you chose conoco out of the group? What did you see "different" than the others?


alternatively.. would news like this "spark" a purchase? since you are knowing its going to split in the near short term?

[GregWeld]

Good news, for you. ;)

I ended up going with Chevron... down 4.5% now, but they'll turn around.

My curiosity sits at why you chose conoco out of the group? What did you see "different" than the others?


alternatively.. would news like this "spark" a purchase? since you are knowing its going to split in the near short term?

COP has a better dividend than CVX or XOM.... has better 3 year total return... and a very good 5 year TR.... and they have the split going for them.

The other two did NOT have that.

[GregWeld]

I missed your other question and think that it is the most relevent to Investing 102

You asked would a split event like this spark buying interest? Meaning - would the announcement of a split in a stock or some other big news event cause me to buy a stock?

I buy on the fundamentals ONLY.... and if there's a split... or a buyout... or some other "news" then it's just a freebie. Usually -- if I already own the stock and have for at least a year and one day (LTCG's) I will SELL half of the holding if I see a big run up. I can always buy back in.

The fundamentals of COP looked better in comparison to CVX and XOM...

[toy71camaro]

Gotcha. That makes sense.

Nice pick. :thumbsup:

For whatever reason, when i was doing my comparisons for which of the oil stocks i would buy, that one didnt even get on my list. doh.

So, that brings me to another question... Since most "investing 102" people dont know the "entire market" we are looking to get in, where is a good place to find this info?

If i recall, i just went to schwab and looked at one of the pages (likely, for CVX) and it showed similar companies or something like that. In which I wrote down/researched XOM, BP and RDSA (and of course, CVX). I ended up with CVX due to hits mediocre dividend (compared to the other 3, it was the 3rd on the scale), but its overall higher returns in the 1/3/5/10 year marks.

So somewhere along the line, I "missed" the "competitors" to research.

[Bow Tie 67]

One place this thread has turned me onto is Seeking Alpha. I'm inundated with emails on prospects as well as articles on my current positions. But I do take everything with a grain of salt, and love reading the comments on the articles. Lots, if not to much info, but it gives me ideas and positions I can research and get a feel for. Then I can make a more informed decision based on facts and if I feel comfortable with that position.

[toy71camaro]

One place this thread has turned me onto is Seeking Alpha. I'm inundated with emails on prospects as well as articles on my current positions. But I do take everything with a grain of salt, and love reading the comments on the articles. Lots, if not to much info, but it gives me ideas and positions I can research and get a feel for. Then I can make a more informed decision based on facts and if I feel comfortable with that position.

Same here...

I setup my "roth" portfolio on there, as its easier to track the days ups/downs. I also setup a "watch" list. Where anytime i hear someone talking about a good "dividend" company, i toss it on there, for future review. :)

[GregWeld]

One place this thread has turned me onto is Seeking Alpha. I'm inundated with emails on prospects as well as articles on my current positions. But I do take everything with a grain of salt, and love reading the comments on the articles. Lots, if not to much info, but it gives me ideas and positions I can research and get a feel for. Then I can make a more informed decision based on facts and if I feel comfortable with that position.



You can go into Seeking Alpha and select what emails you receive.... I only get the Dividend Investor stuff....

[toy71camaro]

I just ran across this, and not sure how "helpful" it really is.. but seems it would be pretty important..

David Fish, on Seekingalpha has a "U.S. Dividend Champions" spreadsheet (or PDF), of a few hundred dividend companies.

I ran across it a while back, and it was a little over my head.. i'm going to take a look at it again..

Anyone else use this for help "finding" (not necessarily, choosing) their stocks?

Here is his most recent article about it, and updated spreadsheet: http://seekingalpha.com/article/472211-april-2012-dividend-champions-now-with-beta

[GregWeld]

I just ran across this, and not sure how "helpful" it really is.. but seems it would be pretty important..

David Fish, on Seekingalpha has a "U.S. Dividend Champions" spreadsheet (or PDF), of a few hundred dividend companies.

I ran across it a while back, and it was a little over my head.. i'm going to take a look at it again..

Anyone else use this for help "finding" (not necessarily, choosing) their stocks?

Here is his most recent article about it, and updated spreadsheet: http://seekingalpha.com/article/472211-april-2012-dividend-champions-now-with-beta


I looked at this some time ago -- way too much info and not organized in a helpful useful way.

Schwab has tools that can help you set criteria you want to search for and then narrow your focus.

The problem for most people with investing -- is when they start to only look at numbers and don't really know the company or have any "faith" in the company. Next thing that happens is something (the market maybe) blows up and they start looking to bail. That's why I say - if a guy has 100K to invest - just start by looking up the companies that you use - buy from - are around the streets you drive down... then compare those to similar businesses -- and this will give you a good start.

[WSSix]

lol, I chose OXY over Conoco. Oh well.

[GregWeld]

Don't get all caught up in small scale ups and downs... and your choices for individual stocks.

When you roll out the 10 year PRICE appreciation --- you'll see this:

OXY --- UP 553%

CVX --- UP 140%

COP --- UP 148%


No bad choices in any of these in my book. Anytime you have 100% + price appreciation (capital appreciation) AND you're getting a dividend on top of this! WTF -- no shame in this house!

[GregWeld]

Responding to the "where do I look for comparisons" question...

There's no one source for "everything"... and you can make comparisons until your brain is on fire. If you are looking for "names" in sectors -- google the ETF in that sector -- say "OIL COMPANIES" or something similar -- you'll get so much information that you'll be on overload in a nanosecond.

This is why I say -- for "investing 102" that you have little more to do than drive down a busy street and make note of the big names you see. Which one do you like - which one do you purchase from...

So let's say there's a Chevron - an ARCO - and a SHELL gas station. Just start to compare those and see where that takes you. Doing a minimum amount of research on just those three - will bring up other names... and if they're familiar - look them up -- that will bring other names to mind - or maybe they're mentioned.

The problem for most people is there are TOO MANY names once they get started. And the key is not to become a Mutual Fund and load up on all kinds of crap you don't really know anything about. Keep it simple!

Find out the SECTORS you want to investigate.... so make those big and broad.... ENERGY... within energy you'll find pipes - drillers - retailers - refiners - some that do both or whatever... but this is when I'll remind you to find names that you know! If you don't know the name and have no idea what they do or why -- then you shouldn't even bother investigating. You'll be wandering around aimlessly for weeks if you start down that path. :willy: :lol:

Unless you're running a 100 million dollar fund... keep your investing simple. Keep it diversified. Make sure you understand what you own.

There's a zillion companies -- there's very few "sectors" - so I'd start with sectors - because that will get you to see diversity. Energy - consumer - finance - transportation - Industrials - etc. So once you have that idea in your head - just google "Industrial mutual funds". What I did then - for this post - is highlighted the first "SYMBOL" that came up and said "search google" which took me to the google finance website and their chart etc -- I scrolled down to see what they top 10 holdings were.... on that particlular list there was like one company I recognized -- so I went back and found another symbol and did google search on that one - it's top ten was a who's who of Industrial companies I knew... GE -- Honeywell - United Technologies - Cummins - Catapiller etc.

My take is -- if you threw a dart at the top ten holdings of this mutual fund - did a minimum amount of research and compared these top ten industrial names - you'd find one that had great total return = paid a decent dividend = and was a company you'd want to own. Move on to another sector....

I know this sounds simple to some and overly complicated to others -- but it will work for you.

Remember the number one thing.... just getting started -- it will change your life forever. Once you're hooked on making money -- you'll find it the best addiction you've ever had. :cheers:

[toy71camaro]

So let's say there's a Chevron - an ARCO - and a SHELL gas station. Just start to compare those and see where that takes you. Doing a minimum amount of research on just those three - will bring up other names... and if they're familiar - look them up -- that will bring other names to mind - or maybe they're mentioned.

Thats somewhat how i ended up with CVX, there's quite a few of them in our town. Coupled with their dividend increases, solid returns, etc.



There's a zillion companies -- there's very few "sectors" - so I'd start with sectors - because that will get you to see diversity. Energy - consumer - finance - transportation - Industrials - etc. So once you have that idea in your head - just google "Industrial mutual funds". What I did then - for this post - is highlighted the first "SYMBOL" that came up and said "search google" which took me to the google finance website and their chart etc -- I scrolled down to see what they top 10 holdings were.... on that particlular list there was like one company I recognized -- so I went back and found another symbol and did google search on that one - it's top ten was a who's who of Industrial companies I knew... GE -- Honeywell - United Technologies - Cummins - Catapiller etc.


duh! why didn't I think of that. That's the little piece of the puzzle i was looking for. :cheers:

[GregWeld]

duh! why didn't I think of that. That's the little piece of the puzzle i was looking for. :cheers:



That's what I'm here for! :rofl: :faint:

[WSSix]

Oh, I'm not worried. I just found it funny that I was comparing those two and, like the little man that makes the stock go down right after you purchase, I end up choosing the one that doesn't separate into two companies.

Honestly not sure about the other companies but Marathon is also two "separate" companies. Marathon Petroleum and Marathon Oil. Same situation, one's upstream and the other is down stream.

I ultimately chose Oxy anyway because I do so much work for them and am aware of what they are trying to do which is expand production and cut costs. I think they'll do just fine.

[GregWeld]

I think they'll do just fine.



So do I - and the past shows they have done just fine. :cheers:

[96z28ss]

Well I entered the market. I took some money I had in a 401k and rolled it over to a self directed IRA. Just incase you were wondering thats why the market is down today! LOL

[GregWeld]

Well I entered the market. I took some money I had in a 401k and rolled it over to a self directed IRA. Just incase you were wondering thats why the market is down today! LOL



BUTTHEAD!

[toy71camaro]

Speaking of oil companies...

they are all taking a hit today... that puts CVX down 7.5% for me...

Debating whether or not to take the few hundred i have saved up waiting to reach 1k for my next purchase, or use that to buy some CVX on sale. :question:

I'm in CVX for 1k (@ $110.10/share).. and have $416 ($7 commission for trade) waiting to be used (was saving it for my next 1k purchase). Not sure if its worth it or not.



On a side note.... 4/10/2012 DIVIDEND DIVIDEND:MO = $13.57 :woot: :cheers: :lateral:

[96z28ss]

sheesh maybe I whould of waited a week

[toy71camaro]

sheesh maybe I whould of waited a week

Nah... its all your fault. if you wouldnt of joined in, the markets would be up a few points today. :lol:

j/k... there's that little guy yellin 'He's in! take the market down and see if he can stand it!"

:cheers:

[GregWeld]

I would wait to buy == and don't get all nervous about less than 10%...


Summer is usually the time to buy... the old "sell in May and go away" usually plays out - and when they're sellin' you want to be buying'

[toy71camaro]

ok... that's a safe bet then...

I wasn't worried about being "down" 10%.. i was worried about do i go buy them when their on sale now.. or wait and see if they go on better sale later. lol

I think I'll hold off on any "on sale" purchases (unless it goes waaay down), and continue saving my 1k per buy (about every 2.5 months) and continue diversifying.

Although.. with such low trans fee's for Sharebuilder ($2/buy), i can stagger my buy every 2 weeks, and limp in to do a little better dollar cost averaging.. i dunno. we'll see. (normal buy is $7).

[GregWeld]

Patience --- save up some dough -- collect some dividends (they should be reinvested if you checked the right box) and averaging in over TIME -- is what get's 'er done.


So there is "averaging in" and there is "trying to catch a falling knife"... they're different and there's a lot of learning going on to know the difference.

The market has gone dang near straight up for 3 or 4 months.... it's UP what it should be up in a year.... and then there's this thing called "on average" --- so if the average ANNUAL increase in the market is 10% -- and we've done that all in the first quarter -- the next couple quarters might kick our butts to bring that average in line with what's norm.

Sometimes it's better to pause and "take stock" (had to throw that in there) of where we're headed and what's up next...

Remember this too... this is why we LOVE our dividends! Because I got three of them between yesterday and today... and that's real cash - regardless of what the stock price is.

[GregWeld]

So much for that buying on the dips!

HA!

I don't know about you guys - but I think this market is just going to take us along for the ride. Danged if I can guess what's it's going to.

Must be why I've fallen in love with getting dividends... they just keep coming regardless of the ups and downs. :thumbsup: :D

[toy71camaro]

So much for that buying on the dips!

HA!

I don't know about you guys - but I think this market is just going to take us along for the ride. Danged if I can guess what's it's going to.

Must be why I've fallen in love with getting dividends... they just keep coming regardless of the ups and downs. :thumbsup: :D



lol. wasnt a long pullback... oh well. didnt affect me either way. I still got my MO dividend :D :D :cheers:


Been sharing advice from here with a couple other people. Trying to get them on the right track as well. :lateral:

on a down note.. i STILL havent figured out how to re-balance my 401k.. doh... I did print out every funds "report card" from schwab, to try and compare using their tools.. but, its a challenge.:(

[CRCRFT78]

I have a question about "The Asset Play". While reading Peter Lynchs book, One Up on Wall Street, he mentions looking at the the assets a company may have in its possession when researching stocks. One thing that comes to mind is the land owned by the military branches being turned back into civilian property. There are a lot of old bases being handed back to the surrounding communities to build houses on for residents of those cities, Concord California being an example of one. Are there possible investment opportunities in this in the form of government bonds, etc?

I understand we are trying to keep this Investing 102 but one constant I keep hearing when starting out is to look for the investment that is right in front of you that you normally may not consider. With the redevelopment of the bases back into civilian life, are there investment opportunities in this and what types?

[GregWeld]

Jose --

Kudos to you for keeping your eyes open - and your ear to the ground!


#1 - Let me address your "bond" question.... because that is a good Investing 102 subject.

None of you should be in any type of "bonds" at your ages... and even more important -- not inside of any retirement account.

If you can buy high grade CORPORATE BONDS -- just for the ultra high dividend some of them pay - that would be okay.... but (big butt in the room) what you're going to give up with BONDS is CAPITAL APPRECIATION! Very important part of investing is to get a dividend AND the capital appreciation over time.

I have bonds -- but I'm OLD (will be 59 this summer) and I'm retired... so bonds are okay for me - and I STILL DON'T LIKE THEM. They are a "vehicle" to keep my taxable income "down" (that's a laugh by the way)... but I will hold these bonds for 1 to 5 years and have absolutely ZERO capital growth.. so like most things, there's a trade off in here.

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


Okay -- Now on to the other question. I have no idea what is available to invest in regarding these properties. I know that Alameda County got the Alameda Naval Air Base back -- and there's been lots of discussions with what to do with it. There's waterfront - there's acreage galore... and as you all should know -- the county / city / state -- want these to become tax revenue not overhead.

Here's the caveat I'd use for all Investing 102 readers..... Generally when people get into investing trouble -- it's when they step into something they're not knowledgable about. Overreaching in any style/type of investment is a big mistake. So I'd just look to see if there is developments (not necessarily property development - but "developments" as in what's coming down the road). Let's say you operate a local gas station -- then you might want to see if there's going to be a location for one in the newly developed "area".

My "sage" advice however is to always remember -- when you invest with "others" ---- they're just people ---- and your investment is then with other people. They'll paint a rosy picture... and everyone will be all jacked up about the "can't lose" proposition... This is when you have to stick to your guns and only invest what you can lose... because more often than not -- it will be a loser. I've done enough of them that I can say that with certainty.

If you want to play "housing" development ---- the best way to do that is investing in an LLC = so just buying a share or two when the developer / owners make it available. Typically you need to be what's called an Accredited Investor -- with a sizable net worth -- in order to be legally allowed to invest in stuff like this... because they're highly illiquid... so they want to make sure you have "other money". But they spin off nice % of income and can have huge upside appreciation when the group decides to sell.

I would check with the building department to see what plans have been in the hopper --- and then just see what/who is doing them then make contact -- then REALLY REALLY check them out.

I've done lots of these kinds of investments as an investor (apartment LLC's) and they've been very lucrative. I invested in a 344 unit Class A apartment complex in Tucson, AZ and it returned 117% capital appreciation in 4 years! I'll take that kind of money any day!

But there's many ways to play real-estate --- and sometimes it's a lot less nerve wracking to just invest in one of the big publicly traded REITS (Real Estate Investment Trusts) that pay nice dividends and have upside potential as well. You can find lots of 'em searching Schwab etc. I have one now - called National Retail Properties (NNN).. that pays a great dividend (6+%).

Or if you think housing is ever going to come back -- now might be a good time to bottom feed on the big builders -- Lennar - Pulte - etc.... But do some good research and pay particular attention to WHERE they are building.

[CRCRFT78]

I'm not sure where I'm trying to go by asking that, its definately out of my investment range, both financially and based on my knowledge level. I'm really looking for that outside of the box type of investment. The problem I see with this is that the market adjusts almost instantly to any type of investment news. So unless I had some sort of insider information, I'm positive there are others thinking like me.

With that said, I'm comfortable applying what information I do have and putting that towards my retirement accounts. I'm now trying to think about those investments where I won't have to wait for retirement to enjoy. I'll be 35 in July and I would like to start enjoying my investments (granted they're positive) by 45 while gradually slowing down having to work for someone.

On another note, forgive me for drifting, when it comes to the redevelopments of these old bases or the building of new football stadiums (Santa Clara County), should I look at the developers and see if they are traded publicly or part of a REIT? Along with doing my homework to make sure they are worth investing in of course.

[Sieg]

I still got my MO dividend :D :D :cheers:
+1 It was my first from MO. :thumbsup:

[Sieg]

9:49 AM Ford (F +0.2%) and Dow Chemical (DOW +1.5%) announce a JV to explore better ways to use carbon fiber in car and truck components. The aim is to improve fuel efficiency by making vehicles lighter, with Ford aiming to cut between 250 and 750 pounds from the weight of its cars and trucks by 2020. (Read the comments on this)
---------------------------
I believe some thanks goes out to the Formula One engineers for making this a possibility.

[GregWeld]

Gotta LOVE those dividends!!!!

04/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$6,150.00



:rofl:

[Sieg]

Gotta LOVE those dividends!!!!

04/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$6,150.00



:rofl:
Heck that might even cover the first service on the Toter. :unibrow:

[booah]

I have a question.
I have shares in an energy company CoP and they are about to reposition the company splitting the refineries and downstream side of the company to become Phillips 66. When the split happens they are giving every shareholder 1 Phillips 66 share for every 2 CoP shares they own. If you don't have the brokerage set up to accept the shares they will automatically sell the new Phillips 66 shares and give you the cash. You get hit with capital gains for the income tax year.
My question is: Do companies such as this lose share value right off the bat and then gain or is it just a guess?
I need to know what to do within a week and get accts set up keep, the Phillips shares or take the money and run, which is the default easy option.

[GregWeld]

I have a question.
I have shares in an energy company CoP and they are about to reposition the company splitting the refineries and downstream side of the company to become Phillips 66. When the split happens they are giving every shareholder 1 Phillips 66 share for every 2 CoP shares they own. If you don't have the brokerage set up to accept the shares they will automatically sell the new Phillips 66 shares and give you the cash. You get hit with capital gains for the income tax year.
My question is: Do companies such as this lose share value right off the bat and then gain or is it just a guess?
I need to know what to do within a week and get accts set up keep, the Phillips shares or take the money and run, which is the default easy option.




Keep all the shares.... and yes -- you're per share value will get readjusted to reflex the split. BUT --- I'd hold both companies.

From there -- if anyone had a crystal ball and could see the future -- we'd all be rich.

:thumbsup:

[GregWeld]

Heck that might even cover the first service on the Toter. :unibrow:

Or two tanks of diesel!

[Sieg]

Or two tanks of diesel!
I should have known you upgraded to larger tanks. :rofl:

[Woody]

So if you wake up and see Annaly Capital (NLY) down it's because it went "ex-dividend" today... so it's down equal to the dividend payout... This is totally normal. Don't freak out!


:lol:

Greg,

Can you explain this. It seems like if the stock price goes down "equal to the dividend payout," your return would be zero. What am i missing?

[jeff71]

Wow... theirs a lot of info to read through here.

I read through about 15 pages and didn't see much on Roth IRA's. I listen to Dave Ramsey daily and he swears by Roth's.

Greg whats your thoughts?

[Bow Tie 67]

Wow... theirs a lot of info to read through here.

I read through about 15 pages and didn't see much on Roth IRA's. I listen to Dave Ramsey daily and he swears by Roth's.

Greg whats your thoughts?

I'll try to quote Greg correctly " Best gift the government gave us "

[toy71camaro]

I'll try to quote Greg correctly " Best gift the government gave us "

i was going to say something similar.. but, didnt want to misquote him. heheh.


If i recall.. Roth IRA = THE BEST.. you pay taxes now, and if your money grows to hundreds/thousands/millions later, you dont have to pay squat on that when you take it out.

But, there is some wiggle room, where it may make more sense to contribute to a company 401k/pre-Tax ira. if your on that "tax bubble" amount, and dumping money into a 401k can lower your tax bracket, it may be a wise decision to do that.. but thats something you'll have to look into, and decide.

[GregWeld]

Wow... theirs a lot of info to read through here.

I read through about 15 pages and didn't see much on Roth IRA's. I listen to Dave Ramsey daily and he swears by Roth's.

Greg whats your thoughts?


Pound as much money into a ROTH IRA as the law will allow! Best thing that ever happened to the American public!

Put in AFTER TAX money -- allow it to grow to retirement and beyond - and pull it all out tax FREE.... Mana from heaven man!

[GregWeld]

Greg,

Can you explain this. It seems like if the stock price goes down "equal to the dividend payout," your return would be zero. What am i missing?



Woody --- when the company pays out "cash" for a dividend -- they are worth less... just like if you get paid on Friday you have "X" amount... then on Monday you pay your bills -- you're worth less (or worthless - guess it depends).

So the market "adjusts" the share price accordingly. In most cases - most of the time - the stock gets taken right back up again. So over time - you're going to have capital growth AND will have collected the dividend.

Take a look at any company that you're going to invest in - and check out the 3 - 5 - 10 year chart - you'll see - if it's a company worth investing in - that they've been paying a quarterly dividend... and at the same time - the price is higher over that long period of time.

[Woody]

Woody --- when the company pays out "cash" for a dividend -- they are worth less... just like if you get paid on Friday you have "X" amount... then on Monday you pay your bills -- you're worth less (or worthless - guess it depends).

So the market "adjusts" the share price accordingly. In most cases - most of the time - the stock gets taken right back up again. So over time - you're going to have capital growth AND will have collected the dividend.

Take a look at any company that you're going to invest in - and check out the 3 - 5 - 10 year chart - you'll see - if it's a company worth investing in - that they've been paying a quarterly dividend... and at the same time - the price is higher over that long period of time.

Greg,

Thanks for taking the time to explain. I understand what you are saying. I guess I am looking at a very short term example in the case of NLY.

My thinking is that quoted yield is say 13% per year which equates to approximately 3.25% per quarter. So my thinking is that assuming the market is stable you should earn about 3.25% per quarter just on the dividend. So Nly was trading about 15.96 on January 2. At the end of the first quarter, after ex-dividend, it was trading at 15.60 which is a 2.25% decline.

So if you held it for the quarter, your net is only about 1% for the quarter which is not so good. Maybe looking at it on a quarterly basis is too short of a term?

[GregWeld]

Greg,

Thanks for taking the time to explain. I understand what you are saying. I guess I am looking at a very short term example in the case of NLY.

My thinking is that quoted yield is say 13% per year which equates to approximately 3.25% per quarter. So my thinking is that assuming the market is stable you should earn about 3.25% per quarter just on the dividend. So Nly was trading about 15.96 on January 2. At the end of the first quarter, after ex-dividend, it was trading at 15.60 which is a 2.25% decline.

So if you held it for the quarter, your net is only about 1% for the quarter which is not so good. Maybe looking at it on a quarterly basis is too short of a term?



WAY TOO SHORT TERM


:cheers:

[96z28ss]

newbie question.
Do you need to be in the stock for the whole quarter period to collect the dividend, they don't pro-rate it correct.

[Flash68]

newbie question.
Do you need to be in the stock for the whole quarter period to collect the dividend, they don't pro-rate it correct.

Greg covered it prior but you just need to own it by the ex-dividend date. And it's all or nothing.

[GregWeld]

Greg covered it prior but you just need to own it by the ex-dividend date. And it's all or nothing.

Correct. You can buy the day before the "ex date" and sell it the day after an you're still going to get the whole dividend.

There are actually websites that publish all that data and traders the trade just based on trying to capture the dividend.

[booah]

Keep all the shares.... and yes -- you're per share value will get readjusted to reflex the split. BUT --- I'd hold both companies.

From there -- if anyone had a crystal ball and could see the future -- we'd all be rich.

:thumbsup:

Thanks Greg, appreciate the input

Denton

[GregWeld]

This is why I like dividend investing so much... I DO NOT own this particular stock -- but will use this as a nice example of getting a RAISE without even asking for one! Here Goldman Sachs has just given its shareholders a nice .44 cent per year gift. That's real money - and if you have several companies doing this you can not only keep up with - but you can beat - inflation. For someone like me that is retired - this would be the equivalent of getting a pay raise! :D

Typically you will also see a share price increase when a company does this as well. A double bonus!



Goldman Sachs (GS) said it would raise its quarterly dividend to 46 cents per share from 35 cents.

[GregWeld]

I should add that the reason I don't own any Goldman Sachs (GS) is because of the paltry 1.18% dividend rate. Not to mention they also have a horrible chart. Remember that I always look for TOTAL RETURN -- and the TR on GS is negative.... for the past 5 years... I just felt the dividend raise was worth pointing out because these kinds of events are important and really help over the long haul.

[GregWeld]

A good article for 'Investing 102' this morning in Seeking Alpha.... I love having the internet in airplanes now! I can get all kinds of reading done!

This article - for me - is one of reinforcement about what happens when the SHARE PRICE rises over time -- and the stock pays a dividend.... and if that dividend rises over time and just stays at 3 or 4% of the CURRENT share price... you actual dividend yield could be far higher based on YOUR COST BASIS.

What a marvelous way to make money! :unibrow:

When I read articles like this -- I don't so much look at the stock it might be discussing..... but rather - look at the principles it might be discussing as they can apply to ANY stock.


http://seekingalpha.com/article/501311-a-26-yield-from-1-of-the-largest-oil-companies-on-earth?source=email_investing_income&ifp=0

[GregWeld]

Another "good" but sadly --- heart wrenching --- article about whether or not people are prepared to retire.

Some very sad statistics here....

Hopefully NO ONE reading Investing 102 will fare so poorly!


http://www.msnbc.msn.com/id/47063385/ns/business-personal_finance/#.T42Sie0_e0s

[GregWeld]

So --- Anyone that has this stock -- BANCO SANTANDER (STD) in their accounts --- should receive a notice on HOW YOU WANT TO RECEIVE YOUR DIVIDEND...

You'll have three choices -- and they're important!

The DEFAULT CHOICE is that you'll be paid in cash -- BUT!!! You'll pay 21% withholding to the SPANISH GOVERNMENT... (which is what I do)

OR

You can choose to receive SHARES with NO withholding.

Those of you not living off your dividends should be choosing to get SHARES rather than cash.

Just my opinion.


:cheers:

[bdahlg68]

A good article for 'Investing 102' this morning in Seeking Alpha.... I love having the internet in airplanes now! I can get all kinds of reading done!

This article - for me - is one of reinforcement about what happens when the SHARE PRICE rises over time -- and the stock pays a dividend.... and if that dividend rises over time and just stays at 3 or 4% of the CURRENT share price... you actual dividend yield could be far higher based on YOUR COST BASIS.

What a marvelous way to make money! :unibrow:

When I read articles like this -- I don't so much look at the stock it might be discussing..... but rather - look at the principles it might be discussing as they can apply to ANY stock.


http://seekingalpha.com/article/501311-a-26-yield-from-1-of-the-largest-oil-companies-on-earth?source=email_investing_income&ifp=0

This took some time to grasp. I got it before the article, but it took some contemplation of what my portfolio might look like in 10-15 years and what my yields might be at that point. Really can add up, and at age 32 I'm hoping it does!

So --- Anyone that has this stock -- BANCO SANTANDER (STD) in their accounts --- should receive a notice on HOW YOU WANT TO RECEIVE YOUR DIVIDEND...

You'll have three choices -- and they're important!

The DEFAULT CHOICE is that you'll be paid in cash -- BUT!!! You'll pay 21% withholding to the SPANISH GOVERNMENT... (which is what I do)

OR

You can choose to receive SHARES with NO withholding.

Those of you not living off your dividends should be choosing to get SHARES rather than cash.

Just my opinion.


:cheers:

Got my form yesterday. Will be taking care of business ASAP and collecting more shares!!! :thumbsup:

[CRCRFT78]

Read a headline stating Warren Buffet reveals he has prostate cancer, what are your thoughts on how this will affect the market? Will a panic ensue for all those investors that follow his every move?

[GregWeld]

Read a headline stating Warren Buffet reveals he has prostate cancer, what are your thoughts on how this will affect the market? Will a panic ensue for all those investors that follow his every move?

Good question Jose...

My take on it would be that anyone that is investing in Berkshire would have to wake up every morning they held the shares and ask themselves... "is this the day the headline reads Buffet died".

When you see what happened to Apple after Steve Jobs passing.... (it's gone straight up)... then you have to question "conventional wisdom" when you'd be certain the stock would tank.

The world seems to be more willing to shake off events like this and keep on truckin'

I think that most investors - the ones that move the markets - which is not individual investors, it's institutional investors - realize that these people aren't running the day to day businesses.... they're figureheads... and there's lots and lots of really good smart people still at the helm.

Although -- there are just as many cases where the CEO has left and the stock has never recovered from it -- GE being one I can think of... when Jack Welch retired. Citigroup being another. And watch out below if you're a JP Morgan owner and Jamie Dimon ever leaves.

[GregWeld]

So here's something we really haven't discussed much -- mostly because of the "102" preference of keeping things simple...
But several people have asked in PM's etc about different stocks/bonds/interest bearing vehicles etc.

So here's a look at a PREFERRED STOCK I own as an example.


Here's a dividend -- not interest (big difference in the tax rate) -- on a PREFERRED stock that I have in U.S. Bank (USB) Note the "+L" after USB. In Schwab, that's it's symbol. Since there are several, or can be, several preferred's issued they tack on an "A" or "L" etc. Preferred's carry a fixed "interest rate" but is paid as a dividend. It's paid as a fixed rate - thus the notation of the rate. Really - preferred's are a hybrid of a bond and a stock. You'd buy these kinds of investments when you're looking for an "above average" dividend - you don't want "interest" - and you're not looking for much growth in capital. The growth in capital is constrained by the rate the preferred pays. They carry a due date like a bond - where the issuer is going to pay "X" for them. They are also "callable" (most of the time) which means that if the rate being paid is too high - the issuer can call them in and "retire" them. So that generally tends to put a cap on the price.

I'm not sure I'd buy these inside an IRA unless you're creeping up on retirement and want some safety and a higher yield.... if you're say -- under 60... I'd stick with capital appreciation and dividend for the total return. But wanted to just show these various ways to earn a dividend. My holdings are NOT in any retirement accounts (I don't need retirement accounts - I'm already retired! :D ) so I like the higher cash flow some of this type of stuff gives me.


04/16/2012 USB+L US BANCORP 7.875% PFD DEP SHS REP 1/1000 PFD D
type: QUALIFIED DIV
$3,483.62

[hifi875]

I was checking my home made mutual fund that i started creating on 2/1/12.
Started with a paltry 4k, not much i know, but as of today its up $625 with a 16.5% return. Not bad to me for not doing anything. I just need more money now.
With thanks to Greg for getting us thinking and DOING something instead of just thinking about it.

[GregWeld]

Fantastic!


Making money on your money -- that's what this thread is all about.


BTW -- NOBODY starts with a large pile.... you have to start somewhere... and just getting started is the best thing you can do!

[GregWeld]

Here's another "thought" about investing....


If you want to see what MAKING A PILE OF MONEY IN "Dividends/Interest" looks like --- IF any of you OWE money on your VISA/MASTERCARD.... just look at what they 'make' every month on what you owe.....

YOU should be making that -- not them!!

:D

BE THE BANK --- Don't owe the bank.

[toy71camaro]

I was checking my home made mutual fund that i started creating on 2/1/12.
Started with a paltry 4k, not much i know, but as of today its up $625 with a 16.5% return. Not bad to me for not doing anything. I just need more money now.
With thanks to Greg for getting us thinking and DOING something instead of just thinking about it.

Wow! nice!! much better picking than what I did when i started early march. lol

[Bow Tie 67]

Wow! nice!! much better picking than what I did when i started early march. lol

I'm down less than 1% total, with some real " go getters " vs some laggards. But the important thing is I believe in the companies I own. Greg was oh so wise when he told us to research and get to know the company. :thumbsup: :hail:

[GregWeld]

I'm down less than 1% total, with some real " go getters " vs some laggards. But the important thing is I believe in the companies I own. Greg was oh so wise when he told us to research and get to know the company. :thumbsup: :hail:



Thanks Matt!


I started investing in the mid seventies.... so there is some "experience" in my bag. Over the years I've done a little bit of everything investment wise... and the biggest thing I've learned is the human psyche plays a key role in investing. Knowing what you own is critical when things aren't going so well. An investor can do his portfolio a lot more damage during bad times than he can make during good times... That happens when we sell LOW. When the weak hands get blown out.

2007/'08 and the recovery since then - is a perfect example. Those that blew out - lost money. Those that held - are back and making money. :thumbsup:

[toy71camaro]

I'm generally hovering between +1% and -1% each day... but, not worried. I know they'll go up over the next 30 years. lol

plus, i'll sit and collect my dividend even while their "not moving" much. :woot:

[GregWeld]

The Schwab portion of my portfolio (the only one I use for info here) is

UP 4.44% Year to Date

UP 4.17% 3 months

UP 12.52% One year


NOTE:
I DO NOT re-invest the dividends or the performance would be higher. I don't re-invest because I'm retired and live off my dividends and interest.

[GregWeld]

Here's another good article on DRIP - Or Dividend Reinvestment...

I particularly love the "disclaimer" at the end...



http://seekingalpha.com/article/506691-philip-morris-and-the-power-of-dividend-growth

[96z28ss]

Yeah, some day in the future I'll be in the green. my timing sucked. I wish I had made some gains before everything started heading down. I'm long term so I won't worry about it, let it ride!

[GregWeld]

Well don't feel bad Bob! Go back and review the 5 year chart of the companies you've bought and ask yourself "when would have been a good time to get in"?

Of course the bottom of the market - in '08 maybe... but then we'd be thinking you're an investing god! :lol:


Okay -- so along that line.....

I've now built (scaling in) a 60,000 share position in Banco Santander (STD).

I'm going to use this for investing 102.

This stock pays a very nice dividend even with the tax issues it has (Spanish withholding of 21%) and I like it as an international 'banking recovery' - just as we're now seeing here with U.S. Banks. I like to be ahead of the curve - because if you can be "early" you can catch a nice 20%+ upside on top of getting the dividend.

Well....... in this case I've been WAY TO EARLY -- and now I'm trying to catch a falling knife. Not a good/smart strategy. BUT -- BIG BUT -- I have enough dough that SOMETIMES I can buy my way out of trouble... by bringing my average cost down WITH the market for the stock. I started this position in FEBRUARY --- 5000 @ $8.54 -- then 5000 more later in the month at a lower cost -- then 5000 more in March @ 7.88 and so on. What I didn't do was to wait LONG ENOUGH between buys - on a stock that was obviously falling (the falling knife) thinking that I wanted a dollar amount in the position - and that the stock is "cheap" and it pays a higher than normal yield..... so I was okay with that.

Well -- the position - and chasing it down ended with 40,000 shares at an average of $7.65

So today -- in order to actually move my average cost down a bit - I bought 20,000 more shares at $6.28

So to have any impact on your per share cost average - you have to buy more and more shares to bring that cost down. And what I'm trying to do is to get my average cost "CLOSER" to where it's trading. That way IF -- BIG IF -- it comes back -- it has to come back LESS than it would if I just stayed put. It can also just make my loss larger. The position is still not where I will take it DOLLAR wise...

I once chased a stock to a position of 93,000 shares. When I finally pulled the plug I ONLY lost $1.00 per share (a narrower loss than I would have had PER SHARE) but the "law of large numbers" still cost me a fortune! So this strategy is not "smart" nor does it always work. I'm just using it as an example of what "averaging down" is. I've made this strategy work more times than not - but you have to have stones of steel and CASH to work with. :cheers:

[Bucketlist2012]

Don't feel bad Bob...

We all have stories of "I should of"..."I could of"...

I could have been one of those investing God's Greg talks about..

Sure I bought property in Late 2008/early 2009, But I KNEW to start adding big to my positions in early 2009...IF I would have ? Triple gains on six figures...

BUT, I just dollar cost averaged more in....Sure that worked out good, But since I thought I had Big balls back then, but I wish I had listened to my research and my little voice...I did , but not as much as I " Should have"..." could have"...

I would have a quarter million more in my Portfolio..But I don't.....So, we all have those regrets...If you don't have any, you haven't been investing long..

We just hope we win more than we lose...:cheers: :lateral:

[toy71camaro]

U a brave man, Greg. heheh

When u mentioned that stock a month or so ago, i've "eyed" it on occasion and noticed it dropping.

[GregWeld]

U a brave man, Greg. heheh

When u mentioned that stock a month or so ago, i've "eyed" it on occasion and noticed it dropping.

Well.... yes... and also STUPID. However.... I also pick up a $9,366 dividend per quarter while waiting...

[toy71camaro]

Well.... yes... and also STUPID. However.... I also pick up a $9,366 dividend per quarter while waiting...


lol true. very true.

[GregWeld]

Seriously -- that's where getting a dividend REALLY REALLY helps - because it keeps pounding money in your pocket... where a pure growth stock does not. If I've learned ANYTHING over the last 30 years -- it's that.

[toy71camaro]

Seriously -- that's where getting a dividend REALLY REALLY helps - because it keeps pounding money in your pocket... where a pure growth stock does not. If I've learned ANYTHING over the last 30 years -- it's that.

yeah.. when i first opened my investment account in roughly 2008, i got $50 free. So i bought $25 of google. (well, 21 after commission).. its worth a whopping like 30 today. sure would of been nice to also get a dividend during those years.

on the other hand, i also bought $21 worth of Apple, which is worth like $100 now. heheh. got lucky on that one. but, not enough to write home about. but it was a "success" story for me. but, ive flopped some too. But that was before i understood what we're doing here now.

[bdahlg68]

Seriously -- that's where getting a dividend REALLY REALLY helps - because it keeps pounding money in your pocket... where a pure growth stock does not. If I've learned ANYTHING over the last 30 years -- it's that.

And for those that reinvest the dividends, it automatically averages down your cost / share. As an example with STD, I own 600 shares at an average cost of $7.50. They pay a dividend on May-09-2012 of $0.2291 / share. At the current price of $6.34, I would get 21.681 shares. My new average cost per share is $7.235. Assuming a similar dividend and price / share next quarter, my cost / share could be under $7 without doing anything. This is where the yield vs. cost basis becomes exponential. Extrapolate this out 5 or 10 years.....

[GregWeld]

And for those that reinvest the dividends, it automatically averages down your cost / share. As an example with STD, I own 600 shares at an average cost of $7.50. They pay a dividend on May-09-2012 of $0.2291 / share. At the current price of $6.34, I would get 21.681 shares. My new average cost per share is $7.235. Assuming a similar dividend and price / share next quarter, my cost / share could be under $7 without doing anything. This is where the yield vs. cost basis becomes exponential. Extrapolate this out 5 or 10 years.....



EXACTLY

[dhutton]

I have 12 stocks spread across several sectors in the Schwab account I opened in January. Now I want to invest some additional money. Some have done considerably better than others. A couple are down a few percent and I have a handful that are well above 10%. Should I invest the additional funds in the better performing stocks, or spread it evenly across the board? I also have a few that have done well in my 401k, would it be a good idea to add them to my Schwab account?

Thanks,
Don

[GregWeld]

I have 12 stocks spread across several sectors in the Schwab account I opened in January. Now I want to invest some additional money. Some have done considerably better than others. A couple are down a few percent and I have a handful that are well above 10%. Should I invest the additional funds in the better performing stocks, or spread it evenly across the board? I also have a few that have done well in my 401k, would it be a good idea to add them to my Schwab account?

Thanks,
Don

I would ALWAYS choose MORE diversification over anything else. It's easy to load up on the current winners.... but they won't always be the winners... a year from now the loser could be your big winner!

I'd like you to look at ALL of your investable funds as one giant account... and don't duplicate - and get the most diversification you can get taking into consideration ALL of your investments.

It's ALL your money! Just because they are in different accounts doesn't really make any difference. That should only be a consideration when you're looking at investments inside the IRA - because you don't need tax advantaged investments in there -- they're already tax advantaged!

[dhutton]

Thanks Greg. I appreciate the time you take to answer these questions. I've learned quite a lot and made a little money thanks to you and this thread.

Don

[GregWeld]

That's making my day right there Don!

Today I've Uninstalled the '32 roadster rear end -- made some money in my stock accounts (a nice up day) and helped somebody while I'm at it! That's a good day!

[bdahlg68]

I have 12 stocks spread across several sectors in the Schwab account I opened in January. Now I want to invest some additional money. Some have done considerably better than others. A couple are down a few percent and I have a handful that are well above 10%. Should I invest the additional funds in the better performing stocks, or spread it evenly across the board? I also have a few that have done well in my 401k, would it be a good idea to add them to my Schwab account?

Thanks,
Don

Another thing to consider is whether or not you will continue to have these chunks of money to invest and how big the chunks are. If you are going to continue to have these chunks of money to put in, pick one or two of the stocks you currently hold or a new one and put your money to work. With the next chunk pick one or two other stocks and just rotate through. If this is a one time chunk, diversification is really the way to go. Make sure you feel like you've got the best of the best. As long as you have the confidence in that like Greg is preaching you'll weather the bumps in the road much better.

As far as sizes of stock purchases, I like to keep the commission below 1% to get in. So if your commission is $7, buy at least $700 worth of stock. The lower you can keep this percentage, the better. Keep this in mind when thinking about the # of positions you may want to add to. In Greg's world, he is looking at 0.01%! :bow:

[GregWeld]

I got a good laugh out of the .01% commission comment -- but it is somewhat true I guess...

Here's the trade on Banco Santander (STD)

20,000 shares = $125,590.86 commission was $8.95 so total was $125,599.81


I think that works out to even less than .01%


:rofl: :woot:

[Bow Tie 67]

I got a good laugh out of the .01% commission comment -- but it is somewhat true I guess...

Here's the trade on Banco Santander (STD)

20,000 shares = $125,590.86 commission was $8.95 so total was $125,599.81


I think that works out to even less than .01%


:rofl: :woot:

Holy crap, $8.95 for any size trade? :wow: :hail:

[GregWeld]

Yes Matt! That's Schwab! Any trade -- $8.95

I don't know what account "size" that starts at -- or if all trades regardless of the account size are that amount. :cheers:

[bdahlg68]

That seems normal. Sometimes it depends on trade volume or account size, sometimes not. For my accounts, Zecco has $4.95 commission and Fidelity has $7.95.

It's just important to keep an eye on commission cost. You really want to try and avoid paying 5% to establish a position. If you're just starting out with a small amount of dough this is important. If you're buying $1000 - $2000 of a stock at each purchase, then don't worry about it....

[GregWeld]

On these "big" (they're actually not so big) down days --- when you start to wonder why you're in the market.... go back and look at the 5 and 10 year charts of your stocks. Traders (a definition) are always talking heads and always have some reason for why the market or a particular stock is doing "X".... INVESTORS look for the underlying value and long term reasons for stock ownership.

If you have some "new money" to put to work -- WAIT until this summer... the market is always down in the summer.... I usually don't start buying again until AUGUST. This is a very short horizon in the scheme of things.

[WSSix]

Cool! I'll have some more money to play with then I do believe. So I'll keep an eye on things until then.

[GregWeld]

I can't find any definitive answer as of today -- but I "THINK" Coke (KO) just voted to split it's shares 2 or 1.....


It was talked about at the annual meeting - but I can't find where it was voted on or not.

[GregWeld]

Coca-Cola (NYSE:KO) wants to do something it hasn’t done in years — offer a stock split.

The company’s board of directors voted to recommend a 2-for-1 split this morning. If approved by shareholders, it would be the 11th stock split in Coke’s near-century as a publicly traded company, and the first in 16 years.


Under the plan, which shareholders will vote on July 10, the number of outstanding shares of the beverage and snack food maker would double from 5.6 billion to 11.2 billion in August — the number of outstanding shares will go from roughly 2.26 billion to 4.52 billion.

KO shares have gained about 7% this year — including a roughly 1% boost Wednesday — and currently trade around $75.

[96z28ss]

Coca-Cola (NYSE:KO) wants to do something it hasn’t done in years — offer a stock split.

The company’s board of directors voted to recommend a 2-for-1 split this morning. If approved by shareholders, it would be the 11th stock split in Coke’s near-century as a publicly traded company, and the first in 16 years.


Under the plan, which shareholders will vote on July 10, the number of outstanding shares of the beverage and snack food maker would double from 5.6 billion to 11.2 billion in August — the number of outstanding shares will go from roughly 2.26 billion to 4.52 billion.

KO shares have gained about 7% this year — including a roughly 1% boost Wednesday — and currently trade around $75.

from that article sounds like they voted to recommend it this morning. In july the shareholder will vote yes or no on splitting.
One thing I'm wondering is since they split the shares, does the dividend also get cut in half also? Only got 82 shares would be nice to have 164 shares.
Got like the compunding dividend.

I read this in another article
"If the latest proposed split is approved, the company noted that a single share purchased in 1919 for $40 would be worth more than 9,000 shares and $341,545. If dividends were reinvested annually, the share would be worth $9.8 million.

[CRCRFT78]

Is there a benefit to buying before a split? My understanding is that if I spent $1000 today vs. after the split, I'm still going to end up with the same amount of shares because the price per share also splits based on the ratio.

[96z28ss]

Is there a benefit to buying before a split? My understanding is that if I spent $1000 today vs. after the split, I'm still going to end up with the same amount of shares because the price per share also splits based on the ratio.

I think what you lose is the bump in price that the split can cause. Usually after the split the price goes up cause its now cheaper and opens it for more investors.

[CRCRFT78]

Is there any mention of an increase in the level of dividends accompanying the split or would that be announced at the time of the split? I'm trying to understand the possible benefits to a split other than more shares. The price will adjust accordingly so you really aren't gaining on that end. A stock dividend will also add more shares but the investment amount stays relatively the same. The one benefit to a stock dividend is that it won't be taxed until you sell unlike cash dividends.

Sorry I'm thinking out loud. Just trying to understand the benefit of a split. Unless the benefit comes in the long term with share prices rising beyond what they were before the split. Then I can see some benefit in which you didn't buy shares but received them via a stock split. I could be completely wrong about everything. Sorry for thinking out loud.

[CRCRFT78]

I think what you lose is the bump in price that the split can cause. Usually after the split the price goes up cause its now cheaper and opens it for more investors.

That would make sense. You won't be able to beat the market trying to jump in after the split so having the shares before hand should also net you the jump in price. I tend to overlook the simple and think about the complicated. Thats if the share prices rise after a split.

Would a date be announced similar to an "ex-dividend date" or "date of record" for a split letting you know when you'd have to own the shares by to split your shares?

[GregWeld]

Jose ---

Usually a spilt is like getting a bump in the dividend -- because generally the stock continues to rise -- but now you have twice as many shares. That's not always true - but generally a company splits it's stock because things are going well. That's really the most crucial underlying point -- you want own good (GREAT!) companies to begin with... and the rest just "happens".

Splits are what made the dot bomb companies go crazy with share price growth -- Microsoft - Dell - Intel - etc all split and had babies like rabbits. Back then it was a lot of explosive growth -- where as Coke (KO) is just good old fashioned organic growth.

So here's the real crux of anything like this - whether you buy before - during or after a split -- what you really want to buy is a great company. Don't play the split 'game' -- if it's a company you want to own - great - if not - then move on and buy something else but don't buy just based on some exogenous event.

[CRCRFT78]

Coke has been on my "buy" list for a while, I'm just wondering if there was a way to benefit from the split. Either way I'll pick it up.

[GregWeld]

Coke has been on my "buy" list for a while, I'm just wondering if there was a way to benefit from the split. Either way I'll pick it up.



I think you'd benefit regardless of the split.... It has a 50 year track record of great growth -- pays a dividend... and blah blah blah... but it's a long term buy and hold - reinvest the dividend kind of stock.

[toy71camaro]

Coke has been on my "buy" list for a while, I'm just wondering if there was a way to benefit from the split. Either way I'll pick it up.

Same here... have had my eye on it for a while now, just saving up the $ to the price point that i want to make purchases at ($1k for me).

Im curious as well, if its worth jumping into before, or like previously mentioned, wait til August before jumping back into the market... either way, long term, it probably wont make a HUGE difference, but could be a subtle difference down the road.

[GregWeld]

Same here... have had my eye on it for a while now, just saving up the $ to the price point that i want to make purchases at ($1k for me).

Im curious as well, if its worth jumping into before, or like previously mentioned, wait til August before jumping back into the market... either way, long term, it probably wont make a HUGE difference, but could be a subtle difference down the road.



LONG TERM it makes about zero difference.... here's what does make a difference --- BEING OUT OF THE MARKET.

It's a proven numerical fact that GAINS in the market are only actually made a few DAYS in any given year -- the rest of the year it moves two forward - one back - three back - two forward.... BUT a couple times a year there are nice big PERCENTAGE moves and if you're out on those days - you've lost the largest percentage for that particular year.

Coke has split 10 times since 1919.... do the math of how many shares you'd have starting with ONE share in 1919... and splitting 2 for 1 ten times - and now once again so 11 times....

1

2

4

8

16

32

64

128

256

512

1024

2048

And this last time


4096


None of us would have lived that long -- but it begins to be the law of large numbers --- do the math had you bought 100 shares back at 256 !

:woot:

[GregWeld]

Okay -- but here's the REAL splits for Coke since 1919.... so my math is TAME compared to the actual numbers!


The Coca-Cola Co. is seeking its first stock split in 16 years. Here's a look at the beverage maker's 10 other stock splits in history, along with the price of the stock before the split.

1919 – Shares begin trading at $40 per share.

1927 – 2-for-1 split – $199.50

1935 – 4-for-1 split – $290

1960 – 3-for-1 split – $153.75

1965 – 2-for-1 split – $146.50

1968 – 2-for-1 split – $155

1977 – 2-for-1 split – $73.75

1986 – 3-for-1 split – $117

1990 – 2-for-1 split – $76.75

1992 – 2-for-1 split – $82.88

1996 – 2-for-1 split – $81.75

2012 – Coke seeks 2-for-1 split. Shares closed at $74.12 Tuesday

[96z28ss]

Okay -- but here's the REAL splits for Coke since 1919.... so my math is TAME compared to the actual numbers!


The Coca-Cola Co. is seeking its first stock split in 16 years. Here's a look at the beverage maker's 10 other stock splits in history, along with the price of the stock before the split.

1919 – Shares begin trading at $40 per share.

1927 – 2-for-1 split – $199.50

1935 – 4-for-1 split – $290

1960 – 3-for-1 split – $153.75

1965 – 2-for-1 split – $146.50

1968 – 2-for-1 split – $155

1977 – 2-for-1 split – $73.75

1986 – 3-for-1 split – $117

1990 – 2-for-1 split – $76.75

1992 – 2-for-1 split – $82.88

1996 – 2-for-1 split – $81.75

2012 – Coke seeks 2-for-1 split. Shares closed at $74.12 Tuesday

"If the latest proposed split is approved, the company noted that a single share purchased in 1919 for $40 would be worth more than 9,000 shares and $341,545. If dividends were reinvested annually, the share would be worth $9.8 million.

Huge difference in the amount it's worth with the reinvested dividend. The power of compounding is amazing.

[GregWeld]

"If the latest proposed split is approved, the company noted that a single share purchased in 1919 for $40 would be worth more than 9,000 shares and $341,545. If dividends were reinvested annually, the share would be worth $9.8 million.

Huge difference in the amount it's worth with the reinvested dividend. The power of compounding is amazing.




And there is the $64 million dollar answer to why you shouldn't be very concerned about when to get in.... JUST DO IT!


:woot:

[GregWeld]

Kinder Morgan Partners (KMP) went EX dividend today -- so when you check the share price - it's DOWN - but it went ex $1.20 per share...

I'll take that $1.20 per share thank you very much! :thumbsup:

[96z28ss]

Kinder Morgan Partners (KMP) went EX dividend today -- so when you check the share price - it's DOWN - but it went ex $1.20 per share...

I'll take that $1.20 per share thank you very much! :thumbsup:

Obviously not a big deal to you but that would mean an extra $86 for me.

Newbie question here. If the dividend is reinvested do I still pay a brokerage fee for buying that 1 stock? so would it be better to save a years worth up then buy more.

[toy71camaro]

Obviously not a big deal to you but that would mean an extra $86 for me.

Newbie question here. If the dividend is reinvested do I still pay a brokerage fee for buying that 1 stock? so would it be better to save a years worth up then buy more.

Not sure on your brokerage, but i know for sure with Sharebuilder i DO NOT pay a fee to reinvest the dividend.

[toy71camaro]

Looks like todays been a good day to me on the market.. I've finally got slightly over a 1% total gain back in my port, and got 2 more shares of NLY thanks to their dividend today. :cheers:

[ErikLS2]

A couple things I noticed about Coke, that $40 initial share price is $547 in today's money. And, look what the company did during the great depression. Maybe it was the cocaine in it that helped.:lol:

Greg, don't forget this is Investing 102, I had to look up exogenous. :rofl:

[GregWeld]

Obviously not a big deal to you but that would mean an extra $86 for me.

Newbie question here. If the dividend is reinvested do I still pay a brokerage fee for buying that 1 stock? so would it be better to save a years worth up then buy more.


Shouldn't be any commissions

Sorry on the road to thunderhill so posting from
My phone

[GregWeld]

Obviously not a big deal to you but that would mean an extra $86 for me.

Newbie question here. If the dividend is reinvested do I still pay a brokerage fee for buying that 1 stock? so would it be better to save a years worth up then buy more.



Remember that $86 is FOUR TIMES PER YEAR....and grows each quarter as you buy more shares with the reinvested dividend. It's like a snowball on a downhill slope... after a while it will take off on it's own!

Oh --- can't not post and poke you in the eye at the same time.... my Annaly (NLY) dividend this quarter was $13,750. I added 10,000 shares to the name (now 35,000 shares) so next quarter it'll be even bigger. :unibrow: :D

[96z28ss]

I have been wondering is a stock split the same as a ex-dividend date.
You have to own the stock before a certain date?

Reason I ask was I have been looking at DGAS and they announced a split.
I was reading this article and it makes it sound like people that owned the stock before April 17th get the split. Is this a differnent type of stock split?

"The Board of Directors of Delta Natural Gas Company, Inc. (NASDAQ: DGAS - News), at its meeting on February 17, 2012, declared a two-for-one stock split of the Corporation’s issued and outstanding common stock for shareholders of record as of April 17, 2012. In its Order dated March 8, 2012, the Kentucky Public Service Commission approved the two-for-one stock split. The additional shares to be issued in the stock split are expected to be distributed, and the stock split completed, on May 1, 2012.

As a result of the two-for-one stock split, for every one share of Delta Natural Gas Company, Inc. common stock owned by a shareholder as of the close of business on April 17, 2012, the shareholder will on May 1, 2012 own two shares of Delta Natural Gas Company, Inc. common stock. Delta Natural Gas Company, Inc. is expected to commence trading on the NASDAQ Global Market on a post-split basis at the opening of the market on May 2, 2012.

The Company currently has 3,407,550 shares of common stock outstanding. After the stock split, the current number of shares of common stock outstanding will increase to 6,815,100 shares.

For additional information and a list of frequently asked questions (FAQs) related to the two-for-one stock split, please refer to Delta Natural Gas Company’s website at www.deltagas.com.

Glenn R. Jennings, Chairman of the Board, President and Chief Executive Officer of Delta Natural Gas Company, Inc., stated, “We would like to thank all shareholders for their continued support and trust in Delta Natural Gas Company, Inc.”

[96z28ss]

I own a small position in CHKR, and its dragging me down. was thinking of dumping it and getting into DGAS

[BC69]

Just an aside - there is NO quantitative historical proof that stock splits actual help or result in a stock boost. As an M&A advisor we had a deck that we showed management teams all the time, 15 pages of information, historical and quant based analysis - the summary was always the same "It won't help or hurt, companies just do it for optics sometimes".

It really should not have any impact on your decision at all. And I know optically you think a cheaper per share cost would mean getting more shares and thus more return, but in reality share count doesnt matter.

[GregWeld]

I own a small position in CHKR, and its dragging me down. was thinking of dumping it and getting into DGAS

I would not do that.... you haven't owned it long enough - and you bought it for the dividend.

[GregWeld]

I have been wondering is a stock split the same as a ex-dividend date.
You have to own the stock before a certain date?








Regardless of when you bought the shares --- they will split. So if you owned them the day before the split - let's say you owned 100 on May 1st -- and May 2nd was the split date - when you check your account on May 2nd you will have more shares at less price per share.... They'll take care of everything for you....

[WSSix]

sweet! I own some Coke. Fun times ahead it seems.

[dhutton]

This article seems to echo what Greg has been saying about dividend investing:

http://seekingalpha.com/article/541771-how-dividend-investors-choose-to-fail?source=marketwatch

Don

[GregWeld]

This article seems to echo what Greg has been saying about dividend investing:

http://seekingalpha.com/article/541771-how-dividend-investors-choose-to-fail?source=marketwatch

Don



EVERYONE NEEDS TO READ THAT ARTICLE.


Thanks Don for posting the link! :lateral: :cheers: :woot:

[RECOVERY ROOM]

Good read, Thanks for posting

[96z28ss]

I own COP with only 80 shares, but today conoco phillips split of a parent company, Phillips 66. If you were a share holder you got half as many shares in the new company.
Phillips 66 is now its own company with its own stock. So I now own 40 shares of that today.

hopefully they continue to grow.

[booah]

Ive been getting company shares since 2006, so I'm watching both COP and PSX with interest. So far they are doing as expected from reading up before hand on Alpha Seek.

[67pro-street]

First of all I would like to give a big thanks to the OP and all who have contributed to this thread. I have spent the past week or so reading through all 140 pages and I have learned more about sound financial planning in this past week than I have in the past 26 years of my life!

So here's my situation. I am 26, been working at an oil refinery for the past 3.5 years and have been contributing to my companies 401k plan since i started. Until now, i thought that as long as i put as much money into my 401k as possible and just "forget" about it, i would be living a 'coush retirement. All my company offers is mutual funds or target date retirement funds and bonds. I have spread my investments throughout my available options and the biggest gainer so far has been my S&P investment, except for last year my bonds did exceptionally well. My company matches up to 7.5% and over the past 3.5 years i have worked my way up to putting 20% of my paycheck into my 401k.

I also bought a house ~2.5 years ago and it has depreciated some, but nothing to make me run for the hills so I feel comfortable that I can ride out the storm and eventually come out ahead. My 401k currently has ~50k in it but now i want to open a Schwab account and start making my money work for me! I have enough saved in my bank account that I would feel comfortable putting ~10k into my Schwab account, but I still want to do some more research into which companies i would like to invest in. When I do so, I plan to take Greg's advice of starting with 2k in 5 different companies.

Now here's my question/dilemma. Since I have the power of time on my hands and since a Schwab account offers me so many more options than my company's 401k, should I "borrow" money (say 15-20k) from my 401k plan and use it to invest into my Schwab account? I would not do this right off the bat as I have so much to learn and I dont want to "learn" with that much money...but say a year or two from now, would that be a good idea? I realize that i have to pay some sort of tax penalty on that money taken out and also have to pay the amount taken out back, with interest. But my reasoning is that it seems like if i could be earning 8-10% or more in a Scwab account with that money i would still come out ahead after paying the fees. Plust i would have time/power of money combo??

I also realize this is a car building site, but after reading this thread i have decided to hold off on the ole' camaro for a year or two and use the money i was going to spend on that for investements. Dont hate me for doing so, but it just seems like the most financially responsible thing for me to do right now?

Thanks again for this great thread, i hope it keeps going for some time to come!

[67pro-street]

Now that i am on the soapbox, there has been some talk of oil companies and conoco phillips splitting and such. However, nobody has really talked about bp. Before the gulf spill, their stock price was ~80 bucks. After the spill, it dropped to the mid 20's and they stopped issuing dividends. As of this year, they announced that they will recontinue their dividend payments and the stock has slowly recovered to ~40. They are also selling two refineries, one them being texas city which has had a bunch of problems in the past. My thinking is that we already know this stock has the potential to reach ~80 bucks and they have continued their dividend payments. They have also started to settle a lot of their court cases, the only big question remaining is what the EPA is going to fine them for? I have my suspicions that this "judgement" is going to be used by the current president or next as some sort of political move and that is why the stock hasnt fully recovered. However, i can see the potential of investing into bp right now and riding out the storm knowing that it has the high likelihood of reaching 80 bucks again, aka 200% gain. Thoughts?Critisism?

[GregWeld]

First of all I would like to give a big thanks to the OP and all who have contributed to this thread. I have spent the past week or so reading through all 140 pages and I have learned more about sound financial planning in this past week than I have in the past 26 years of my life!

So here's my situation. I am 26, been working at an oil refinery for the past 3.5 years and have been contributing to my companies 401k plan since i started. Until now, i thought that as long as i put as much money into my 401k as possible and just "forget" about it, i would be living a 'coush retirement. All my company offers is mutual funds or target date retirement funds and bonds. I have spread my investments throughout my available options and the biggest gainer so far has been my S&P investment, except for last year my bonds did exceptionally well. My company matches up to 7.5% and over the past 3.5 years i have worked my way up to putting 20% of my paycheck into my 401k.

I also bought a house ~2.5 years ago and it has depreciated some, but nothing to make me run for the hills so I feel comfortable that I can ride out the storm and eventually come out ahead. My 401k currently has ~50k in it but now i want to open a Schwab account and start making my money work for me! I have enough saved in my bank account that I would feel comfortable putting ~10k into my Schwab account, but I still want to do some more research into which companies i would like to invest in. When I do so, I plan to take Greg's advice of starting with 2k in 5 different companies.

Now here's my question/dilemma. Since I have the power of time on my hands and since a Schwab account offers me so many more options than my company's 401k, should I "borrow" money (say 15-20k) from my 401k plan and use it to invest into my Schwab account? I would not do this right off the bat as I have so much to learn and I dont want to "learn" with that much money...but say a year or two from now, would that be a good idea? I realize that i have to pay some sort of tax penalty on that money taken out and also have to pay the amount taken out back, with interest. But my reasoning is that it seems like if i could be earning 8-10% or more in a Scwab account with that money i would still come out ahead after paying the fees. Plust i would have time/power of money combo??

I also realize this is a car building site, but after reading this thread i have decided to hold off on the ole' camaro for a year or two and use the money i was going to spend on that for investements. Dont hate me for doing so, but it just seems like the most financially responsible thing for me to do right now?

Thanks again for this great thread, i hope it keeps going for some time to come!



FIRST! Kudos to you young man! You are so far ahead of the pack it's amazing!



SECOND = I wouldn't try to get "cute" with doing investing of any kind... keep it simple - just save money - salt it away in good stocks with dividends being re-invested and sleep well at night. The minute you try to get cute - the market will turn against you -- you'll worry -- and your best "plan" will go to hell in a hand basket. Don't do it. Just keep doing what you're doing.


THIRD -- Look into opening a ROTH account - and save the maximum you can using that funding mechanism. ALL of the growth and income etc comes out of a ROTH TAX FREE at retirement. Dude! You can't beat that! But there are qualifications etc. So check with Schwab on the rules.


FOURTH -- All of us have tried to steer clear of actual recommendations etc... So with regards to your BP question --- you need to go back and compare TOTAL RETURN over time - against other companies that you want to invest in -- spread some diversification in there with a little "risk"... You are YOUNG - you have time.... So if you think BP is the company you want to take on for a little "risk" -- then I say go for it. Just don't "GAMBLE" -- so just play with a small portion of your investable assets in something like that. BP certainly isn't going out of business.... and this is/could be a small blip that is a buying opportunity. Or not. We won't know that for maybe a couple years.

:cheers: :thumbsup:

[67pro-street]

Thanks for the reply Greg. I will try to keep posting and keep current on this thread as much as possible. Its more valuable than gold right now!

DICLAIMER: I have no investments in gold nor plan to invest in gold within the next 72 hours:D

[GregWeld]

DICLAIMER: I have no investments in gold nor plan to invest in gold within the next 72 hours:D



Okay! That's funny as hell!

[bdahlg68]

Greg mentioned the ROTH. If you qualify, consider not taking a 401k loan but reducing your 401k contribution down to the limit the company matches and putting the rest in the ROTH up to the max. Any leftover, tuck away into a normal investment account. As you accumulate $1000 or $2000, buy something....

Just something to consider. You have time on your side and slow and steady can win this race in a big way!

[Rybar]

Greg thanks for the help so far. I am making some moves to be able to begin some investments based on this thread.

I have a bunch of $$$ in Mutual funds that have done me nothing over the last 10 yrs. Time to take a different approach.

Tried catching up on the thread and got through a small chunk of it.

[toy71camaro]

couple new faces chimed in.. Sweet!!

welcome fella's. :lateral: :cheers:

[GregWeld]

couple new faces chimed in.. Sweet!!

welcome fella's. :lateral: :cheers:



Yeah buddy! X'2 -- right there with ya!

:lateral: :cheers:

[toy71camaro]

So question....

With the "sell in may and go away" theory, that seems to be pretty consistent year to year... would now be a bad time to restructure/re-balance a 401k portfolio?

[GregWeld]

A reminder to the newbs of investing....


You get up and the "market" is down 100 points... and your stocks are down 1 or 2% - IT'S DAYS and WEEKS like this that will make you thank yourself for investing in DIVIDEND payers. Because the dividend doesn't go up and down... it keeps paying you every quarter.

Actually -- in all honesty -- it's good that the market is down -- because your dividend will be re-invested at lower share prices - thus buying you more shares!

Think LONG TERM.... 10 / 20 / 30 or more years. Even if you retire at 65 - you're not going to die the next week! You're going to live another 30 years - and those dividends will just keep supporting you.

First thing this month AT&T (T) paid me $6600 bucks.... That's real money - and every 3 months they'll have to write that check - and I'll thank them and cash it. :woot:

[GregWeld]

So question....

With the "sell in may and go away" theory, that seems to be pretty consistent year to year... would now be a bad time to restructure/re-balance a 401k portfolio?

I wouldn't pay ANY attention to any of that kind of stuff. That's "trader talk". You're an INVESTOR. LONG TERM.... so a few percent one way or the other won't affect your total return in the long run.

Having said that - August is a good "bottom". And it depends on your question if your asking if now is a good time to SELL.... vs buy. Typically the market sinks through the summer. So BUYING sometime in the summer usually, on average, works out in the long run.

Remember the longer you wait to "do something" - the less time you have for compounding. Go back and look at the compounding posts -- IT'S NOT THE FIRST DOUBLE --- IT'S the LAST DOUBLE - that counts - and that means you have to be EARLY in order to get to that last double. That is YEARS away - so does a few days or weeks make much of a difference -- YEAH if you're buying dividend payers... because a dollar now -- might be 1000 dollars later.

[toy71camaro]

good point.. your right. a few % over the next couple months (ie. til fall) wont make that big of difference compared to not being in at all.

I need to put my big boy pants on and tackle the 401k. It makes me nervous as hell as there is SOOO many different choices, plus "diversifying" (i guess that makes me the most nervous). what % should go where. :_paranoid

[GregWeld]

good point.. your right. a few % over the next couple months (ie. til fall) wont make that big of difference compared to not being in at all.

I need to put my big boy pants on and tackle the 401k. It makes me nervous as hell as there is SOOO many different choices, plus "diversifying" (i guess that makes me the most nervous). what % should go where. :_paranoid


It should make you MORE nervous to have money sitting not growing or not paying you!

Stick to basic rules for diversifying. If you have 100K - 5% per investment
if you have 10k - then a couple thousand per name. Somewhere in-between if you have more or less.

If you have 100K -- finding JUST TWENTY great companies is the easiest thing you'll ever do!


:cheers:

[toy71camaro]

It should make you MORE nervous to have money sitting not growing or not paying you!

Stick to basic rules for diversifying. If you have 100K - 5% per investment
if you have 10k - then a couple thousand per name. Somewhere in-between if you have more or less.

If you have 100K -- finding JUST TWENTY great companies is the easiest thing you'll ever do!


:cheers:

If i could do individual stocks, i'd be MUCH more comfortable... but these are all mutual funds., which is what makes me nervous about diversifying it.. Ive been on schwab and see they suggest a certain % in large cap, small/mid, euro, etc. but it seems the Funds all overlap.

[GregWeld]

If i could do individual stocks, i'd be MUCH more comfortable... but these are all mutual funds., which is what makes me nervous about diversifying it.. Ive been on schwab and see they suggest a certain % in large cap, small/mid, euro, etc. but it seems the Funds all overlap.



Not only will they overlap -- but they'll suck as far as total returns go. Mutual Funds are the great "average". They're killing Americans appetite for investing.

However....

I'd look at the crappiest performance THIS YEAR -- like EURO funds.... they've gotten killed -- so should have low NAV (net asset value) -- that will give you diversity (International) and you know that europe isn't down and going away - so they could come back a lot over the next 5 years once they get their act together.

Depending on your age -- I'd go for more growth and income over just growth... growth is a gamble -- if you're going to gamble on growth - at least get some income along the way.

I also like big cap in a retirement scenario -- they pay dividends - they're safe - and as we've shown over and over here - they also have mighty big TOTAL RETURNS over time.

The thing about mutual funds -- they're just giant baskets of stocks. So beyond the top 10 holdings -- you've just basically taken you money and put it in a savings account. A placeholder. If the market goes well they do well - but you're just along for the ride.

Nothing inherently wrong with that... it's just not going to allow you to get very much return or get you excited at how smart you are! :D

[Rybar]

Spent a bunch of time reading the thread and researching some companies. Have a list together now of stocks I'm going to buy once I dump my Mutual Funds out the window. Thanks for all the help and suggestions everyone, this is really interesting stuff, to research and learn and hey if you can make some money doing it that's a bonus.

[toy71camaro]

Spent a bunch of time reading the thread and researching some companies. Have a list together now of stocks I'm going to buy once I dump my Mutual Funds out the window. Thanks for all the help and suggestions everyone, this is really interesting stuff, to research and learn and hey if you can make some money doing it that's a bonus.

Awesome! good luck! let us know how they turn out :D

[67pro-street]

okay slow day at work today so i am going to try and set up my Schwab account. I remember seeing a commercial that said to "Call Chuck" when i was in college so i decided to prank call them and demand i speak to Chuck. Needless to say they were not as enthuised as i was about the call, so hopefully im not blackballed! HA!:cheers:

[toy71camaro]

okay slow day at work today so i am going to try and set up my Schwab account. I remember seeing a commercial that said to "Call Chuck" when i was in college so i decided to prank call them and demand i speak to Chuck. Needless to say they were not as enthuised as i was about the call, so hopefully im not blackballed! HA!:cheers:


LMAO I did mine on their website. If you setup the Investor Checking (i think thats what it was called) it came with the Investment brokerage account free. Otherwise you have to drop $1k minimum to open the brokerage account or something like that.

so, you can really get the Schwab tools for free doing it this way too. :)

[GregWeld]

Spent a bunch of time reading the thread and researching some companies. Have a list together now of stocks I'm going to buy once I dump my Mutual Funds out the window. Thanks for all the help and suggestions everyone, this is really interesting stuff, to research and learn and hey if you can make some money doing it that's a bonus.



Yeah -- there's probably a few to many posts -- but it's okay.... unless you're trying to catch up!!

Go get 'em!!

[toy71camaro]

Greg.. do you use "F.A.S.T. Graphs"?

Was reading a bit about them this morning, from an article on SA.

I guess it might be a step above Investing 102 tho. lol.

[GregWeld]

Greg.. do you use "F.A.S.T. Graphs"?

Was reading a bit about them this morning, from an article on SA.

I guess it might be a step above Investing 102 tho. lol.


No I don't. I really don't use anything like that. I read a lot - I pay attention - I watch CNBC - but mostly I only invest in stuff just like I've been preaching here in Investing 102. Other than BONDS which are held in a smallish brokerage where I have a SVP handle that part.... I do my own stuff. But I've been doing this since the late 70's... and I own an apartment complex and some commercial real-estate. I'm really a pretty simple guy with pretty simple investment strategies. It's the experience of having lived thru many different kinds of markets that has taught me to just buy great companies - collect the dividend - kick back and enjoy life. I don't like to make it too complicated. So far - it's served me pretty dang well. :cheers:

[toy71camaro]

Just curious. from what i can tell, its just another "aid" to help decide when to pull the cord on a stock based on its current price vs its average price (ie. is the stock on sale today or overpriced).

Not a bad idea if you've got your eye on multiple stocks and waiting for the funds to purchase them. Like i am. 1k at a time. It might persuade someone a little bit to buy X stock this time around vs Y stock as its historically 10% cheaper than it averages... or something along those lines anyway. lol

[Rybar]

Yeah -- there's probably a few to many posts -- but it's okay.... unless you're trying to catch up!!

Go get 'em!!

Mainly catching up. Thanks for all the help so far the prospect of making some smart moves now that will pay down the road is very intriguing.

[GregWeld]

Just curious. from what i can tell, its just another "aid" to help decide when to pull the cord on a stock based on its current price vs its average price (ie. is the stock on sale today or overpriced).

Not a bad idea if you've got your eye on multiple stocks and waiting for the funds to purchase them. Like i am. 1k at a time. It might persuade someone a little bit to buy X stock this time around vs Y stock as its historically 10% cheaper than it averages... or something along those lines anyway. lol

I agree on the "aid" part. Investing is "whatever" works for you to make you make a decision and helps you find good stuff -- or helps you refer to why you bought what you did. I just don't need much reference to buy stuff like Coke and McDonalds and Phillip Morse and Kimberly Clark... if you get my point.

[GregWeld]

So I get asked all the time if I own Berkshire Hathaway shares... the answer is "HELL NO"... and people are shocked. Obviously they know the name and the famous DEMOCRATIC midwesterner Warren Buffet and they think he's some kind of a god or something and I just think he's an old smart guy that doesn't really understand the stock market. :unibrow: :D

This stock is over a hundred grand per share.... and DOES NOT pay a dividend... and has a whopping 11.6% TEN YEAR growth. REALLY -- 10 YEARS to get 11.6%???

Not in my portfolio! I get 5% per year in dividend off of simple names... and when you do the total return comparo -- there's no way you'd buy this stock. The 10 year TOTAL RETURN is 10.6% ---- WOW!!! And not WOW in a good way!

If Warren wakes up dead (that was meant to be funny).... you're going to be down 10% plus or more -- so would you risk that for a 10 year total return of 10.6%??

[GregWeld]

There annual share holders meeting is in town Sat. Its like the biggest media blitz all week, Lots of people in town all ready. The airport is loaded with lots of private jets

LOL --- DUDE! You have to be able to fly a private jet if you can just afford to buy one or two shares of this pig in a poke! The funny thing is -- it's mostly just a holding company... I mean - really - if you want to buy Coke shares -- buy coke shares why buy Berkshire and THEY collect the dividend! You get nothing!


If you do the math -- take 100 Grand (one share worth) and get a 4.5% dividend reinvested.... that's 4,500 year one - now you have 104,500... and your next year you get 5,000 -- now you got 109,500 and so on... do this for 10 years and you've doubled your money (you'd have 200K) AND you're getting 10K per year in dividend. With BRK.A ---- you'd have your original investment and 11% or using our 100K cost basis - you'd now have 111K.... and NO DIVIDEND.

Sorry -- I just don't get it.

I love him! He's so smart... and he seems to be just a genuinely good guy! I hate his TAX POLICY -- he's clueless that way and if he thinks he should pay more taxes - then he should just write a dang check! :woot:

[XLexusTech]

Greg et all,, anyone have any thoughts on the Facebook IPO?
28 to 35 is the offer... was thinking of jumping in,,

[GregWeld]

If you could get it for 28 to 35 it would be great! My guess is it bids to 80 before a "retail" customer gets any.

I'm not buying any -- but it's only because I just don't need to bother with that kind of an investment. That's not to say others shouldn't.

[mdprovee]

Greg, I need to thank you again. By looking at this thread, it made me think. I made $25 on a dividend, and paid cash for home repair, truck repair, and other odds and ends. Even had a little left over.

Thanks, and the next dinner is on me.

[GregWeld]

Greg, I need to thank you again. By looking at this thread, it made me think. I made $25 on a dividend, and paid cash for home repair, truck repair, and other odds and ends. Even had a little left over.

Thanks, and the next dinner is on me.


So here's the deal ---- we all get into a grove -- and one of those groves is NOT saving any money - and what happens is -- all of a sudden years have slipped by and we still aren't into the saving mode... I can tell you that at nearly 60 years old - how fast time has gone by! OMG! I was just 20 something!

So good to hear you are jumping all over it - because it's that same father time that makes that $25 dividend turn into $100's of dollars. :cheers:

[GregWeld]

Very interesting information for INVESTING 102.... at Berkshire Hathaway annual meeting - Warren Buffet was "cheering stocks DOWN"! Why did he want the DOW to move DOWN?? Because on Friday he put 60 million to work - and planned to put more to work early this week and he wants to "get more for my money".

That must explain why he's one of the worlds richest men! He's BUYING when the market is DOWN. He actually understands the OVER TIME - if he buys when the market sucks - that he will be rewarded long term.

I've been cheerleading this "idea" for this whole thread...

Of course everyone "waits" for the perfect time to "get in". There really isn't any good answer or signal or news that you can say "now is the time because it's not going any lower".... so this is not what I'm trying to say. What I'm pointing out is that when you see a stock you like -- and the market is down -- don't be afraid to pounce! Will it go lower. Yeah! You can bet on it. But if you've been watching a stock and it's moving higher and higher and all of a sudden the market is selling off you need to get a mindset that says "GREAT" I'll buy some! It's on sale!

Be like Warren Buffet!:woot:

[ErikLS2]

Pretty good list I found looking around about dividend stocks:

http://seekingalpha.com/article/463411-top-10-rated-dow-dividend-paying-stocks

[GregWeld]

Pretty good list I found looking around about dividend stocks:

http://seekingalpha.com/article/463411-top-10-rated-dow-dividend-paying-stocks



Good list Erik!

The only problem I have with it is that it's TOO conservative if a guy only owned those big cap big dow names. The yield on them is just not enough - which is why I pitch -- offset some big cap dow stuff like McDonalds and Coke - with a name that pays 6 or 7%.... and has a bit more risk. If you don't do that - you end up with a portfolio paying 3% or less - and that won't keep up with inflation. It'll grow - and it'll be safe - ya just need to be somewhere in the middle... Too safe is where old guys like me reside. :D

[RECOVERY ROOM]

Your not that old yet

[GregWeld]

I used todays weakness in McDonalds to add a 1000 shares to my position.

I also found an interesting dividend/income/growth play (I bought 10,000 shares) in Black Rock Limited Duration (BLW) that pays a monthly dividend of 10 cents... which is currently 7+ %.

Remember I'm retired -- so income generation is my goal. Each of you have to temper your investments to your own goals. However, INCOME - even if you don't need it NOW - can be reinvested. So just because it's income for me, now, doesn't mean it's not a good investment for someone just looking to grow their portfolio.

[strtcar]

Guys, checkout DOMK, it was .67 a few weeks ago, now over $4. They make solarpowered case for ipad, iphone, and fire. Ipad case comes out in less than 1 month. The company has no sales at all but I think it could be a good stock to make some quick money.

I've been following them for few months now, and the last week its been crazy, shooting up to 52week high in the first 15mins of the day then coming back down to "normal". Will be neat to watch it as the product launch gets closer. My guess it will tank after earnings come out, but who knows.

[GregWeld]

Guys, checkout DOMK, it was .67 a few weeks ago, now over $4. They make solarpowered case for ipad, iphone, and fire. Ipad case comes out in less than 1 month. The company has no sales at all but I think it could be a good stock to make some quick money.

I've been following them for few months now, and the last week its been crazy, shooting up to 52week high in the first 15mins of the day then coming back down to "normal". Will be neat to watch it as the product launch gets closer. My guess it will tank after earnings come out, but who knows.



Maybe we should start a "GAMBLING 102" thread... because that's what this is. It's not investing. :lol:

[GregWeld]

The next several weeks will show you why you want to own stuff that PAYS you to own it!

Remember too - all you newbs out there.... that when we say Sell in May and go away... this is a historically week period (summer)... and that actually works in your favor if you're re-investing your dividend or plan to put more money to work. If you re-invest - you'll buy more shares - which pays off later - and if you've got new money - you can put it to work with cheaper prices.

Personally I've always come into this period with a nice cash position waiting to add to my portfolio - and it's almost always worked out beautifully.

The other things you'll see is that people tend to sell their WINNERS -- so stocks that have had a great run (profit) get sold the deepest because it's so easy just to skim some off the top. People tend NOT to sell the losers... they hold them. So you'll see the biggest haircuts in the biggest winners.

Pay no attention to that noise out there... it's trader talk. You guys are INVESTORS! :cheers:

[Rybar]

The next several weeks will show you why you want to own stuff that PAYS you to own it!

Remember too - all you newbs out there.... that when we say Sell in May and go away... this is a historically week period (summer)... and that actually works in your favor if you're re-investing your dividend or plan to put more money to work. If you re-invest - you'll buy more shares - which pays off later - and if you've got new money - you can put it to work with cheaper prices.

Personally I've always come into this period with a nice cash position waiting to add to my portfolio - and it's almost always worked out beautifully.

The other things you'll see is that people tend to sell their WINNERS -- so stocks that have had a great run (profit) get sold the deepest because it's so easy just to skim some off the top. People tend NOT to sell the losers... they hold them. So you'll see the biggest haircuts in the biggest winners.

Pay no attention to that noise out there... it's trader talk. You guys are INVESTORS! :cheers:

Awesome news, as I'm researching as we speak getting ready to buy, buy, buy. :thumbsup:

[Bucketlist2012]

The next several weeks will show you why you want to own stuff that PAYS you to own it!

Remember too - all you newbs out there.... that when we say Sell in May and go away... this is a historically week period (summer)... and that actually works in your favor if you're re-investing your dividend or plan to put more money to work. If you re-invest - you'll buy more shares - which pays off later - and if you've got new money - you can put it to work with cheaper prices.

Personally I've always come into this period with a nice cash position waiting to add to my portfolio - and it's almost always worked out beautifully.

The other things you'll see is that people tend to sell their WINNERS -- so stocks that have had a great run (profit) get sold the deepest because it's so easy just to skim some off the top. People tend NOT to sell the losers... they hold them. So you'll see the biggest haircuts in the biggest winners.

Pay no attention to that noise out there... it's trader talk. You guys are INVESTORS! :cheers:

Amen Mr.Weld..:cheers:

Cash/Dry powder is king right now..

I expected this to happen and no worries here.. I plan to put more cash to work..

There are Traders....And there are Investors.. I too, am an Investor..In for the long term..:cheers:

The slight change in my Balance means nothing ...Seems like every time the crowd panics, I am adding positions...

I think I am physically getting better..I have to much invested to leave now...:lateral: :cheers:

[camcojb]

I think I am physically getting better..I have to much invested to leave now...:lateral: :cheers:

that's great news Mike. :thumbsup:

[GregWeld]

I have to much invested to leave now...:lateral: :cheers:


Now we're talking!!



:cheers: :woot:

[toy71camaro]

I think I am physically getting better..

Thats the most important thing right there.... good news bud.


One the Investing side, next week i'll reach my next purchase point.. sounds like good timing to make that next batch go to work for me. :D :cheers:

[Bucketlist2012]

Thanks guys..

Investing takes a back seat when your health is on the line, but the really COOL thing is I have everything in place, so it is on Auto pilot..

Schwab investments, cash on hand, Trust set up for the wife...So when I get bad, no money worries..

And I am not going out on my back...I will die with my boots on...And yes I have some family that want to get their hands on my money, but unless they are a No kill animal shelter, they may be disappointed..

I told them how to invest, they never listened..Hell they travel more than me, and drive nicer cars...But do they have money ? Heck no...Hocked up to their Eyeballs...And then they complain..

Not the way to roll...Even when I am real sick, I hoard Money/Investments...

Because, what if I make it to 80 plus ? I want to still be comfortable...

[GregWeld]

Funny Mike!

All of my closest friends have 2nd and or 3rd homes! I have ONE! My net worth is at least 3 times what theirs are (we've all compared) and we have the least expenses. Our income is kinda "fixed" (I fix it) -- and our outflow is totally discretionary... their income is fixed (they all still MUST work) and their outflows are mandatory!

Our way is a lot more fun!

[Bucketlist2012]

Funny Mike!

All of my closest friends have 2nd and or 3rd homes! I have ONE! My net worth is at least 3 times what theirs are (we've all compared) and we have the least expenses. Our income is kinda "fixed" (I fix it) -- and our outflow is totally discretionary... their income is fixed (they all still MUST work) and their outflows are mandatory!

Our way is a lot more fun!

Yes Sir...I am a small fish in a big pond, or a Big fish in a small pond...Not a high Roller at all, but I am amazed that i know some people that have 4 times the stuff I have...Total assets...But the column i really watch is the NET worth..

What I own.. If I have to hock myself up to my eyeballs to keep up with the Jones, or the Weld's, haha, I just won't do it..

The cool thing is my wife is on the same page...She has become pretty darn smart money wise...If not, we would have a problem.

So , yes, OUR way is much better, because if the economy turns south, It is not MY economy..

I am my own Mini country...I am CEO of Mikey's world..And that is all that counts..

Sure I want more stuff, who doesn't ? But I ain't gonna do it the wrong way..

Then all my talk of investing would be a lie, and peace of mind would go out the window..

Guys like you just inspire me to get to the next level and not just sit back...I got toys on my wish list...

[sokoloka]

I've been following thing thread fairly closely, first time poster. First off let me say thank you for all the great information and perspective thus far!

My first question is: what proportion of your assets would you recommend investing vs. locking away in savings account? I'm 25 years old, been investing for ~4 years with mixed success, have ~80k in the bank and 55k in the market. Have a work related 401k but haven't really been paying attention to that besides picking the "extremely aggressive" setting 3 years ago.

About 30k of the market money is tied up in some long term DOWN money (namely CitiBank). I have 22ish in cash left in my Etrade after pulling 50k out of the market and putting 25k back in savings.

Currently living in London, most recently from San Diego and would like to return there within 365 days and purchase a house (will eventually need a downpayment).

Need to re-assess what to do with my DOWN Citi, as well as find some better long term plays to put my money into. I like the feeling of having a year of net salary in the bank - but is that the wisest thing to be doing with that chunk of change? I realistically won't be losing my job anytime soon (effectively on contract through October) and have 3+ months of vacation that they'll have to pay me out. What would you guys recommend? I've been reading a lot in here about this dividend investing scheme and I'm quite interested. Seems like a good long term play for me to get into.

Second question: What to do with a 4 year+ 90% loser? I put $700 or so into some oil speculation penny stock and it's currently worth about $40 and hasn't moved in a year. Should I just pay the $9 trade fee and pull clean out that terribly depressing line in my account?

Thanks. Look forward to participating more. Keep this thread alive!

[bdahlg68]

STD dividend reinvested yesterday at a nice low price of $6.1099. Looks like today it's going to open around $6.3x.... gotta love it!

[toy71camaro]

I've been following thing thread fairly closely, first time poster. First off let me say thank you for all the great information and perspective thus far!

My first question is: what proportion of your assets would you recommend investing vs. locking away in savings account? I'm 25 years old, been investing for ~4 years with mixed success, have ~80k in the bank and 55k in the market. Have a work related 401k but haven't really been paying attention to that besides picking the "extremely aggressive" setting 3 years ago.

About 30k of the market money is tied up in some long term DOWN money (namely CitiBank). I have 22ish in cash left in my Etrade after pulling 50k out of the market and putting 25k back in savings.

Currently living in London, most recently from San Diego and would like to return there within 365 days and purchase a house (will eventually need a downpayment).

Need to re-assess what to do with my DOWN Citi, as well as find some better long term plays to put my money into. I like the feeling of having a year of net salary in the bank - but is that the wisest thing to be doing with that chunk of change? I realistically won't be losing my job anytime soon (effectively on contract through October) and have 3+ months of vacation that they'll have to pay me out. What would you guys recommend? I've been reading a lot in here about this dividend investing scheme and I'm quite interested. Seems like a good long term play for me to get into.

Second question: What to do with a 4 year+ 90% loser? I put $700 or so into some oil speculation penny stock and it's currently worth about $40 and hasn't moved in a year. Should I just pay the $9 trade fee and pull clean out that terribly depressing line in my account?

Thanks. Look forward to participating more. Keep this thread alive!

My *personal, non professional* opinion would be:
1. Calculate your monthly bills, whats necessary to survive, and multiply it by 8 for 8 months of an "emergency" fund. put the rest of the money to "work". -- Reason being, IF something were to happen, you got 8 months to "fix it" (find a job, or whatever), and then if you dont, you can start pulling that money out that was working for you.
2. Put the extra money to work:
a. Max out your ROTH IRA each year with Investing 102 stocks (dividend champions that YOU are comfortable with).
b. Put the rest of the money to work in a brokerage account, again with dividend champions. - in case of emergency, you got 8 months backup above to work with, before you have to touch this account.
3. Keep some as an "extra" or normal savings. for those purchases that you dont have cash for in your sock drawer. because we NEVER touch the emergency fund. Not unless you lose your job or some catastrophic event happes. -- that money dont exist.

On a side note, find a bank that gives a decent interest rate. ING Direct has 0.80% interest on all their free accounts. Its not "great" but its still "working for me" while it sits in there.



As for the down stocks, I have a couple in my portfolio that are like that too. Some "bad choices"... I figured, i'd leave them there. They arent worth much of anything at this point, so why spend more money to sell them. and who knows, maybe in 10 years they'll be worth something again. What am i going to gain from selling them at this point? nothing. i've got time on my side (32 yrs old), maybe they'll eventually make a comeback. Im not out any more money to hold them, so its not costing me anything to play the wait and see game.

Just my 2 cents...

by the way, you got a good start for your age!!!!

[GregWeld]

Sokoloka --

Number one -- KUDOS TO YOU MY FRIEND! You're way ahead of the pack!


Just so you know - there is no "right or wrong" guide to investing or how much cash to have on hand etc. It's more your personal comfort level. However.... having said that.... you have WAY too much dead money (savings).

At your age -- you should have maybe 10K in savings for peace of mind - and the rest should be in best of breed high quality stocks. The 80 + 55 - 10 is a nice 125K to invest which should MAKE YOU 6K a year in dividend income.... reinvested - you're going to be very very comfortable in retirement!


I'd hold the Citi.... banks suck right now but that won't be forever. Depending on what you have invested in it ($$ amount) you might see what it takes to average it down. It will pay a "real" dividend eventually as banks return to profitability. Read this thread --- think LONG TERM --- and it can pay handsomely to invest in "normally decent" stuff - when everyone else is running for the hills. Citibank ain't likely to go away. They really just need to get rid of Vicram but that's a different thread! LOL


Now -- on holding a years worth of "income" --- that's just nonsense. You're thinking like a guy that has no assets! When you have assets (liquid) you have options. Keep 10K for emergencies. Invest the rest. If you are unemployed for long term - you only need to sell or cash the dividend checks enough to live on in an emergency situation. You have 100K plus... you could make 5 to 6K a year in dividends alone - with ZERO growth (I figure 4% on average to be extra conservative)... so with minimum growth in capital - you'd have 10K a year (growth plus dividends) before you touched the principle and you still have the 10K emergency cash (so that's 20K for a year) to get you by on top of unemployment etc. You don't' own a house --- so you really just need to get by for awhile.

In your case - given your age - I'd put MINIMUM down payment and hold as much invested as you possibly can. Banks would look favorably on a guy with liquid assets. You're going to make money on your investments NOT on your house. That's a common fallacy. Even in good times nobody really makes any money on their primary residence - because as your house rises in value - so does everyone else's. You're just trading dollars. Investments make money and they double and double again.

Your 125K now - should double every 7 years. Let's look at what that looks like.

125K
250K
500K
1 MM
2 MM
4 MM

So in 35 years - 4 Million -- let's say you suck as an investor and only make 7% total return per year.... you're still going to be a couple million. At 2 million paying 5% dividend - you have 100K income.

If your house quadrupled during the 30 years you make payments on it -- back out the payments and interest - then factor in "you must live somewhere therefore you have a cost".... and the house doesn't pay you.

I'm not saying you shouldn't own a house... I'm just saying I wouldn't be robbing your savings which in the long run will make you far more money on your money.

:lateral: :cheers:

[GregWeld]

Sokoloka --


Get busy and put that money to WORK!


Just to add ======= here's what those dividends start to look like. This is what I've gotten just this month so far -- and is just a snap shot of ONE account .

05/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,462.88
05/09/2012 STDBANCO SANTANDER SA ADR FSPONSORED ADR
type: FOREIGN TAX PAID
-$1,819.81
05/09/2012 STD BANCO SANTANDER SA ADR FSPONSORED ADR
type: QUALIFIED DIV
$8,665.78
05/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,307.32
05/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,119.42
05/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00

[Bucketlist2012]

Sokolka...

Nice job at such a young age...:thumbsup: :thumbsup:

I agree with having the emergency fund and putting the rest to work..

It took me a while to convince the Wife to not tie too much money into the house... She understands now..

As Greg said, the house will stay flat in value , while you double your money over time.

For some, paying off more on the house "feels" better, but good luck trying to get the money out if you should need it...Banks suck..

I prefer to have my money at work, 24/7, and my House loan rate low...

Then I control my money.. I have people with paid off houses because they were afraid of the market... Now they cannot access their money and they live on a tight budget...

Of Course , never an annuity, EVER...But I think you know that..

Well done...At your age I was just getting started, and I still ended up retiring at 52...Due to health reasons, but i still was able to do it...

YOU....Oh my, you will retire when ever you want at this rate..:hail: :hail:

[Woody]

I have to disagree somewhat with the advice on real estate, especially if you are talking about San Diego. Real estate will not stay flat over the long term in San Diego. I live in San Diego and can give you a real life example on one of the houses that I purchased. In 1994 I bought a house with a $30,000 down payment. Sold in 2006. My annual compounded return equates to 29% per year. That would be very hard to beat in the stock market, unless you happened to have put all of your money in Apple. When I bought in 1994, the market sucked and no one wanted to own real estate, just like today. The market stayed flat for a few years, but took off in the late 1990's. I would say now is a very good time to invest in real estate in San Diego, especially with mortgage rates at historical lows.

You might argue that my timing was perfect and I sold at the peak of the bubble. That is probably true, but while the value of the house is lower today, I still would have made a 15+% annual return if I had held and sold today.

Sure you have to make mortgage payments and pay taxes on the home, but don’t forget those are tax deductable and part of the payments are going towards paying down the mortgage.

I don’t disagree that investing in dividend stocks is a great idea, but personally, I would make my first investment in real estate assuming you are planning to locate in San Diego and remain there for the long term.

[pw2006]

Greg's post reminded me to look at my account today and I started cracking up...

Here's interest from the cash sitting in one of my accounts (lazy workers)...

04/27/2012
SCHWAB1 INT 03/29-04/26
type: INTEREST
$6.52

Here's the dividend from about the same amount of money parked in a fairly conservative investment (more productive workers)...
05/07/2012
LQD ISHARES IBOXX INVESTOP IBOXX $ INVESTOP CORP
type: ORD INC DIV REINV.
$1,014.80

The point is, it is better to have your money working (even in something boring like LQD), versus lazing under a shade tree collecting dust. After puking in my mouth a little, I put some of those lazy dogs back to work today.

[Rybar]

I have to disagree somewhat with the advice on real estate, especially if you are talking about San Diego. Real estate will not stay flat over the long term in San Diego. I live in San Diego and can give you a real life example on one of the houses that I purchased. In 1994 I bought a house with a $30,000 down payment. Sold in 2006. My annual compounded return equates to 29% per year. That would be very hard to beat in the stock market, unless you happened to have put all of your money in Apple. When I bought in 1994, the market sucked and no one wanted to own real estate, just like today. The market stayed flat for a few years, but took off in the late 1990's. I would say now is a very good time to invest in real estate in San Diego, especially with mortgage rates at historical lows.

You might argue that my timing was perfect and I sold at the peak of the bubble. That is probably true, but while the value of the house is lower today, I still would have made a 15+% annual return if I had held and sold today.

Sure you have to make mortgage payments and pay taxes on the home, but don’t forget those are tax deductable and part of the payments are going towards paying down the mortgage.

I don’t disagree that investing in dividend stocks is a great idea, but personally, I would make my first investment in real estate assuming you are planning to locate in San Diego and remain there for the long term.

Good point, Vancouver, BC, Canada is very similar.

I know of alot of Italian construction companies that are local that are building and developing in San Diego. That is really good news for you.

Up here there's a huge influx of cash and investors from Asia buying real estate and prices just keep going up and up to the point where crack shack homes in certain parts of town are $1 million or more. I have more than doubled my money on my home if I sell. But I think GW is preaching the slow and steady investing approach here. Real Estate investing is timing and holding as well.

[GregWeld]

My point about real estate vs investing is that your primary residence is NOT an investment. It's overhead/cost... and it's a time proven fact that the stock market outpaces ANY other investment including real estate.

If you want to invest in real estate as an INVESTMENT -- that is an entirely different discussion. I own commercial and residential investment properties. But they are INVESTMENTS not my primary residence.

My point to the original question was to invest the most he can since he's young - and put as little down as possible in his primary residence. Since everyone has costs of living somewhere - just make it that. And make some money in the invested assets.

[GregWeld]

Greg's post reminded me to look at my account today and I started cracking up...

Here's interest from the cash sitting in one of my accounts (lazy workers)...

04/27/2012
SCHWAB1 INT 03/29-04/26
type: INTEREST
$6.52

Here's the dividend from about the same amount of money parked in a fairly conservative investment (more productive workers)...
05/07/2012
LQD ISHARES IBOXX INVESTOP IBOXX $ INVESTOP CORP
type: ORD INC DIV REINV.
$1,014.80

The point is, it is better to have your money working (even in something boring like LQD), versus lazing under a shade tree collecting dust. After puking in my mouth a little, I put some of those lazy dogs back to work today.



SUCH A GOOD EYE OPENER!!

I love it!!


:lateral: :cheers: :woot:

[GregWeld]

FACEYBOOK


Okay -- I've had about a zillion emails / PM's / Calls asking if "I should - could - would" buy into the FACEBOOK IPO. So here's my take on it - it's GAMBLING - it's HYPE - but it also appears to be BIG....

SO because of my "accounts" -- I've been "allowed" to get into the IPO at offering price ($28 to $35) one of my brokerages. I have asked for 2000 shares. Remember that this is 'over subscribed' so I might not get any - I might get 100 I might get 10.... I'll get what I get and pay the "set" price at OPEN.

I would NOT buy RETAIL -- in other words --- the first trades AFTER the IPO set price! That could be 60 - 70 - 80 - 100 who knows -- but since I can get in at the set price - I stand a chance of having a gain.

I'm sharing this - as I do my other "investment life" as a "here's how all this crap works investing 102 experience". So as usual -- this is a "it takes money to make money" moment. I wouldn't be allowed into the IPO if I didn't already have a substantial account! The guy that needs it the least - gets the most... I don't happen to like that morally but it is what it is.

This is expected to price TOMORROW --- so you can all live vicariously and see if I sink or swim. I don't like Facebook - I don't use it - but EVERYBODY but me does... I think it's a fad but I'm not against making money - regardless of what I think.

[toy71camaro]

Nice!

the question is, do you hold or do you sell for a quick 2x-3x profit if it goes that route... That'd be the hard decision for me to make. LOL.

i agree with the "fad" comment. its the "best thing" out right now, but it only takes one good competitor to come up with the "next best thing" to knock it off its block.

on a side note, i use it for personal use (keeping up with friends/family) AND for my freelance photo business (www.facebook.com/albertd.photography). It makes a GREAT small business advertising tool!!

[Rybar]

Greg what's going on!!! :lol: Hope you make a bundle buddy. :thumbsup:

Can you buy some for me at 28-35 I'll gladly take them off your hands. :D

[GregWeld]

Nice!

the question is, do you hold or do you sell for a quick 2x-3x profit if it goes that route... That'd be the hard decision for me to make. LOL.

i agree with the "fad" comment. its the "best thing" out right now, but it only takes one good competitor to come up with the "next best thing" to knock it off its block.

on a side note, i use it for personal use (keeping up with friends/family) AND for my freelance photo business (www.facebook.com/albertd.photography). It makes a GREAT small business advertising tool!!



Great question Albert -- and regardless of what you do - you'll always second guess it and do it WRONG. Sell and it'll go to $1000 hold and it goes nowhere and you wish you'd have flipped it when you had a double... ME? I'll do it the conservative way -- if it goes gangbusters I'll sell some and hold the house's money.... It's the old pigs get fat and hogs get slaughtered. Of course that depends if I get any at all...

[GregWeld]

Greg what's going on!!! :lol: Hope you make a bundle buddy. :thumbsup:

Can you buy some for me at 28-35 I'll gladly take them off your hands. :D



I'd do that if it was legal tax wise.... but it's the old "fair market" rule that kicks in.

Like I said -- if I get it for the IPO set price -- great - otherwise I wouldn't bother.

:cheers:

[Flash68]

Did your brokerage ask you about holding it for awhile? I ask because my buddy got offered to buy some as well but they asked him (not required) to hold it for a bit (I think 90 days?) before selling. Very casual and nothing on paper. I found that kinda strange.

[Vegas69]

FACEYBOOK


Okay -- I've had about a zillion emails / PM's / Calls asking if "I should - could - would" buy into the FACEBOOK IPO. So here's my take on it - it's GAMBLING - it's HYPE - but it also appears to be BIG....

SO because of my "accounts" -- I've been "allowed" to get into the IPO at offering price ($28 to $35) one of my brokerages. I have asked for 2000 shares. Remember that this is 'over subscribed' so I might not get any - I might get 100 I might get 10.... I'll get what I get and pay the "set" price at OPEN.

I would NOT buy RETAIL -- in other words --- the first trades AFTER the IPO set price! That could be 60 - 70 - 80 - 100 who knows -- but since I can get in at the set price - I stand a chance of having a gain.

I'm sharing this - as I do my other "investment life" as a "here's how all this crap works investing 102 experience". So as usual -- this is a "it takes money to make money" moment. I wouldn't be allowed into the IPO if I didn't already have a substantial account! The guy that needs it the least - gets the most... I don't happen to like that morally but it is what it is.

This is expected to price TOMORROW --- so you can all live vicariously and see if I sink or swim. I don't like Facebook - I don't use it - but EVERYBODY but me does... I think it's a fad but I'm not against making money - regardless of what I think.

Seems like a strange investment for a website you've never experienced. What's your alias? John Doe Jack Smack Rodney Snodgrass??

[sokoloka]

Thank you for all the positive replies! Nice to have a feel good every once in awhile.

Sokoloka --

Number one -- KUDOS TO YOU MY FRIEND! You're way ahead of the pack!


Just so you know - there is no "right or wrong" guide to investing or how much cash to have on hand etc. It's more your personal comfort level. However.... having said that.... you have WAY too much dead money (savings).

At your age -- you should have maybe 10K in savings for peace of mind - and the rest should be in best of breed high quality stocks. The 80 + 55 - 10 is a nice 125K to invest which should MAKE YOU 6K a year in dividend income.... reinvested - you're going to be very very comfortable in retirement!


It seems like I inherited a little of the immigrant mentality from my parents and have this innate desire to own my own home outright as soon as possible. I agree that I have too much dead money sitting around currently, and realistically I'm at least 9 months out from purchasing anything.

I adjusted my position in Citi two days ago, and low and behold the little man in the market got me AGAIN. Seems like the dump JP Morgan just took for $2B smashed all the banks down too. Should have waited one more day to adjust!! Interestingly enough, the girl who I'm seeing over here in London is a risk analyst for their hedge arm. Apparently the investment arm in question has no risk division themselves haha. Surprise!

When it comes to dividend investing, is there a "historically" BETTER time to get in? I.e. a month prior to the anticipated dividend date, after earnings, after the most recent dividend etc? Or just jump in, ride the wave and hope that the market appreciates the base stock while pumping out dividends on a quarterly basis?

I have a few more money moves to make but my goal is to diversify into the GW school of investing by mid-June and see where it takes me from there. Took two sizable (for me) gambles on open market shares yesterday both in my own company and my parent's company. Both are clost to 52 week lows - hope there's some appreciable correction in the near future.

I've always been a pretty good saver while never really denying myself anything that I REALLY want. Sometimes I chuckle to think how much more investment "capital" I'd have if I didn't start this damn corvette! But where would the fun in that be? :thumbsup:


E

[GregWeld]

Seems like a strange investment for a website you've never experienced. What's your alias? John Doe Jack Smack Rodney Snodgrass??

"Tittykaka"

:D
I don't think I'd refer to it as an "investment".... I'd call it gambling. Which is why if it pops - I'll dump some. And I highly doubt I'll get the 2000 shares requested - but if I did - that would be 70 grand... My thinking is I might get 100.

BTW right there is the lesson for "102" -- while 70K seems like a lot -- it's money that % wise for me would be like finding a nickel in the street... so if I lost it - I wouldn't notice. Most everyone that's asked me about FaceyKissyBook really can't afford to gamble like that and shouldn't be invested in it yet they're the ones that will have to pay retail - are the most eager to jump into it - and are the least sophisticated investors. AKA: The ones that should not be buying it - but will anyway.

[GregWeld]

Did your brokerage ask you about holding it for awhile? I ask because my buddy got offered to buy some as well but they asked him (not required) to hold it for a bit (I think 90 days?) before selling. Very casual and nothing on paper. I found that kinda strange.



No they didn't ask anything like that Dave. But it doesn't surprise me. If his brokerage is one of the "underwriters" - they wan to see the stock pop - and STAY up... and or go higher.

The stock market is just a market --- so if there are more BUYERS than SELLERS -- the stock goes higher.... Thus "it pays" to ask people to refrain from selling right away. It makes more headlines - and makes the underwriters look "successful" in their underwriting efforts. Remember that they're salesman and they make big fees doing underwriting.... so they want to show others thinking about going IPO that they're the ones to do business with. :cheers:

[GregWeld]

Thank you for all the positive replies! Nice to have a feel good every once in awhile.



It seems like I inherited a little of the immigrant mentality from my parents and have this innate desire to own my own home outright as soon as possible. I agree that I have too much dead money sitting around currently, and realistically I'm at least 9 months out from purchasing anything.

I adjusted my position in Citi two days ago, and low and behold the little man in the market got me AGAIN. Seems like the dump JP Morgan just took for $2B smashed all the banks down too. Should have waited one more day to adjust!! Interestingly enough, the girl who I'm seeing over here in London is a risk analyst for their hedge arm. Apparently the investment arm in question has no risk division themselves haha. Surprise!

When it comes to dividend investing, is there a "historically" BETTER time to get in? I.e. a month prior to the anticipated dividend date, after earnings, after the most recent dividend etc? Or just jump in, ride the wave and hope that the market appreciates the base stock while pumping out dividends on a quarterly basis?

I have a few more money moves to make but my goal is to diversify into the GW school of investing by mid-June and see where it takes me from there. Took two sizable (for me) gambles on open market shares yesterday both in my own company and my parent's company. Both are clost to 52 week lows - hope there's some appreciable correction in the near future.

I've always been a pretty good saver while never really denying myself anything that I REALLY want. Sometimes I chuckle to think how much more investment "capital" I'd have if I didn't start this damn corvette! But where would the fun in that be? :thumbsup:


E


Life should be part investing -- and part fun too... it's not all about just investing. But you are a CLASSIC example of how it should be done -- i.e., SAVING EARLY IN LIFE. That's what this thread is trying to get people to understand - is that TIME factor and how much it affects your ability to gain.


So the "jump in" question ------ There's no right answer --- and market "timing" never seems to work (remember the little man!).... and there's many theories written about when to buy a dividend stock. To which I smear at and say -- if it's a great company - pays a good dividend - is a best of breed name - then just buy the damn thing and if you looked at those total returns and 5 and 10 year charts... does it really make any difference in your performance if you'd saved 50 cents or a dollar on the buy? I think not.

I have a good stake in Annaly Capital Management (NLY) because of it's outsized dividend - and frankly - because it doesn't really move much - it goes 25 or 30 cents one way or the other. BUT -- at one point a month or so I showed a "loss" in the name of 20 grand or so... And you look at that when everything else (pretty much) is green and say WTF! But then I pull up my Excel spreadsheet and see that NLY pays me 19,950 PER QUARTER (35,000 shares @ .57 quarterly dividend).... so the 20K underwater goes away with the next quarterly dividend payment. Does that share price (at any given moment) really mean much right now.... HELL NO! And if it was down 40K? NO! Because I'm even in 6 months -- and if you were reinvesting that dividend you'd be buying in at lower prices.

So - that's a long answer - but if you are INVESTING -- not trying to trade.. then I wouldn't spend any time trying to game the market. The investments are so much bigger than that over time.

[GregWeld]

BTW -- Using Annaly (NLY) is just using it for an example. I'm not saying anyone should be in the name - in fact - it's most likely an INAPPROPRIATE investment for most - and especially for people that are NOT watching the market - and or interest rates etc. It is not a buy and hold investment. It is highly interest rate sensitive and will get hammered (perhaps) if we get interest rates moving to the upside.

I am NEVER trying to recommend stocks/investments. I'm only trying to get people to see actual results by using some of my own personal investments.


:cheers:

[XLexusTech]

If I read this correct... 1000 shares of this (10K VALUE) WOULD PAY 1109.00 Dividend per Month?



Open 10.76

EPS (Trailing 12 mo.)
1.672

Dividend Yield 11.16%
Monthly Dividend 0.1015
Ex-Dividend Date 5/29/12
Dividend Payable Date 6/22/12

[bdahlg68]

No, it would pay $101.50 per month. 11.16% is annual yield.

If I read this correct... 1000 shares of this (10K VALUE) WOULD PAY 1109.00 Dividend per Month?



Open 10.76

EPS (Trailing 12 mo.)
1.672

Dividend Yield 11.16%
Monthly Dividend 0.1015
Ex-Dividend Date 5/29/12
Dividend Payable Date 6/22/12

[96z28ss]

Life should be part investing -- and part fun too... it's not all about just investing. But you are a CLASSIC example of how it should be done -- i.e., SAVING EARLY IN LIFE. That's what this thread is trying to get people to understand - is that TIME factor and how much it affects your ability to gain.


So the "jump in" question ------ There's no right answer --- and market "timing" never seems to work (remember the little man!).... and there's many theories written about when to buy a dividend stock. To which I smear at and say -- if it's a great company - pays a good dividend - is a best of breed name - then just buy the damn thing and if you looked at those total returns and 5 and 10 year charts... does it really make any difference in your performance if you'd saved 50 cents or a dollar on the buy? I think not.

I have a good stake in Annaly Capital Management (NLY) because of it's outsized dividend - and frankly - because it doesn't really move much - it goes 25 or 30 cents one way or the other. BUT -- at one point a month or so I showed a "loss" in the name of 20 grand or so... And you look at that when everything else (pretty much) is green and say WTF! But then I pull up my Excel spreadsheet and see that NLY pays me 19,950 PER QUARTER (35,000 shares @ .57 quarterly dividend).... so the 20K underwater goes away with the next quarterly dividend payment. Does that share price (at any given moment) really mean much right now.... HELL NO! And if it was down 40K? NO! Because I'm even in 6 months -- and if you were reinvesting that dividend you'd be buying in at lower prices.

So - that's a long answer - but if you are INVESTING -- not trying to trade.. then I wouldn't spend any time trying to game the market. The investments are so much bigger than that over time.

I have a small position in nly. I must of bought it when you were down cause its been green the whole time i owned it. About a month now. LOL

[GregWeld]

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/584561-how-to-become-a-mcdonald-s-millionaire?source=email_investing_income&ifp=0

[Sieg]

IPO's from 10+ years ago still hanging on as a reminder of what not to do:

-----------------------------------Mkt------Cost------Net Gain

MAXYGEN INC 100 @ $5.61 $561.00 $791.25 -$230.25

MICRON TECHN...200 @ $6.36 $1,272.00 $2,869.00 -$1,597.00

PERICOM SEMI... 200 @ $7.89 $1,578.00 $3,550.00 -$1,972.00

Do I wish I would have bought shares of McDonalds now? :yes:

All the dividend stocks I've bought since this thread inspired me closed comfortably in the green Friday. :unibrow:

[96z28ss]

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/584561-how-to-become-a-mcdonald-s-millionaire?source=email_investing_income&ifp=0

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

[GregWeld]

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

EXACTLY -- because if you go back and look at the chart -- it's low on the left and climbs steadily to the right... and there's no reason to believe that it's somehow - after you bought it - going to start a long term decline. In the meantime - they send you money every quarter as a reward. WTF is not to like about that?


I'm down 60 GRAND in Banco Santander.... what do I do? Buy more... increase my dividend "reward" and kick back. I have 20+ "green ones" that more than cover the 2 or 3 in the red ones... and every one of them sends me checks. :cheers: :woot:

[MoparCar]

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes

[GregWeld]

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes



Good questions --- simple answer. NO.

I own nothing that I want to be arbitrarily sold out of. I'm not afraid of the ups and downs of the market... Remember -- they pay me to sit on my hands. So I don't have to wring them trying to figure out the markets next move. AND --- if you've owned your stocks over time -- other than a wild market aberration like '08... (which if you sold into - you lost your ass)... and if you held into - you made all your money back plus some -- and if you reinvested the dividends - it was the greatest gift EVER....

That's the difference between investor - and trader - and buying for pure growth over growth with INCOME.

[MoparCar]

Thanks-I had assumed that was your take but wondered. I need to train myself to look way out in time and forget the noise as you've mentioned. The media tries its best to magnify every up and down in the market.

Investing......

Wes

[GregWeld]

Thanks-I had assumed that was your take but wondered. I need to train myself to look way out in time and forget the noise as you've mentioned. The media tries its best to magnify every up and down in the market.

Investing......

Wes



Investing isn't gambling.... Yeah - market goes up - market goes down.... but if you look at those long term charts... then you learn to ignore the noise because that's all just a distraction.

Look at it like you bought a large class A apartment complex... it's paying you good cash flow... You don't trade that just because the market is off this year, it's still paying you to own it.

This is why I say "buy best of breed" stuff that you don't have to follow the market value every day - or even every month. While I look - listen and learn - and keep my eye on the ball --- It's more just to occupy my time than looking to see that I'm down $2.00 on a $100.00 stock "today". The day after I sell at $98 -- it'll jump to $101. In the meantime - it's paying me $5.00 a year just to own it. After 10 years I've taken $50 out of the stock -- and after 10 years it's most likely worth $175....

People that want to get rich quick are always in the poorhouse.

[GregWeld]

In checking some names this morning - that I own.... I noticed only a couple were trading in the green... One of which is Kimberly Clark (KMB). With all the excitement around Facebook etc which is "fun".... and KMB has to rank right up there in the super boring range. BUT -- Always a big BUT -- Year to date Kimberly Clark is UP 8.16% --- AND it pays 3.72% dividend!

That is how - over time - you get ahead.

Not recommending the name -- I am just using it as another example of this theory of getting paid to watch and wait - and getting growth etc out of great, best of breed names, and sleeping well at night too. Boring? Yeah - pretty much... but FUN too when you're making money on your money. :cheers:

[toy71camaro]

In checking some names this morning - that I own.... I noticed only a couple were trading in the green... One of which is Kimberly Clark (KMB). With all the excitement around Facebook etc which is "fun".... and KMB has to rank right up there in the super boring range. BUT -- Always a big BUT -- Year to date Kimberly Clark is UP 8.16% --- AND it pays 3.72% dividend!

That is how - over time - you get ahead.

Not recommending the name -- I am just using it as another example of this theory of getting paid to watch and wait - and getting growth etc out of great, best of breed names, and sleeping well at night too. Boring? Yeah - pretty much... but FUN too when you're making money on your money. :cheers:

I was starting to research last night.. for my next two purchases.. and KMB is one i have my eye closely on. :thumbsup:

[Bucketlist2012]

Morning Guys.

The Noise is going to get LOUDER and Scary...

Short term, which I am not a short term Investor, will be Bearish and Volatile..

These are the Times I go off and do other things..My health won't let me go crazy yet, but I am not worrying, and I am not taking any big risks right now..

Also I am not following things closely , because it is not worth it..If you have set a course, and you are looking down the road, I think it will all work itself out.

Plenty of stuff to keep me busy, and I am waiting on the opportunity to pick up more stocks, not sell.. I know people have been buying lately, and that is fine, but I am waiting because i think I will get a better deal.

Too many of my friends never listen to me and sell low,in a panic mode..

I am never a seller, unless I want to..The noise and the crazy market do not dictate when i sell..I do..

So plan your course, and keep the Bow into the wind...

That is why having Dead Presidents, Cash , is so important...It makes you not have to sell low, and it makes you have the funds to buy more when the time is right..

Otherwise cash is only for food and daily needs and Butt wipe..:lateral: :cheers:

[toy71camaro]

Otherwise cash is only for food and daily needs and Butt wipe..:lateral: :cheers:

Hey Mike! hope your feelin better...

I'm sittin waitin for whatever I "feel" as the bottom for when to decide to toss in my hat on another 2 purchases. :D

And, your right.. cant live without butt wipe... (another KMB reference) hahah

[Bucketlist2012]

Hey Mike! hope your feelin better...

I'm sittin waitin for whatever I "feel" as the bottom for when to decide to toss in my hat on another 2 purchases. :D

And, your right.. cant live without butt wipe... (another KMB reference) hahah

Well the joke is, the bad news is I am not feeling so good...But the good news, is that I have enough for the rest of my Life if I don't last many years....:wow:

Actually I have "planned " the portfolio to last me 30 plus years at the comfort level I am now, But I don't think I am going to make it.. If I do, then I am covered...If not, someone else,My Wife, is rich...:willy: :willy:

More good news is that if i don't feel better in the next few years, an AMG is going to be purchased...CPO of course, I couldn't take the hit of a new car , even if i can afford it...It would kill me,hahaha:thumbsup: :thumbsup:

I try to keep a good attitude and crack jokes about it...Whining is so not in my personality...I have always been a joker and a motivator..

[GregWeld]

Gotta love them dividends!! Sell in May and go away??? No Way... not when they pay!!

HAHAHAHAHA --- I'm quite the rhymer!


I'm NOT trying to show you "my" income here.... what I'm trying to do is to entice you - urge you - spur you on.... and also prove to you, by showing you that these dividends keep on coming - down market / up market / market noise / eurozone bank troubles.... WHO CARES.... this is real money that either buys (reinvested) more shares paying you even more dividend which buys more shares ---- Or you live off them like Mike and I do. Just depends on where you are in life. :thumbsup: :woot:



05/15/2012 (NNN) NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$2,695.00
05/15/2012 (KMP) KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$7,200.00
05/15/2012 (EEP) ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,325.00

[GregWeld]

Gotta love them dividends!! Sell in May and go away??? No Way... not when they pay!!

HAHAHAHAHA --- I'm quite the rhymer!


I'm NOT trying to show you "my" income here.... what I'm trying to do is to entice you - urge you - spur you on.... and also prove to you, by showing you that these dividends keep on coming - down market / up market / market noise / eurozone bank troubles.... WHO CARES.... this is real money that either buys (reinvested) more shares paying you even more dividend which buys more shares ---- Or you live off them like Mike and I do. Just depends on where you are in life. :thumbsup: :woot:



05/15/2012 (NNN) NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$2,695.00
05/15/2012 (KMP) KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$7,200.00
05/15/2012 (EEP) ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,325.00



FORGOT TO REMIND YOU THAT DIVIDENDS COME FOUR -- COUNT 'EM -- FOUR TIMES PER YEAR!

[GregWeld]

Okay -- ONE more post because it's relevant given todays dividend post etc.... and more importantly -- the "downer" market we've been having (typical by the way in May).

Please go to Google Finance -- link pasted here -- and look at this chart. This is simply an EXAMPLE being used - since it just paid me a nice dividend....

What I want you to do is to click the "ALL" time frame (top of the chart) to expand (zoom) the time frame out... NOTE the SPLITS (2 for 1 --- TWICE!) and the line from left to right....

Now -- Note the DOWN blips in the chart... and ask yourself where you'd be had you BOUGHT then. Now note the HUGE dip where the world was coming to an end -- the sky was falling ('08).... and please note that had you bought THEN you'd have DOUBLED your money since....

I AM NOT recommending this stock! I'm using this chart because it's so typical and I'm trying to get you to understand that all the "noise" is just that.

http://www.google.com/finance?q=NYSE:KMP

[Payton King]

You are a poet and don't know it, but your feet show it...they are Longfellows

Back to our regular program.

[Bucketlist2012]

Greg...

You are too funny..:thumbsup:

The sell in May and go away is crazy too...I don't sell anything unless I want to..And I am not selling...

It is more like Buy more ..At cheaper prices....Soon I will.

Getting in and getting out is NOT part of Investing or this Thread..

Again I have friends that try to time everything..The same people sold in 2008 and "waited" to get back in...Even funnier, the same people tried "penny stocks"...Some are still waiting....:willy: :willy: :wow:

Sure May and a few months after are historically down months..But Buying and selling and buying and selling is just madness..

I know things may get rough, but it is never a smooth ride...And as you say, the Dividends keep coming in...Not like yours, but they still keep coming in..:thumbsup: :cheers: :lateral:

[toy71camaro]

Ok... long overdue.. but i *think* i got my 401k figured out...

According to Schwab's calculator.. i should do 50% large cap stocks, 20% small/mid, 25% international, and 5% cash (<--WTF does cash mean? lol)

Anywho.... I found what seem to be the two best large caps, FCNTX (0.05% div, but has some larger long term cap growth payouts, 9/22/5/8 on the 1/3/5/10 yr returns. Growth of 10k over 10yr = 22k) and RWMFX (pays 2.55% div, 8/21/2 on the yearly returns (growth on 10k/10yr = 16k). Both holding a bunch of dividend champs.

Not sure if i should dump all 50% in one or the other, or split that 50/50...

Unfortunately, same question for the international group.. found 2 that I'm not sure to go with: RIRFX and FWIFX. Both full of div champs...

almost there.. just need to pinpoint the final touches...

And then, whats this 5% cash investments group? lol

If any of ya want to PM me to offer some advice, please feel free. I'll take any i can get. lol

[GregWeld]

I own the Fidelity Contra Fund (FCNTX) and over the years it's done very decently...

The American Fund (RWMFX) looks decent and has good names in the bag...

I would NEVER put too many eggs in one basket -- so if you're going to go -- at least split the investment between these two. They don't overlap much so that's good!

Personally -- I think you'd do better over time with just one International fund - Take a real good look at the overlap of these three (you picked 4) funds... and you'll see some crossover of the investments. Another reason I don't like MF's but you're stuck with what you're stuck with.

So I'd pick THREE of these MF's and split your investment into thirds and go with it.

There is ABSOLUTELY NO REASON TO HOLD CASH of any kind in a 401K.... that's such a dumb recommendation! You can't withdraw without major penalties and taxes due so why hold cash? It's not a friggin' bank account! Put 100% of those workers to work!!!

[GregWeld]

Just to "relate" the Facebook IPO (initial public offering) in this thread... My brokerage called yesterday to remind me that I must "reaffirm" my COTP (conditional offer to purchase) shares in the IPO. It will "price" after the market close TODAY. Then I must finish the paperwork (on line) that I understand the price AND still want to buy.

Okay --- I'm not a Facebook user. Never been to the site. NO I'm not excited by it. I am not above profiting from it however.

Let's put this COTP in perspective. IF I got the 2000 shares I asked for -- it's less than 1% (in dollar amount) of what is just in that one brokerage. I think it's GAMBLING..... but I want to put the perspective of what I'm willing to risk. LESS THAN 1% which overall is about .25% - That's POINT TWO FIVE PERCENT not a quarter of a percent - and not a quarter of what I have to invest.

I've had so many inquiries about how all this works and whether or not "they" should invest etc. THAT HERE IS WHY I'M POSTING THIS....

The number of people that have filled out COTP and have been DENIED is over 70%! According to my broker. The reason for denial??? They are NOT QUALIFIED... Either by "experience" or by percentage of net worth... or various other reasons. The brokerage reviews these COTP's and they will and do refuse to sell to people that are not qualified.

My guess is -- that the people that get turned down for the IPO price -- will turn right around and pay double on the retail market.... making this an even dumber "investment" for them. :willy: :faint:

[strtcar]

Let's put this COTP in perspective. IF I got the 2000 shares I asked for -- it's less than 1% (in dollar amount) of what is just in that one brokerage. I think it's GAMBLING..... but I want to put the perspective of what I'm willing to risk. LESS THAN 1% which overall is about .25% - That's POINT TWO FIVE PERCENT not a quarter of a percent - and not a quarter of what I have to invest.

Just doing some math since you pointed this out. If the IPO goes for ~$40 x 2000 shares is 80k, and .25% of your entire acct we are talking $32million.....:hail: :hail:

[GregWeld]

Just doing some math since you pointed this out. If the IPO goes for ~$40 x 2000 shares is 80k, and .25% of your entire acct we are talking $32million.....:hail: :hail:



You're light.....

[strtcar]

You're light.....

ha ha nice.....:thumbsup:

[Bucketlist2012]

You're light.....

Ah che wah wah...

Ah carumba..

Holy moly...

yee haa..

:thumbsup: :hail:

[GregWeld]

BTW - I don't use these numbers to let you know what my net worth is....
I use them (and pull them out of my arse) to make examples. The thread isn't about me... It's about YOU!

[96z28ss]

Another newbie question about being diversified.

Lets say you have $50k to invest. Are you diversified enough with 3 stocks, 5 or 10?
At what point are you spread out to thin?

If you own stocks that pay a dividend, when they pay out, your dividend is only enough that reinvesting it get you only 1 share, or 4 shares a year.
Are you diversified too much. And holding more shares would compound quicker.

[toy71camaro]

Another newbie question about being diversified.

Lets say you have $50k to invest. Are you diversified enough with 3 stocks, 5 or 10?
At what point are you spread out to thin?

If you own stocks that pay a dividend, when they pay out, your dividend is only enough that reinvesting it get you only 1 share, or 4 shares a year.
Are you diversified too much. And holding more shares would compound quicker.

I'll venture out, and offer my opinion on this...

I would say it depends on what stocks you've picked.. if you pick 5 stocks all in the "Tech" sector, your not diversified at all.

If you pick the "best of breeds" in 3, or 5, or 10 different sectors, NOW your diversified.

It was mentioned before, that it wouldnt be wise to invest more than 5% of your total investment money into a single stock. With that guideline, If *I* had 50k to work with, i'd probably choose between 7-10 Dividend Champs across multiple sectors, and feel "comfortable" about being diversified.

As for the "not enough to buy one share a year".. who cares. Its a % game 2.5% divided on 1 share gets you the same 2.5% dividend on 0.1 share, or 1,000 shares. You dont gain any extra for more shares at a time.. Thus id rather spread my 50k across a few sectors as previously mentioned, even if it means i only buy 1 share a year of that stock.

Just my 2c anyhow.

[strtcar]

I thought this was interesting and fitting since we were talking about the FB IPO.

http://news.yahoo.com/saverin-dumps-us-citizenship-ahead-facebook-ipo-065601372--finance.html;_ylt=A2KJ3CXPIbVPPTAAP7XQtDMD

[CRCRFT78]

I'm curious if any of you own the same stock in different accounts (IRA, ROTH, INVESTMENT ACCOUNT)? I have what I consider a good selection of stocks in my IRA but would like some of the same stocks in a regular investment account as well. My thinking is that the IRA is on a "set it & forget it" long term mode (I won't really forget it of course), but I would also like a regular investment account so that I can be active. Not in the form of day trading, more in the sense that I can move things around and possibly enjoy the investments sooner if need be.

[toy71camaro]

I'm curious if any of you own the same stock in different accounts (IRA, ROTH, INVESTMENT ACCOUNT)? I have what I consider a good selection of stocks in my IRA but would like some of the same stocks in a regular investment account as well. My thinking is that the IRA is on a "set it & forget it" long term mode (I won't really forget it of course), but I would also like a regular investment account so that I can be active. Not in the form of day trading, more in the sense that I can move things around and possibly enjoy the investments sooner if need be.

I dont personally. As i dont have the funds, nor does my 401k allow individual stocks.

BUT, if they did, then i probably would! If they are "great" stocks, then why not? Your limited in your ROTH contributions, so once you have that maxed out, put up the extra in the Investment Account. Buy the same "Great" stocks, or mix it up a bit. (Like, my roth account wont let me buy MLP stocks, so no KMP for my ROTH). So i could only get in one or the other. But as long as your diversified, i dont see no harm in it.

[GregWeld]

I'll venture out, and offer my opinion on this...

I would say it depends on what stocks you've picked.. if you pick 5 stocks all in the "Tech" sector, your not diversified at all.

If you pick the "best of breeds" in 3, or 5, or 10 different sectors, NOW your diversified.

It was mentioned before, that it wouldnt be wise to invest more than 5% of your total investment money into a single stock. With that guideline, If *I* had 50k to work with, i'd probably choose between 7-10 Dividend Champs across multiple sectors, and feel "comfortable" about being diversified.

As for the "not enough to buy one share a year".. who cares. Its a % game 2.5% divided on 1 share gets you the same 2.5% dividend on 0.1 share, or 1,000 shares. You dont gain any extra for more shares at a time.. Thus id rather spread my 50k across a few sectors as previously mentioned, even if it means i only buy 1 share a year of that stock.

Just my 2c anyhow.



MAN YOU GUYS ARE LEARNING!! I'M SO PROUD OF YOU!!


YES --- What he said!

:cheers:

[GregWeld]

I'm curious if any of you own the same stock in different accounts (IRA, ROTH, INVESTMENT ACCOUNT)? I have what I consider a good selection of stocks in my IRA but would like some of the same stocks in a regular investment account as well. My thinking is that the IRA is on a "set it & forget it" long term mode (I won't really forget it of course), but I would also like a regular investment account so that I can be active. Not in the form of day trading, more in the sense that I can move things around and possibly enjoy the investments sooner if need be.



I would NOT do that.... the key to being diversified has little to do with what account what is in... it has more to do with TOTAL INVESTABLE FUNDS -- and then keeping each investment (per name) to 5% or less....


Don't ever get complacent with a set and forget.... it's more like set - REVIEW - ADJUST - and keep them employees WORKING at all times.

:cheers:

[CRCRFT78]

What I meant by set it & forget it is that my choices are for the long term. I don't plan on changing them often by buying and selling. I'm constantly reviewing and checking the status.

The investment account would be more for making some money for "luxury" expenses (play money, car money) not "neccessitiies". However, I would approach it with the same seriousness as the other accounts. I would approach it with the same long term mindset.

[GregWeld]

Good!


Remember that MANY people read these things and may never comment etc... and they may never go back and read 8 ZILLION pages to get to this point...

So what I was doing was to say -- don't set it and forget!

Many people on here have an entire LOST DECADE of set and forget 401K's and they're just now realizing what a huge cost that has come with!

:thumbsup:

[96z28ss]

Good!

Many people on here have an entire LOST DECADE of set and forget 401K's and they're just now realizing what a huge cost that has come with!

:thumbsup:

yep! I never looked at it. 1996 til 2012. Thanks to original poster, Greg and all other seasoned investors for opening my eyes. Im still new to this and learning.