So just to add some info -- 5 year % of share price growth:


PM -- 57.31%

MO -- 33.59%

LO -- 55.07%

RAI -- 31.32%

So really -- the dividends are all good -- and the share price growth is good and steady - I always like to ADD steady into the portfolio! Steady offsets the big down days - and while you might not hit any home runs on stocks like these -- steady is good!

someone needs to point Obama to this thread. It might help......:faint:

Amen.. I would of , should of, and could of ... LONG ago.. I drank the Louis X111 on credit like a big man.. I lost everything in 1990.. My fault. But I did wake up, .. a lot of wasted years, but I made up for it in the last 12 years big time.. Still a novice, but the compounding of money management , and some key moves, and 2008/2009, helped greatly.

My Wife and I will never have to be in that situation.. And I know that a lifetime's wealth can be lost in a few years...My Parents ended up spending everything... bad decisions, multiple moves, losses.. So what I have aquired must be protected and invested for long term income..

My wife and I cherish the calm, peace of Mind, and Security that it brings...More than the Toys and things...

Again, I am the Novice, but I am learning quickly as I can..

And it is not only Business, but it is Fun...In my meeting with a High powered Attorney today, he asked how the portfolio was going, and when i told him, he said, " in this economy ? are you sure it isn't bernie madoff ? I laughed and said it was with schwab, and he had looked over the papers a few years ago. So it is a custodian and legit..

I feel for my family, but I can only guide them, and not let them bleed me..:cheers:

Thank god you recovered and learned from it!

I've been poor -- poor sucks!

The other day I was having b'fast with my son and his girlfriend... she has the $700 Louis ViNell purse... I told her she could have bought one on the street when we were in NYC in September - and put $650 into the bank... Would have looked exactly the same.

I don't get it. The "pride" is in "things". Those purses are for people that are ALREADY RICH... and even then I don't get it. I have stuff -- lots of killer stuff... but I can afford it... and that doesn't mean "I can make this months payment". So all I said to her was -- sweetheart -- you're 24 years old - if you put the $650 in the market - you could buy LOTS of those purses LATER... :faint:

$650 in 7 years - $1300 - 7 years later $2600 - 7 more years $5200 - 7 stinky years later $10,400 and in just 7 more years when you've long forgotten the beat up looking purse -- it's $21,800 and you're only 59

Now you're a classy ol' babe with the dough to carry off the nice purse... and all that from just the savings off ONE STINKY PURCHASE. :rofl:

I will just say that I agree, and I won't even get started...

It is all over my town..Purses, cars, wheels....most on credit, and the stuff purchased from before, was pulled out of their equity. Nicer cars than ME...Most with no net worth, while I am , the almost millionaire next door... I will have money for all my tomorrows...First priority and checked off my List.

More stuff will come later...paid for of course.. No rush...I am a young 52. So I have made my future a full time job...

Thanks..yes, it is only up from here.. The money management for me is really important, and the calculating of NET worth yearly to see what I really have.. Just a nice feeling..

I have some skills with investments, but I am still a novice..I do good , but know that there is more to learn, so in turn, more to gain..

If you tune out the noise, and the media, and the Volatility, and listen to those that are doing it right, great things will come..

The ups and downs have been madness, but sticking with the plan worked out in the end..

I do play the Political Climate in my choices... Example would be the Printing and Spending. Due to that , I do own 15% in PM's, like CEF, Silver Wheaton, GTU, TDLDX...

I am not a Gold Bug, and i do not recommend it to the faint of heart, or anyone else..just my INSURANCE...So far it has worked as planned..

Although I was in the Solar Business 10 years, all my energy assets are Distribution, Transmission, Royalty trusts in Texas, and Prudoe Bay.., Kinder Morgan, Sea Drill.

That's just me..

Only green energy I want is the Dead Presidents...

You seem to be doing great....

I think what we need to do is to give everyone everything -- and then at say 50 -- take it all away.... for like a year and a half.... just wipe them out... and then ask them "if you could do it all over again - what would you do differently?" If they answer correctly - we give half of it back - if not.... oh well... :rofl: :rofl:

I don't have the guts to gamble on gold and silver....

I agree on the energy plays -- I can't know enough - or learn enough - or see in a crystal ball to know what is going to be "it" 10 years from now... wind - solar - fracking - lasers.... So I stay out of that stuff -- it's my own advice - buy what you know and can understand. It's over my head.

When I hear others discussing this and that - I listen - I like to learn - I like to know and to keep up - but I'm not parking my money where they do... because I'll get killed when I didn't see the shoe drop coming. I always remind myself -- You're just average Joe - stick to what you know like (insert a name here).... I'll watch from the sidelines - I'll write from Monaco.... :D

For sure the PM's and the Energy are not something I recommend, even though I use them in my Plan.. Most of them that I own, are dividend paying, but they are harder than normal to work with. I followed the Big banks lead on some of this. Again, I cannot tell people to buy them because it is something that must be watched and there are many other places to make money.

On energy, I think it is the Land Trusts, and the distribution like Kinder Morgan.. The speculation on oil is the killer..HFTrading..

I plan on putting more money to work and the stuff you are doing and researching, is what I am learning next. To me ,this is the Best Job I have ever had...My Future.

Thanks.You have inspired many car nutts on this site, and I watch for a while before chiming in.. I will be listening and watching and taking notes..



:cheers:

For sure the PM's and the Energy are not something I recommend, even though I use them in my Plan.. Most of them that I own, are dividend paying, but they are harder than normal to work with. I followed the Big banks lead on some of this. Again, I cannot tell people to buy them because it is something that must be watched and there are many other places to make money.

:cheers:

Some numbers... 2005 to 2011

CEF Gold fund 284 % up

SPDR Gold 275% up

Google 258% up

Mc Donald's 208% up

SPDR S and P 3% up, big deal....

So your point of staying out of Metals is a sound call. 208 % and 258% with less Volatility makes sense... I own three of the five, and the 3% one is not one of them, haha:cheers:

But for sure, cash is not king right now... Only for daily and monthly expenses, emergency cash, and for buying more investments... and car parts..

Let me see if I've got an understanding of this investing 102:
1. Look into companies I know and use, companies with a history and a good understanding of their business.
2. A nice paying dividend is good, but a higher yield % is better?
3. Positive growth (share price & dividend)
4. Positive total return

Is there something I'm missing? Because I'm open to sharing what I have going on in order to better understand "Investing 102" I will share my most recent moves. Here is what I started with:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Harley (HOG)
Nike (NKE)

Mutual Funds
Fidelity Freedom Fund 2045 (FFFGX)
Spartan Total Market Index Investor Class (FSTMX)
Vanguard Total International Stock Index Fund (VGTSX)

Here is what I now have:

Stocks
Apple (AAPL)
Caterpillar (CAT)
Disney (DIS)
Nike (NKE)
Pepsi (PEP)
Altria Group, Inc. (MO)
Consolidated Edison, Inc. (ED)

Mutual Funds
Spartan Total Market Investor Class (FSTMX)

I sold Harley because I wasn't happy with its performance. It sort of just stayed where it was at and I replaced it with Pepsi, Altria Group & Consolidated Edison. I also dumped the Fidelity Freedom Fund because I just couldn't wrap my head around the idea that I had to pay Fidelity to invest money back with Fidelity. And last, I dumped the Vangaurd Total International Stock Index Fund because of its lackluster performance.

Doing this also gave me the opportunity to put my newly acquired information to the test. I will say I'm happy with the performance so far and know that this is a marathon, not a sprint so I look forward to the future and its possibilities.

I have no intresest in getting the best thread on this forum turning political and getting locked down. Just a knee jerk post to spending our way out of a recession. :willy: I wil quietly go to the corner now........

GIVE THIS MAN 5 GOLD STARS!


The moves were made for the CORRECT reasons... "you weren't happy with them or you couldn't really get your head around it" --- THAT IS ALL you need... When the "market" goes against you - you can look at what you own and be happy with it... because it WILL go against you.... and that's when you need the knowledge and those warm fuzzy feelings.

Thank you -- I was having the very same thoughts!! NO politics! This is LAT G - well.... and a little investing.... but that's only so we can all get rich and buy more car stuff!!! RIGHT??

This thread is too important... No politics...Investing 102, and maybe some money management.. No politics or attitudes..

we need this thread:lateral: :woot:

xxxx2222!!! but then I look over at the tube and "MITT" has won New Hampshire.......:offtopic: ........Whoops I'm sorry ...I'm off to the corner too..(p.s I love this thread!!)...:D ..jim

I just deleted my rant....

Politicians deliver this kind of math:

http://www.usdebtclock.org/

The exact opposite of this thread's primary objective :thumbsup:

^^^^^^^^^^^ That is one scary clock!!!

Kool though!

So here's a good question --- and probably needs addressing....


"What if someone only has $1,000 to invest?"


First -- make CERTAIN this isn't money you're going to need -- and isn't the money you're really saving for vacation... It needs to really be "investing" money.

With $1,000 you can't be worried about being "diversified"... what you really need is relative safety with a solid "return" - so that you feel good about ADDING when you have more to invest. So if it was my kids money -- I'd buy Altria (MO) or similar stock. I'd try to find a great stock where the price is less than $50 a share - so you can actually get some shares -- and I'd want it to be a STEADY EDDY -- and I'd want an above average dividend... so you could see some results. Let's be real --- $1,000 - even at 6% -- you're only going to get about $60 a year in dividends -- but if that's buying 2 more shares per year -- it starts to gain a little steam about 5 years into it.

IF I ONLY HAD $5,000 to invest -- I'd buy TWO steady eddies - per above -- but buy $2,500 each.

IF I ONLY HAD $10,000 to invest -- I'd buy FIVE -- steady eddies per above and make sure they were in 5 different sectors.... and out of the 5 -- I might buy ONE riskier stock -- such as an Annaly Capital Management (NLY) just to TRY to boost the overall account. So I'd look for great companies -- keeping the share price at the $50 or less price -- and I'd want to get that bigger dividend.

The reason I'd stretch for the dividend is to gain a little traction "early on"...

So just a SAMPLE for an EXAMPLE:

65 shares of MO @ $28.91 - div is 5.67% -- Tobacco

65 shares of T @ $29.76 - div is 5.91% -- Teleco

120 shares of NLY @ $16.28 - div is 14% -- risky mortgages

75 shares of NNN @ $26.83 - div is 5.74% -- retail property - shopping ctrs

60 shares of EEP @ $32.93 - div is 6.47% -- pipelines

So the average dividend percentage is 7.558% -- so you can see what the ONE high yielder (NLY @ 14%) can do to an otherwise pretty average dividend. Which is why I tossed it in there. Put this all inside the IRA/401K and you're going to get those dividends and share growth compounding TAX DEFERRED -- so for years you'll have no taxes to pay - which allows your compounding to work at warp speed.

Consumer staple, who makes the toilet paper? :unibrow:

Greg - Great 1/5/10K investing models. :thumbsup:

As opposed to what? I love your advice, just curious if you could expand on that statement a little. I don't understand the tax very well and how they come into play.

I am in a position to throw around $10K into investments right now, looking to move on this very soon.

This thread in #1...the first thing I check everyday when I log in.:hail: :cheers:

Kimberly Clark (KMB) -- a very good steady eddy consumer staples stock!

Proctor and Gamble (PG) - another good steady eddy consumer staple...

These are in the same group as Johnson and Johnson (JNJ) and bring "stability" to a stock portfolio while paying "decent" dividends. I own JNJ and used to also own KMB... but realized I had too many "steady eddy's".

Greg,

I had a question about T.

It looks like the stock price has decreased about 20% to 25% in the last ten years. I see it has a dividend rate of 6%. So my question is: I thought we were looking for stocks with good charts and a good dividend rate? The chart is not good over the last ten years. Is that offset by the 6% dividend rate? I realize a 6% rate over ten years is approximately 60% (not compounded). So the total return would be somewhere close to 35%to 40% over 10 years, which is about 3.5% to 4.0% per year.

Maybe this is what you would consider a "steady eddy" that is a conservative pick due to its high dividend return?" I am just trying to understand the reasoning on selecting T as compared to some other stocks with better charts.

Thanks

Well -- very good question!

A lot of folks have their "main" savings vehicle as a IRA/401K -- and most just salt money out of every paycheck into these -- and then promptly ignore that actual investments inside them. So I'm urging people to at the very least take a look at these accounts and do some "accounting" of where they're at... so that's why I mention them often.

Now to the question. IRA/401 accounts are retirement accounts that are "untouchable" until age 59ish (I don't want to go into all the rules)... and at retirement age - you're able to start to take "withdrawals" known as distributions - from them. When you take the distributions - it's at that time that it becomes "taxable". The THEORY IS - that you should be at a lower income tax bracket when you're retired - and that - since you were allowed to avoid paying taxes for what can be years and years - your investments should have grown more because you got to work with 100% of your dividends and interest....

If you are QUALIFIED (income wise etc) you can put AFTER TAX money into a ROTH IRA.... and ALL of the growth and income from a ROTH IRA comes out at retirement (distributions) TAX FREE.... That's a hell of a deal. If someone was lucky enough to have bought Apple shares in their ROTH back in 1995 or so -- all that zillions of growth is going to come out absolutely tax free. Dude - that's what makes America great! :lol:

Otherwise -- you're "savings" and investable money is just in normal accounts -- and any dividends - short term capital gains - long term capital gains etc has to be accounted for each year on your income tax forms.

For someone with 10K to invest - that's not going to be a big income tax "swinger" -- because if you invested tomorrow and got all dividends -- you're paying that on your 2012 tax - and dividends are taxed at a max rate of 15% - so if you got 1000 in dividends (a 10% rate) you'd owe a whopping $150 (MAYBE -- because theres all manor of the usual tax code rules etc).

So ---- Since I can only use "me" as a real life example -- Let's take my personal situation just for "investing 102":

I already am retired. I have INCOME from apartment and other real estate investments - these are taxed at ordinary income tax rates and I'm in the Max tax bracket on them -- then I have a giant batch of DIVIDENDS and no matter what - they're taxed at the max tax rate of 15% -- Then because I don't want to add tax to my already max tax bracket taxable income -- I have a giant TAX FREE BOND portfolio -- and that gives me considerable income NET NET - no taxes and nothing added to my dividend tax bill or income tax bill.

All of these "strategies" need to be discussed and planned for using your professional advisors - CPA's and or Trust department advisors etc. They're complicated and there's lots of math and lots of "what if's" etc. But for our Investing 102 we're trying to stay with "normal" investing and normal IRA/401 accounts... and it's more about what to look for and what to think about over - Do this - don't do that. This is more about stuff to think about and ask questions about. Things we don't get up in the morning and say "oh yeah - I should look into that".

By the way -- PLEASE make absolutely certain that you don't need the 10K -- It's always better to have some CASH even if it doesn't make any money! So if you have 10K to invest -- start by just investing 4 or 5K -- and then kick back - learn - watch - listen to the market... and then after 3 or 4 months buy another 2K... and so on. Get comfortable. See if when the market goes DOWN that you can stomach those moves without freaking out. You might be amazed at your reaction... I've learned - and that's the right word - to be a buyer during DOWN days... but I didn't used to be! It's taken YEARS to learn that. So walk... get started.... get comfortable. Don't be the Tasmanian Devil (as Charley calls me when I get behind the wheel of the Mustang)... You have to learn to breathe - enter the turns slowly - and exit hard... etc. It takes some time.

Great question --- and you answered it. It's a steady eddy... where I can take a large position and get the outsized dividend WITH some safety. It's not a stock that goes up and down like a yoyo... It's ACTUAL total return for ONE year is 9.4% --- THREE year is 27.9% --- and FIVE year is 16.1%

Steady - payer - growth that is better than any savings or CD rate - and I can sleep well holding it. It brings stability to the portfolio. There are always "balances" that need to be maintained. I own (using my personal information for examples) a huge position in Annaly Capital Management (NLY) I balance this RISKY high dividend payer with stock like JNJ and T and KO.

I'm a posting whore this morning ----

So I was checking the facts on the WOODY question and went to Schwab to use their info - and while there - checked the history on my account... and HERE'S WHY I LOVE DIVIDEND PAYERS..... This is real cash - deposit into my account.


Would this make your day or what? Not bragging here -- I'm URGING YOU to get to where this kind of stuff comes YOUR way!


01/10/2012
PM PHILIP MORRIS INTL INC
type: QUALIFIED DIV
$3,465.00

01/10/2012
MO ALTRIA GROUP INC
type: QUALIFIED DIV
$4,100.00

Thanks for the additional info Greg! I'm pretty comfortable with the $10K investment, but I might stagger in like you suggest.

I think I'll keep my current 401K where it's at now for retirement purposes and use this additional money to invest as I see fit and be more liquid. If I can grow this investment I'd like to eventually split some of it off to help my (unborn) child with education. Is that a sound idea, or should I start a separate fund all together for the child?

So I talked to the wife.

I have approx.92% of my Portfolio in Taxable Schwab doing really well , with almost all dividend paying..

I have an additional approx. 8% in a 401K , and it is 52K to play with , as I won't be touching it for 10 years at least..

I am busy with other things, but I am ready to try the Investing 102 Strategy.

My plan is to see what is available in the Piece of Poo 401K plan, and then move 10k in the next 30 days.

Since Schwab is doing so well, my Wife says to leave it alone, but the 401K, is different.

Also, Any Cash I have is for my present projects, and rainy Day sleep well cash.. So that money is off limits.

So Greg, other than the obvious things you have told us, is there something I should be considering ? Mike V.

I have been reading for days, and just started posting back recently. I told my Wife that these guys are smart and i wanted to Listen for a while before putting in my two cents, or asking advise...

This Thread is Great.... It will fund our Toys!!!:lateral: :cheers: :woot:

So the update is that my 401K has limited options.:rolleyes:

I am getting 4.5% out of it, and it has gone up...:thumbsup: So that is good news..

So I may just leave things for now, and put together 10K Of Mad Money/Investing 102 , some other way..:willy:

:lateral: :cheers:

Well -- I'm a "buckets" kind of guy. I like control -- and I like to see results -- and I don't like to commingle. So for my kids - I opened separate Schwab accounts for each one - with mom and I as joint tenants... It's easier to see your progress -- and depending on their ages - you may want to be much more aggressive in their accounts than you would your "retirement" bucket.

So - for instance - I might buy a 5 year old - $500 worth of Pandora... or Facebook when it comes out... which are stocks I'd NEVER buy for myself... but these are SMALL purchases that can have big upside potential... and if you have 13 or 15 years before college year one -- you could hit a lucky one.

For me - different "goals" different mindsets - Different accounts...

So now you have 9K for you to play with and 1K for beginning school savings bucket! :unibrow:

I just put two through OUT OF STATE college. The real costs are not just the tuition -- it's the LIVING expenses... they have to eat - drive - books - live somewhere... have a pizza once in awhile... and they have to come home once in awhile or you go there.... Even if you live 5 blocks from the college - they won't want to live at home... Trust me. You won't WANT them home past the freshman year.

Alright, its taken me 2 days but Im now caught up on this thread from having taken a holiday break. I have a couple questions:

How about a little investing advise rearding fund selection. I already understand your viewpoint towards funds in general (Why paysomeone else to make selections you could make foryouself) but my Fidelity 401k provides only Funds as selections. I'm 37 with 30 years till retirement so I can afford to play with the riskier stuff. Rather than just throw a dart at a list of stock based funds, what should I look for? Highest annual return over the life of the fund with the lowest expense ratio? Fund information is limited. Its easier to look up the fund on Google. If a fund pays a dividend, (Not shown on Fidelity) do I get that dividend or does Fidelity?

Next step is to open a Roth IRA. What should I look for in a broker for my IRA. From Fidelity's page: "Investment choices - A wide range of mutual funds, stocks, bonds, ETFs, and FDIC-insured CDs" This leads me to believe that my choices, though wide, are limited to a selection. Are all brokers like this? Which one has the widest range of choices?

Thanks. I Love this thread and have learned a lot.

You need to find their TRADING SYMBOLS... and then do the exact same research using Google or Yahoo Finance as you would with stocks... look for the best long term track record... or best total return over the long haul.

For diversification -- you can buy Large Cap - Mid Cap (this is the size of the companies they invest in) etc -- or you can also get some "International" exposure in various geographical regions - such as "Asia" etc... and they're also usually "Growth" or "Total return" or "Growth and Income"... The PROBLEM is that just because they have the "Growth and Income" label - doesn't mean they're invested in the right stuff to actually EARN their names!

Did I mention that MUTUAL FUNDS SUCK? They're designed to lull the masses into hibernation while they make massive fees for doing nothing... Don't even get me started...

IF THE FUND GETS DIVIDENDS -- they're reinvested. So yeah -- you get 'em -- and it will be reflected in the total return of the fund.

Did I mention that MUTUAL FUNDS SUCK?

Here's the other problem with mutual funds. You buy their "NAV" -- Net Asset Value" on any given day... but that can go DOWN just because maybe some company lays off half a zillion people - and those people MOVE their IRA's into Rollover IRAs and cash out of the stinkin' mutual fund they were all forced to be in.... so the mutual fund has REDEMPTIONS -- CASH they have to pay out - so they SELL shares of stock to cover the redemptions. They're not in control -- and more important - NEITHER ARE YOU.

But treat them as if they were individual stocks -- research them - look for the best PERFORMANCE over the longest period of time.

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

ROTH IRA -- Just pick ANY of the BIG NAME discount brokers.... Schwab - Fidelity - TD Ameritrade etc... I have a Fidelity account -- I don't particularly like them -- or their website - but you can buy/invest in anything there that Schwab has. I prefer Schwabs website. But I actually have accounts about half a dozen DIFFERENT brokerages. One for bonds... Wells Fargo for an IRA (they have a division that if you're a big enough customer they'll hold "private paper" for you - most brokerages won't)... but for just good old fashioned information and ease of use... I like Schwab. It could also be that I've been using them for years... so I'm familiar with their website etc.

Did I mention you are right... Mutual funds and most 401K plans SUCK..

That is why approx. 10% of my investments are there . I used my old company to match me for the time i was there, and 90% of my Investments are in Schwab, which i control, and the Fees are plain..

Did I mention that i agree that Mutual Funds Suck, and most 401K's are POO...

Greg,

You have really opened my eyes to investing in stocks. Up until now I have been investing most of my retirement funds in mutual funds. I own six funds right now and have my money evenly divided between small cap, mid-cap and large cap funds. I was just doing some research on the ten year performance of my funds. The ten year total returns (including dividends) has ranged from 22% to 147% with an average return of 68%. That equates to roughly 6.8% per year (simple interest).

Just for comparison sake, I took 12 stocks, most of which have been mentioned in this thread and calculated ten year total returns (including dividends) The stocks included were HD, PFE, CVX, MCD, MO, KFT, JNJ, KO, T, KMB, PG and CAT. Ten year returns ranged from -2% to 383% and averaged 143% which is approximately 14.3%, more than double my mutual funds average return.

I have reviewed the stock holdings of my mutual funds and I believe I own all of the stocks mentioned within the mutual funds. However, the funds also own 100+ other stocks, some of which I have no clue as to what they do.

Anyway, this has been a real eye opener for me. Thanks again for your insight.

Fantastic work Woody!!

This really is so simple ANYONE can do it -- but somehow we'd rather "leave it alone" or ignore it altogether... :faint:

So you just summed up WHY I THINK MUTUAL FUNDS SUCK.... because they're not going to buy anything you can't on your own... but there PERFORMANCE will be pulled down because of DILUTION.... They can't just own the best of breed -- they're just going to buy EVERYTHING... because most are simply set up to mimic some "standard" -- whether it's the S&P 500 or some other index. Then they churn the stocks -- and charge you fees for all this... and in the meantime you have no idea what's what.

If you can buy 10 to 20 top stocks - you have a mutual fund. No fees. And you are in control.

Mutual funds were great for people -- they get a job -- and they can "save" $50 or $100 per paycheck... so they have a "place"... but you can do better on your own as soon as you have 10 grand or so.

Again I am still learning, so bear with me. I really hate 401K and the Mutual Funds in them... Fees and terrible choices....

But in my Schwab self run plan, I do own , along with many other things, these Mutual Funds. I am not saying to buy them, remember , I am a novice, but I picked Great performers, but i am not sure if it is the best route..

I have the following

OIBAX,LSBRX,TGLDX,TPICX,SAMIX,TGINX,PTTDX,

I did the research, and these picks crush the similar funds of others.. But they are really cut up into a thousand investments..

But I am going to have to do so much homework after reading this thread...

I now what you mean, Im looking at everything now because of the info hear....WOW. ( I take it that GW hates funds)

Yes.. I truly believe that just doing the investing and research, and networking like we are doing, will be more than most will ever do...

With study and Smart work, we will do well...But with a little more effort and research, we can do even better, without being greedy...IMHO:cheers: :lateral: