I was actually going to post a nice update involving KMP and why it's a great example of what drew me to dividend investing but Greg beat me to it. For me, I'm hitting 25% returns after 2 years of owning KMP. So much of it is from when the dividend payments were being reinvested while the value was down. Everything that Greg and others have mentioned is happening for me. KMP is simply the name that's in the news right now but it's not the only stock that's working like that for me. OXY and SO definitely fall into that category, too. I've thought about selling and taking my gains with KMP, but I'm not so sure I'm going to now. I was seriously considering grabbing up some KMI before this news broke. Now, it's just going to happen for me anyway is my thinking. Any one have a different opinion they care to share and why? After all, this is about learning.


Thanks

Glad to see you got something out of the thread you started!!!

LOL

lol. Yes, I certainly have. I'm really glad others have too. This is a great thread.

Here's another Investing 102 moment.... Home Depot (HD) is a boring old stock that pays a dividend... That's trading UP $3.00+ a share in premarket trading. Why? Because they knocked the earnings ball out of the park.

My point for Investing 102 --- you don't need to gamble on the latest greatest IPO's all the time in order to have some real nice positives in your accounts. Here we are with TWO names that we've used for examples in this thread on a regular basis -- Kinder Morgan (KMP) and now Home Depot (HD) that have nice jumps in value just THIS MONTH!!

I'm not saying that you should own stocks that we've discussed! Not at all! What I'm saying is that these are "boring" names... these are just examples of names you can buy and sleep well at night... and here they are hitting home runs for you.

just got another 8.3% dividend raise with MO. This crap is so boring.

Oh Yeah.... I'm pretty sure everyone on this board got AT LEAST an 8.3% pay raise this year right?? Sure they did!


HAHAHAHAHAHAHAHAHA


I'm glad you guys are having "some" success with all this stuff. It's so difficult isn't it? LOL

I finally jumped on the Apple bandwagon and bought 10 shares. I already owned 15 shares of Tesla and have another 8k in my 401k. Not to shabby for a 35 year old that just started building his stuff 2 years ago.

Actually, I got a 10.9% raise this year, so yes, some people did a nice raise...

Good names to own for a 35 year old. But don't forget to also invest in some good old fashioned solid dividend payers.

And WOW -- That's a nice raise!! Raises have been few and far between for most folks the last 5 years. SO good for you.

I often comment to others - when discussing stocks - that I consider myself to be Mister Joe Average guy. I wear stained blue jeans and t shirts with welding holes in them... While we enjoy a meal at some of the worlds finest places - I USED TO stop at McDonalds (MCD) once in awhile.

I sold my MCD holdings when I realized that "I" no longer stopped there - and that in fact - I began to AVOID them even if I was hungry. The food quality wasn't what it was - food was served slowly - served cold - and many times I couldn't understand one word the employee was saying. They also were dirty.

For Investing 102 basics... I often mention "fundamental changes"... and to own companies that you use personally. If you're an AT&T customer... you buy (T)... if you use Verizon (VZ) then buy that one instead. That way -- you can use yourself as a gauge for how things are going. If T pisses you off every time you interact with them -- and you switch services when your contract is up.... SELL! You're a good judge of what's going on with a company in general and if you don't like them - chances are - others feel the same way.

I sold MCD because I personally no longer liked the way they were doing business. I went from liking them to thinking they sucked. If I'm average Joe - then so be it - I figure others must see the same thing I do! I don't want to own things I'm not proud of! Period.

So here's a FUNDAMENTAL CHANGE in a business --- and thus my post today....




In 2013, McDonald’s reported a decline in U.S. same-store restaurant (those open at least 13 months) sales and a big drop off in customer traffic, breaking a 10-year streak of gains in a market that generates 30% of sales. And so far in 2014, things have only gotten worse, with McDonald’s diners staying away in droves.



Pay attention to these kinds of warnings. Yes - new management etc might turn a big ship around - but in the meantime - you as an investor might have lost out on the GROWTH of some other company that is kicking your butt... Don't stick your head in the sand and be a complacent investor! Retrain your "employees".... punch out and find a similar but better growth and income story. Be heads up -- it's important to how you're going to spend your retirement.

Just for fun --- here's what I'm talking about when I say --- being heads up and pro-active with your investments WILL affect your retirement....



Go pull up a ONE YEAR chart of McDonalds (MCD) and overlay (compare) it with Jack in the box (JACK).

Now add in Chipotle Mexican Grill (CMG).


MCD is DOWN 1% for the 1 year period while JACK is UP 43% while CMG is up 66%..... If you have 10 grand invested in them that's 9900 in MCD vs 14,000 for Jack and 16,600 for CMG. Which would you choose? Did ya used to go to one and now always to the other? Pay attention to that - why would you own MCD yet always choose to eat at CMG where there's a line out the door. Or you notice that CMG USED to have a line out the door and now you're the only dude in there... HELLLLOOOOOOO. Pay attention!

I'm not saying to sell one or buy the other.... I'm saying to pay attention to ALL of your investments and keep up with basic news and your basic feelings. Always been a Windows user... and switched to Apple... but you still own Microsoft? Maybe you should listen to yourself and switch your investment too. Ditto if you were always a Ford guy and now love Chevrolet etc. or vice versa.

INTERESTING......




5. Millionaires are not necessarily super savers.

You don’t have to sock away 30%, 40%, or 50% of your income to amass $1 million (though that would help get you there faster). In an analysis of 401(k) savers who made less than $150,000 a year and still had more than $1 million in their plans, Fidelity found that those millionaires saved only 14% a year on average.

Their secrets? Save steadily, of course. And let the company do some heavy lifting. Fidelity’s 401(k) millionaires saved 19% on average when employer contributions were included, and 28% of their account balances came from the match. In fact, a new study from the Center for Retirement Research confirms that saving 15% a year for three decades is enough for a comfortable retirement.

6. About 15% of millionaires didn’t bother with a college degree.

Mark Zuckerberg and Bill Gates aren’t the only millionaires without diplomas. Spectrem Group found that 85% of millionaires have college degrees. Another 12% attended college and dropped out. On the other hand, 31% earned an advanced degree.

7. The young generation of millionaires lives lavishly.

Gen X and Y millionaires have had less time to reach seven figures, so not surprisingly they tend to earn far more than their baby boomer millionaire brethren: $677,000 a year on average, vs. $198,000 a year, reports Fidelity. And they tend to act the part to the hilt: 63% of Gen X and Y millionaires own vacation homes (vs. 21% of boomers), 44% own boats (vs. 12% of boomers), 63% belong to country clubs (vs. 15% of boomers), and 38% fly first class (vs. 5% of boomers).

8. Ultra-millionaires love Home Depot.

Where do the wealthy shop? Not where you’d think. About 57% of millionaires worth more than $5 million say they shop at Home Depot all the time, according to the Spectrem Group. Other favorites include Costco, Lowe’s, and Target. Only 8% say they regularly shop at Neiman Marcus.




I drove 4 hours round trip yesterday --- to go to COSTCO....

Sold my 70 shares of MCD today... What Greg says makes a lot of sense.

I haven't decided what to replace it with yet, but I will soon.

I'm up 9.61% overall since rejoining the market in February and have booked over $1200 just in dividends during that time period...with more to come soon. And I'm still only about 33% invested.

Should I have been putting more in, sure...but at the same time this last little dip didn't bother me in the least. I remember all too well all of the nights spent worrying about dips like that. This time it is different, and I'll continue on with my plan of just putting in what I'm most comfortable with and learning as I go.

On a similar note, a few years ago I bought both ATT & VZ due to dividend rates. ATT has delivered a 13% gain, VZ 26%. As a satisfied VZ customer I'll be rolling the ATT shares into VZ when the timing is right.

As a current Comcast customer...........there's no way in h*ll I'd buy their stock. :lol:

And that's exactly the way you should be doing it Lance!! And good for you on the returns!










Yes -- I too used to own both... then thought that was dumb. Turns out I'm dumb. But I sleep fine at night knowing T (or VZ) is a good company that will continue to contribute to my retirement bliss.... 13% isn't as good as the 26% but it could have just as easily been the other way around. What I don't like is to see DOWN 1% vs someone else that's doing WAY better!!

Found this "calculator" via Seeking Alpha.... it shows the power of compounding.

It's completely hypothetical of course because you wouldn't be using real actual numbers of a particular stock. But it certainly is a powerful "message" when you see the numbers even if you just use the 100 shares at $100 -- leaving all the 5's in place -- but change the number of years to 30... or then change that to 35 etc.

Mostly what it compares though is the power of REINVESTING the dividend versus what I do - which is spend it (But I'm already retired). LOL



http://www.buyupside.com/calculators...tmentdec07.htm

Looks like my purchase of Costco was just in time. :thankyou:

That's the thing about investing. There's never a good time in anyone's mind. That's the biggest hurdle to get over. Doesn't make any difference if a guy is buying $100 -- $1000 -- $10,000 or a million at a time.... I personally guarantee the stock you picked WILL be lower than your cost basis at some point. Usually 15 minutes after a guy buys. I will also guarantee the shares will be higher right after you sell. It's that long space in-between where the money is made.

The other day I decided to cut my holdings in British Petroleum Prudhoe Bay Trust (BPT) by half... I held 20,000 shares and while it pays a huge dividend percentage -- There's other stuff I want to buy -- and I like to always have pretty substantial cash positions. So I put in a limit sell order at $92 - which was well above the current trades... I put in orders like that and then go do something else. If they get sold fine - if not - the shares are still in my account and we'll try it another day. Of course they sold - and the shares closed the day at $92.50. 50 cents per share @ 10,000 shares is $5,000.... So I left a little on the table. But I don't get caught up in that - because I know I'll never ever get it "right". I just do what I want/need to do. I still had a very nice gain in the shares on top of the outsized dividends collected.

My point -- it takes time to get over "losing" the last nickel of gain.... and it takes time to get your mind right that no matter when you buy - you probably could have waited and bought cheaper. In the long run - it just doesn't matter.
You do get used to it.

Kind of like the housing market. Most must sell to buy another.... we wouldn't buy another if we thought the market was going to hell.. so at some point we must put up a for sale sign -- close a deal - and take the plunge into the next home. We just KNOW that it's going up over time so we're okay with it. I never can figure out why that's okay but stocks are thought of differently.

I was just kidding around since you mentioned your trip to Costco.

Still gave me good segue for a good post!


I don't own Costco (COST) because the dividend is just too low for
me... but it's a good well run outfit.

I sold off Target and bought Costco. The retail market seems saturated, Costco appears to have somewhat of a niche. I'm not going down there and wasting 3 hours of my Saturday for bulk jalapenos and two cents off gas, but hey, I see value there.

I drove the 2 hours to Twin Falls - specifically to go to Costco to buy a Windows Laptop. ONE item - in and out. Done. LOL I'm a Mac guy - but needed an up to date Windows machine for the AiM SmartyCam I'm setting up in the Lotus (if it works I'll get one for the Mustang too). My point of all this ----- by the time I cruised the aisles I'd blown thru a grand... And that's where they get ya. Everyone that bothers to go there - runs thru all the aisles and finds all manor of stuff they didn't know they needed. I just ASSume that whatever I put on the cart is the best price I'm going to get on that item.

So I can sleep knowing you got enough stock of cheeseballs for said moderator?

I don't mind of you keep blowing through cash while in COSTCO at all, Greg. :D That one has been a sneaker for me. I got it as a steady eddy since the dividend was so low. Right now, it's going well with capital gains which I was not expecting. More proof that you just have to get in if you want to make money instead of waiting on the sidelines for the "right time".

\






Those take a trip to WalMart..... Specifically - the one right there on I-5 and the 162 turnoff to Thunderhill. $4.99 for the giant plastic jar of artificial delights...










Good for you Trey!! And yes --- the key is just to forge ahead and get in whenever a guy is ready. Investing just isn't about todays price.... it's about getting invested in the proper KINDS of stocks - and then staying invested and plowing those dividends back in for the compounding affect. Next thing you know - you're happily retired floating in the pool in Maui sipping on a Pina Colada....

Failure to invest - timing the market - buying high and selling low - that will have you retired as a greeter at WalMart or wrapping breakfast sandwiches at McDonalds when you're 70...

The choices people make NOW -- will determine their "fate" later when they can do the least about it. I know which way I'd choose to go.

Here's why - IMHO - "P/E" ratios don't matter....

I don't invest in "growth" companies. I simply can't afford the acid stomach that comes with them - and being retired - don't want to be in a situation where the MARKET turns south for a couple years and I have money tied up in stocks with red (underwater investments) that don't pay me to own them. Having said that - you younger guys should be adding GROWTH to your portfolios. You can afford to wait for the market to turn higher after a downturn - you're NOT retired - and you're still earning a living to support yourselves.

I've missed out on a couple doozies this last couple years. Namely FaceBook (FB) and NetFlix (NFLX). The ONE YEAR chart shows FB with 85% growth and NFLX has 73%. Those are big numbers.

Here's the point.

Some folks get all hung up on certain metric such as P/E (Price to Earnings) ratios. And here are two prime examples (as that's all they are!) with huge P/E's - where the P/E just simply doesn't matter. Why? Because what you're investing in is "the future". Investors are betting that these companies have a LOT of growth left. That they're still infants as far as where there businesses are going. Whether that's right or not is another story and we really just don't know that, so any discussion is just guessing. And when you invest in this type of company (huge P/E big growth possibilities) that's all you're doing. You're putting on your thinking cap and asking yourself.... does this COMPANY - not the stock -- have legs? You'll have to separate the STOCK from the COMPANY... as the stock will follow the company. If there's big growth in customers and earnings and eyeballs or whatever it is that the company is measured by... then the stock will follow.

HERES the issue you'll eventually have to deal with as far as the STOCK goes....

IF they "miss" the whisper number - if they miss the projected growth numbers OR if the MARKET turns south --- the air comes out of these kinds of investments far faster than a dividend stock which is supported by the dividend payment percentage - which grows as a percentage as the price of the shares come down. What happens is that a LOT of people bought at far lower prices -- and they'll "lock in" their profits FIRST in these kinds of investments (which means they'll sell these to raise cash FIRST) --- more sellers than buyers and the price comes cascading down. That's the kind of thing someone like me looks for.... that's when I'd be a buyer.... I always have huge cash positions - I don't sell to raise cash - I already have it.... and I know where the price can go and assume they'll still have huge growth potential so if I missed it the first time around MAYBE (big if) I'll get a chance to buy some on sale.

In the meantime -- if you have a double -- so what if it goes down 30% -- it's down 30% from a double!! Good for you if you can stomach that... and if you're young - you should be able to. The hell with P/E's on this kind of stuff - what counts is making MONEY.... and nobody ever paid their bills with P/E...

P/E DOES count on big stable companies! Don't confuse the two types of investments -- one is GROWTH -- another is steady eddy or dividend paying etc. WE'RE talking about big growth type investments here. Monster Energy - NetFlix - FaceBook - Tesla.... NOT GE or MERCK

Greg,

Thanks again for your always insightful posts. I may not post regularly, but I certainly monitor this thread daily and am always learning.

To all who are on here, thank you as well. You're questions, comments, discussions etc have helped me learn a great deal of information in a relatively short period of time.

Me and my future thank you. :)

I do hope I get to meet some of you some day. If you're ever in the California Central Valley, please shoot me a PM and come say Hi.

Albert

So I have another $1000 to throw into the market. Do I put it into one of my curent Tesla, Apple or GoPro or go somewhere else?

If you already own Tesla --- I'd split it between Apple and GoPro.... maybe a 70/30 split or 60/40....


Or if you're a real gambler.... 50/50 Twitter and GoPro.

I picked some gopro up @ $46.4 then again on the dip @ $38.8. it had a good run today and is at $48.90

Interesting study of credit cards vs cash usage.

Personally - I'd be embarrassed that I had to use plastic to pay for something less than $100... LOL - obviously that shows my age group! My wife buys groceries on the Visa while I use the debit card. It all costs the same... I just look at people using plastic for that kind of stuff as people that have no money. Of course that isn't true... it's just the way I grew up. My son sees no need for cash for anything. Got card? Got money! LOL





http://archive.pnj.com/usatoday/article/14701687

I used to be the same way use cash for all the small stuff. Now I use plastic for as much as I can. I have credit cards with all the Airlines I use. That way I'm getting some flyer miles with every purchase. I flew to Cabo for $80 and I flew to Dominican Republic for $110.
I few years back I used to have a GM card that I'd used to use the money earned towards vehicles.

That's Gwen's theory -- every buck is a mile on the plane....

I use plastic as much as possible. I get 1.5% cash back with my current card. I don't keep a balance and I pay off the bill at the end of the month. There are some things that it doesn't make sense to use it for, for instance, I tried to pay my mortgage with a credit card, but they charge a fee that worked out to around 2.5% to do so. The cash back rate didn't justify it.
I use that 1.5% cash back for car parts.

does one buy more if your already in both, what to do what to do.

TSLA at an almost all time high today, hmmm.

as everyone else has mentioned this is an interesting thread, good info.

401k roll over
 

Hey guys, good info on here.

I need some investing advice

I just recently switched jobs, so my old 401k is now just sitting there waiting to get picked at by the companies fees.

My new company offers a nice 401k as well, AND free financial management.

So today I talked to the guy who does all this for us.

He was talking about either rolling my old 401k into my new 401k OR rolling it into an IRA

He suggests the IRA because you can make more choices, thus have a higher potential of making more money.

Im a little leery, as I am more conservative when it comes to money and the fees and such of this type of investment are a little unnerving.

Is this guy giving me good advice? Or is he putting me on a path that HE will make the most money from?

Thanks

It always pisses me off when people get antsy because a stock they own goes up... WTF... isn't that what you want it to do?? Or a hot stock hits a new high... think about this for one minute. This was an IPO.... so every time it goes up after the IPO price - that's pretty much a "new high". Obviously "other" investors are willing to pay more money for the shares... So shouldn't this be GREAT NEWS?!?!?

Stocks setting new highs - and splitting - and setting new highs ---- DUDE!! That's how people become millionaires. I can recall dozens and dozens of stocks that have made people millions for just this very reason. I know a guy that invested 20K in Microsoft and it made him a millionaire. Why? Because it just kept going up. That's a GOOD thing not something that should be looked at with disdain.

#1 -- You don't tell us much about who "He" is. Is this someone that works for the company and manages the 401K? Who is he?


#2 -- You could have "rolled" your 401K into an IRA immediately after departing the last company and have been running it "self directed". You don't need anyone to run an IRA for you. So there would be no "fees" etc to pick you apart.

#3 -- Nobody can tell you what to do - nobody knows your personal financial situation. Read this thread and learn -- so go back and start at page one.

I forgot to respond to your question about buying more of something that you already hold. Reading this thread will explain the 5% rule. You shouldn't have more than 5% of your total investable funds in any one name. Obviously - this rule is nothing more than a guideline. If you have 10 grand invested and only have 4 names - that would put 25% into each name. When you're just beginning there's no way to keep to that 5% rule. 5% is more for once someone has 100K invested.

BTW --- My other post responding to your TESLA statement about it hitting an all time high... when I say I'm pissed off.... that DOES NOT mean at you for your post. It's a statement about investing in general. And more importantly - there is absolutely NOTHING wrong with the market going up or a stock going up! Nothing. Pull up a chart of the stock market since 1929.... UP is the general direction -- like houses - like inflation - like EVERYTHING - Gas - your electric bill. About the only thing that's gone down is Flat screen TV's and Cell phones. LOL


I've "averaged up" in many many names in the market. It just is a mental thing to buy more when stuff keeps going up. But it's doing EXACTLY what you want it to do!

1), the guy is an private investment guy that handles the companies 401k, he is a part of Baird Financial

2) To be completely honest I am really intimidated by all of this, never having done it, nor knowing anyone who has done it. Hence why I havent touched my old 401k, which is with Fidelity in one of their target date funds. About a month after being hired on, my new company had their 401k review and the investment guy talked to me afterward about possible strategies.

3) thats alot of reading :wow:

haha thanks

1) Baird Financial is a HUGE firm with BILLIONS under management. Don't be afraid of them.

2) Read this thread from start to finish - take your time - and you'll be a lot less intimidated

3) It's YOUR future we're talking about... given the amount of time you have to live in retirement... the 400+ pages of this thread is childs play.

4) You have an obligation to yourself and your family to get a grip on your finances. It's EASY... and more importantly - IT'S THE MOST IMPORTANT THING YOU CAN EVER DO.

Like anything else - we all do things that we start out knowing nothing about. We all manage to educate ourselves about clutches - motors - tires - paint etc. Except that NONE of those are very important. Yet me manage to dive in and get involved.