Yeah but back then I didn't have two dimes to rub together!

Can a "Limit" order be applied to a dividend reinvestment? I only ask because that was what the original question was derived from.

Ah - no it (dividend reinvestment) can't -- that's all just done automatically.


I was perhaps confusing -- in that I was trying to make the point that the ONLY WAY someone would get the exact same price - regardless of brokerage etc - would be to enter a limit order.... otherwise every transaction is likely going to be at various prices. Just look at a chart of DAILY activity for the name.... and then look to see how many shares trade per day - and the average daily trading etc...

I love this Warren Buffettism.....



Americans LOVE stocks when they're expensive and HATE them when they're cheap.


SO TRUE!


Resist the impulse to CHASE a rising market..... but at the same time - we have to guard against the market pulling out of the station for a run and we're standing on the platform holding our putz.....

It's why I URGE YOU to just buy when you're ready.... high or low.... When the market is high - you're $1,000 will buy fewer shares.... when the market sells off and everybody runs for the hills.... you're $1,000 will buy MORE shares...

In other words GET OVER IT...... you'll get nowhere if you're not "IN" and you're not buying enough shares at any given time that it's going to make a big deal in the overall scheme of things.

Think about it -- you have $1,000 -- and you're going to buy Home Depot (HD) = that $1,000 would buy 7 shares at $135..... and so your purchase today would be 7 X 135 = $945

Had you bought at the 52 WEEK LOW -- of $109 -- you'd have bought 9 shares! So that would be 9 X 109 = $981

So had you done both those buys -- you now have 16 shares for an AVERAGE COST of $120 (add both purchase costs $945 + $981 = $1,926 divided by 16 shares.



See how that worked out?? GET OVER IT..... you're reward is ZERO if you invest ZERO.

Anyone looked a what GOLD has done lately?


Yeah ---- not a good holding. IMHO......... E - V - E - R

I couldn't bring myself to get into Gold or any of the precious metals commodity stocks at this point. The economy is still doing well. If I start to feel things slow down in my business and people aren't spending like mad, I'll reconsider.

In the meantime, I'm still buying stocks every month. It was nice to log on this week and see some MO shares bought automatically from my dividend income. :flag2:

My son already has some piggy bank money. Instead of going to Wells Fargo and losing money with inflation in a savings account, I bought him a Vanguard index fund. One whole share! I figure I'll throw his birthday and Christmas money at it every chance I get. We are already funding his 529 every month. I'm looking forward to teaching him about how to invest and manage his money at a young age.

#1 -- I hope you all have had much success with your investments this year!


#2 -- I personally L - O - V - E Cramer's #1 Tip. Here's why:

The minute I mention "I" own Annaly Capital Management (NLY) --- and "you" (the readers) go out and buy it for no other reason than because I said I owned it.... Then I decide it's time to sell -- because for me - it's reached the goals I set for it - or there's a what? Yes! A Fundamental change.... I sell but I don't say that here = or where you work (if you're following some co-workers tip) etc. You keep holding and loose your butt.... WHY? Because you have NO CLUE why you bought it - what it is - what it does - and you were too lazy to do the work to find your own investments! Oh yeah - OUCH. A couple losses in the "market" and you're forever turned off.... and you suffer yet again come retirement time.


Also -- remember how many times I say "the minute you buy, there's a guy on Wall Street yelling at everyone else --- Okay guys! He's in! Take 'er down!" Yes - a stocks price will be lower than what you paid for it at some point. You'll need to understand Tip #1 to get Tip #4





No. 1 Tips are for waiters.
No. 2 You must do the homework if you are going to own an individual stock.
No. 3 If you can't do the homework, then own an index fund.
No. 4 If you fear losing money, don't own stocks at all because they will go down as well as up.

Greg, i'm curious about the advantages of owning individual stocks vs. a low cost Vanguard index fund for the average investor?

I cancelled my whole life policy last week and I'm looking for a new bucks to toss the that money in now and moving forward. I'll still stay the course on my individual stocks, but would like something a little less hands on for this bucket.

I'd be interested in hearing more about the thought process behind cancelling a whole life insurance policy. I have one too and I often think the money could be put to work elsewhere, like in a brokerage account or IRA. Guess it would only bite me if I kick the bucket early, obviously...

On your question Todd, I've been using ETFs for the type of investing you describe. No commissions online and goal of generating the 'market return'. Primary downside with certain ETFs and mutual funds is you are buying the whole index, the good, bad, and everything in between.

It seems the best things in life are fairly simple and Whole Life isn't. Have you noticed how complicated that product is? The fact of the matter is that you can get term life for pennies on the dollar to protect your family. The more I researched Whole Life, the more I hated it!

Just to clarify my thought process, I'm 39 and 100% debt free including my house. If I kick the bucket, my family will be doing alright with our current net worth and my 20 year term life policy. If I live to be 79 which is roughly the average life expectancy of an American these days, I've paid a whole life insurance premium every month for 40 years that I don't need!!! Let's call that $100,000 in premiums for round numbers. Clearly that gets invested plus the cash value monthly amount. in my case, it was another $400 roughly for principal.

The best Whole Life policies will get you 5% on your money if you keep them FOREVER. They are so loaded up with commissions and fees the first 10 years, that you will be in the hole in most cases at that point. Many policies also surrender your cash value for the insurance amount. Your family doesn't keep both. Lastly, for you to get your money tax free, you have to BORROW your own money with interest which offsets the death benefit! Bull f#@#@#

Let's say you invest the premium amount of $200 plus the $400 in cash value you were creating in stocks, index fund, or mutual fund at 8% for 30 years. Drum roll.... You end up with over twice $$$$$! I'm talking $500,000 more! The power of compounding isn't a gradual ladder. Compounding at 8% is stronger than 5%.

Now, I'm not saying there aren't times when people SHOULD keep Whole Life. Especially if your health has declined since you got the polices or you are getting old enough where term insurance is hard to get. In my case, I aggressively paid off debt over the last 3-4 years and it eliminated the need for the extra insurance. With that being said, I would've been better off with term from the start and investing my money in a higher return vehicle.
-----
One thing I recently learned is that 96% of mutual funds under perform the S&P 500. The Index funds I've seen, out perform it slightly due to dividends.

You make a good point. You get the whole ball of wax instead of hand picking the best companies. I think I'll move forward with both strategies and see where they get ME in 5-10 years. I enjoy the individual stock investing.

I'm a big fan of whole life policies, my first investment (and still to this day my best investment) was the whole life policy I bought when I was 21 years old.

It was sold to me by a financial adviser as a "reverse IRA", basically a $2,000 a year premium with a death benefit and compounding tax free cash value. I have no doubts I can retire comfortably just by borrowing from the cash value of it alone if needed. Remember we have no kids and basically no debt, so term life has never been on our radar, this was strictly an investment vehicle.

That said, as you get older they are harder and harder to get to make financial sense. I've tried several times as I got older to buy more of them and the cost of the insurance is just too high to make them work. My policy's cash value crossed the invested amount between years 7 and 8. Every time I tried to buy them after that it was 9-10 years before your cash value crossed past the invested amount and the growth rate was much slower after that as well.

So the trick to cash value policies is...buy them early...and keep them forever. I smile every year when I write that premium check and see how much the cash value of the policy rises...tax free. My only regret is I didn't buy more of them earlier.

That sound exactly like the pitch I got from my advisor. :sarcasm_smiley:

Let's look at an analysis:

You invest $2000 a year at 5% for 59 years in Life Insurance.

Or

You invest $2000 a year at 8% for 59 years in stocks.


Life Insurance Compounded: $705,167

Stocks Compounded: $2,504,426

This is a prime example that compound interest has more momentum at a higher rate.

I'm leaving out the fact that you can invest more principal in stocks due to no premium. Now if you have a life insurance policy where you get the cash value and death benefit, that needs factored in. (read your fine print) You do need to back out the interest you pay to borrow your own money. Most are around 8%. I don't trust them. My assistant told me a story about how her father's life insurance failed to pay out.

How many insurance companies go out of business? Not many... The cards are stacked in their favor.

Well, I just finished making my 2017 selections in the Roth for the most part. I decided to mix some things up and might do so further. For the most part, I believe in holding a position for a long time so long as it is a great company.

With that said, I still did my typical position for the year in KO. My total return for that pick has been good but there has not been a lot of growth, if any for a while. I'm ok with that but I also want some growth. I decided to open a small position in DPS so I can get my growth and dividend. We will see what happens through the year to determine what I do come 2018.

KMI has had a great run up this year. Too bad I bought in years ago through KMP. I'm deep in a hole on this one. I see no reason to bail though. I do believe they will rebound but they also have a lot of debt that gives me pause. I decided to not add to this one due to those factors and the fact that I felt there was a better place to put my money while remaining in that sector. So, my money ended up in PSX. Solid midstream company that has had good growth and pays a good dividend. I'll continue to hold KMI and reevaluate them and PSX for 2018.

WFM I'm not sure what to do with. I didn't add to my position this year. I actually think I'm going to bail even though I'm in a hole with them too. That's a tough market to be in and they are getting beaten up. I didn't expect them to be a high growth pick. I didn't expect them to tank either though. The dividend is paltry. In the grand scheme of things, my position is small. The loss I'll take isn't anything great either. I'd just prefer to try and recover my loses in another stock. This deviates from my hold for a long time style because I honestly don't think they will survive long term. To me, they are a great company but people don't give a damn about that. They only care about cost. That sector is so competitive I expect their to be some causalities and am afraid WFM will be one of them since they are high end.

The rest of the picks in my ROTH received their typical increase for 2017. As far as I'm concerned, they are moving along just fine.

I've been adding to my regular brokerage account too. So far so good now that oil has rebounded a little.

Here's hoping 2017 is good for everyone.

My quick and dirty answer to LIFE INSURANCE questions is -----


Buy enough TERM LIFE - if you need it - to protect your family in the event of an untimely demise.....


Let me qualify that.


If you have enough assets to provide for your family without life insurance - then why would you buy it? I don't have any. Don't need it. Kids are grown - house and all the other toys are debt free.


But If you have a house mortgage and car payments - and little CASH assets..... then Life insurance would certainly be beneficial to those you leave behind AND IT'S TAX FREE.... So you could leave a paid for house and cars and whatever else you choose to toss in there.

You single? Buy a $10,000 policy so somebody can bury you. Done.

Definitely agree with both Todd and Greg. I kinda got setup on this path as my parents started this policy when I was a baby. They paid the premiums for the first 22 years, then I took over when I graduated college. I never really questioned it since it "seemed" like I was doing the right thing continuing it. There's been some opportunities to expand the death benefit at intervals through the last 10 years, so I did. At 33, I'm married, but not debt free, so I can see how it would be good to keep what I have in case of untimely demise, but I don't think I'm going to increase it anymore at the next 3-4 intervals. I'll have to look into the details some more though. Glad this got brought up.

To Todds point, can you imagine if my folks would have just invested the money they paid into this policy? I sure as hell wouldn't have needed to take out student loans to get my undergrad!

I had to chuckle because your pitch sounds exactly like the one the last two financial advisers (stock brokers) I had gave to me to try to get me to invest more money with them instead of in real estate or life insurance. :D

It's all good, I've been down the to buy or not to buy life insurance debate many times. I fully understand both sides of the discussion. I have seen the Life policys that go broke, don't return as projected, and companies that do not pay out as promised when asked to do so. It is a touchy vehicle for sure, research and timing is key.

Personally, my overall annual ROI on my market investments since I started investing back in the early 90s has been no where near 8%. In fact those returns look paltry compared to the 6ish % my Whole Life policy has returned (tax free) to my account year after year. The net asset value of my life policy has never had a down year, never lost value and never failed to pay a dividend. Also, if you ever borrow from the cash value of my policy, you pay interest sure...back to your own policy... You are basically borrowing money from yourself. Maybe I'm lucky but I prefer to think I just did my homework and picked a good one at just the right time...just like a lot of us have done with our dividend paying stocks in this thread.

If I get some free time, I'll create an updated ROI spreadsheet on my life policy and share it with everyone. Right now I'm buried in year end payroll duties, tax return prep, estimated tax payments and preparing for a 3-4 week vacation trip out West in a couple of weeks. Priorities ya know... ;)

The S&P 500 has nearly doubled since 1997 and tripled since 1987. Have you invested as consistently in the market and in good growth vehicles like index funds or individual stocks?

My strategy comes down to holding LONG. Should you cash out a decent whole life policy with only 5-15 years left to retirement, probably not.

Interest Rates
 

I've warned here many times about RISING INTEREST RATES and their correlation to values of your holdings.

We CAN NOT ignore the relationship. House values are affected by rising rates... as the rush to beat the rise in rates temporarily pushes buyers in to the market - they'll be the ones paying the highest prices ------ until the rates reach a point where they simply price out the average buyer and then home prices will need to be adjust DOWNWARD to get the monthly payments down to where people can afford to make them.

Autos --- We've seen a big cycle of renewal... bolstered by low rates that are often near or at ZERO...

Banks.... they borrow your money at super low rates and lend it out at higher rates - "the spread" - this increases as rates rise. Remember that banks use leverage in their lending.... and a simple .25 rise in the spread makes the banks a lot of money.

Capital spending here in the USA..... this can only be a good thing for the USA. But there will be lots of bumps in the road because nothing ever really just steams ahead as planned.... so while we should see a increase in capital expense here -- if rate rise too fast too far - that will pinch corporate profits and slow cap ex.... so we need a nice balance here. Sales and profits might continue to fund Cap Ex spending..... squeeze one too hard and it pinches the other off. I think we'll see a rush to borrow to get ahead of rising COSTS.... The more you borrow now -- the smarter you'll look down the road. But you have to have the CONFIDENCE to invest in plant and equipment etc - so we need confidence to stay high as well.


Healthcare ----- Oh my...... Who knows where this is going to go. My guess is we'll see LOTS of pressure to bring down prices and costs.... that is going to have to come from somewhere.... usually someones bottom line until they adjust their costs. But someone will be a winner in this space.... we just don't know what that is going to look like yet. I expect winners and losers in this space - rising costs - rising borrowing costs - and a FED that is hot on the trail of making changes.


Why does any of this matter? ---- Because PROFITS are what drives the stock market in the end. In the end this is what really matters. So if your costs rise -- are you able to sell more to make up for this? Are you able to raise your selling prices? If BUSINESS IS GOOD.... then it's not a big problem. It's a problem when cost rises and sales falter.... Remember we need TOP LINE (SALES) growth and BOTTOM LINE (PROFITS) to have a good stock market. To have a good stock market - we have to have a healthy sales environment. WATCH FOR ANY CHANGE. A reset or rebuilding of America can be an absolute boon to our economy -- but we must be ever vigilant of the ugly elephant of INFLATION as we heat up.... You couple rising overhead costs (rates) and price increases to cover said rising costs.... and that can become hard to contain and can spiral out of control like it did in the early 80's.

Odd question
 

My options ... my dividend stocks .... my mutual funds ... open a new Roth ? (Note 8% of the 15 mentioned above goes into a Roth)

Is there really any doubt a correction is coming on the horizon? When you team what Greg said with the debt cycle, it seems likely in the near future. Think about what happened 7-10 years ago. Many wiped out there excessive debts through foreclosure, short sales, and bankruptcy. When the economy came roaring back, they now had a large percentage of income that could be displaced with debt. The fact is that roughly 85% of cars are financed. The US economy is very reliant on consumers taking on debt to make purchases of houses, cars, boats, furniture, etc.. When Americans start getting toward the end of their available monthly income due to excessive debt load, spending slows down. Team that with higher interest rates and.... I know I've seen people spending similar to 12-15 years ago.

I recently read in the Wall Street Journal that the stock market had it's second best run under Obama vs. any other president in history. That's 8 years of serious gains. Housing has been appreciating for 5-6 years in most markets.

Are we there yet? Who knows, but we are much closer than yesterday. If I was closing in on retirement, I'd be making some conservative moves with my money, that I know. Unless I lived off my dividends like Greg! 97% can't do that.

One thing is certain, cash will be king in the next low cycle. I hope to be ready.

Good discussion here this morning guys. I wish I can add to these comments to help out, but I'm still learning. With my hyper brain the one thing I have learned (albeit slowly) is too keep it simple, basic fundamentals

Watching the closing hours of the Rolex Daytona24

I see a period of "between" --- where we are spending *thus - buying* FIRST..... as there's a rush to get things done BEFORE the rates go very much higher (we have time here)..... Then - as TODD rightly points out - the glass begins to fill with debt and spending slows accordingly. We're not talking about next week guys!!! But WE MUST BE OUT FRONT (that means to be thinking in ADVANCE) of this...... at some point. Not yet - but at some point you need to understand these relationships.

I'm with ya, my friend!

A great quote I read today:

"You must not only be in the right place at the right time, but you must be the "right person" at the right place and time." -T Harv Eker

I'd just keep it simple and put the extra money into your current dividend stocks after making sure your Roth IRA is maxed out for 2017. I'm assuming this won't be for a long period of time so there's no need to start a new retirement account to replace the no longer available 401K. Those are my thoughts anyway.

I hope the ESPP is a good option for you, too. I took full advantage of mine when at Halliburton a few years ago. It's worked out nicely even with the downturn in oil.

Along with what Greg and Todd have mentioned this morning, what are people's thoughts on industries that Trump has specifically called out and might be affected by his tariff demands? For example, I was thinking about opening a position in Ford just for the dividend. I'm concerned though that they may take a hit since many vehicles are made in Mexico. I'm also concerned about my own employer, Cummins. We have a lot of engine plants in other parts of the world. We sell engines here that were made in India, China, and Japan. I don't like it when I see certain industries specifically targeted for legislative abuse.

What are your options there? Can you roll this over into a self directed IRA? That may give you more flexibility than just rolling it into the new 401k plan.

This is essentially what we did with one of my wife's old employer's 401 plans. When she left they put her in some plan outside the company that has stupid high fees so I just had her roll it into a E-trade IRA where we choose the stock investments and only pay for trades.

The issue in the interim period will be that you can't contribute pre-tax money from your pay. I'm a little surprised they are handling the transition in a way that doesn't have you participating in the acquiring firm's plan prior to stopping contributions into the existing. Trey's point about funding a Roth during that period is valid, but those will have to be after-tax dollars. I'd ask your firm's HR group for more info about your options during this period. If they don't provide a mechanism for pre-tax contributions, you don't really have an option to continue that.

The potential cut in corporate tax rates has undoubtedly contributed to the DOW surpassing 20.000, if the optimism around that changes, we'll see a correction, and vice versa. I won't be betting against it happening in this political environment. Whether or not you agree with it, investing in stocks is one way to capitalize on it.

Yes, but with Trump proposing to reduce regulation and cut corporate taxes, hoping for business to spend those huge piles of cash they have been sitting on during Obama's reign....I anticipate things are gonna roll up higher, there may be a correction, but in the long run this party is just starting if you look in the right places...

Give us some details on the "right places".

Todd you've given us some info from books your reading. Do you mind sharing what's on your reading list with us.

Oh man, I've read a bunch of them on finances.

Total Money Makeover-Dave Ramsey
The Millionaire Next Door
Money, Master the Game- by Tony Robbins
Smart Investors Keep It Simple
Secrets of the Millionaire Mind-Reading now
Thou Shall Prosper-Reading Now
Rich Dad/Poor Dad
Cash Flow Quadrant
Who took my money

They have all impacted me in some way. Dave Ramsey motivated me to become debt free and to spend all your money on paper. Meaning, have a place for every penny you make. Robert Kiyosaki taught me young to leverage money and that did result in a good portion of my wealth in real estate. Tony Robbin's book gave me greater understanding of how the financial world works. He also lead me to some of the greatest investors in the world. The debt cycle info came from Ray Dalio. The Millionaire Next door cemented the fact that most live WELL below their means.

For me, money itself isn't a good long term motivator. I do like the art of business and doing well with integrity and serving the public. I also like the visions of how it can impact my families future. For instance, right now I'm saving to build our dream home. We own the land and plans already. I have learned to enjoy giving my money away to those in need. I believe it's important to help those that need it.

Take it from me -- YOU DO NOT NEED MONEY to be, or to act, democratically. I do it daily. If you DON'T have money -- then volunteer your time. Share your knowledge with others, it will lift others up. Doing what's RIGHT doesn't have to cost a dime.

No doubt, that's where it started for me. Now I do both. :thumbsup: It's fun to see the lives you impact. Especially if they don't know it was you.

AMEN! And doing it even when nobody is looking is a great way to live life.
:cheers: :flag2:

Its been pretty quiet lately, anyone have any updates?

It has been quiet -- I've been quiet..... and the MARKET has been absolutely ROARING..... just wow.

It's been such a WOW -- that it's making me nervous and I'm not the nervous type. I took my cash position back up to way over a million bucks today - from just a couple hundred thousand..... cleaned up some losses (sold 10,000 of the 35,000 shares I hold in ETP).... since the losses are far smaller, and with the stellar run the market has had - that's what allows you to do such things.

Now then --- we also know the rules of summer..... Sell in May and go away.... well ==== it's a proven fact that beginning about May people start to kind of forget about the market and prefer to go on vacation instead... and that usually creates a dip in the summer months. I wanted to be just ahead of any of that selling - given the recent run up of epic proportions (which means that maybe more people will be taking profits (selling) coming into the summer).... and Congress goes on summer vacation - so the Donald could run his mouth off a bit more than normal -- and the FED is hiking rates which will also cause some adjustments to folks portfolios. All good - because we actually NEED a big sell off. Markets don't go straight up.

NOW ----------- remember this! If you are talking about RETIREMENT accounts -- DON'T do anything.... let 'em ride..... and if you are happy with your current portfolio - DON'T do anything.... let 'em ride. I'm a fairly "active" money manager and have ginormous positions - so I have to adjust them regularly lest they get out of control.

How many of you market mavens have gotten so that you're not so itchy fingered anymore -- and actually have finally gotten a grip on buy and hold and collect the dividends???? Not nearly as scary as it used to be huh -- once you have some nice fat gains in your accounts. Now you'll see that when you have a 20 or 25 or 40% gain on your holdings -- you don't really care if the market goes down 10% --- but you will have had to have owned for a bit to get to this point. It's sweet once you do though!

I bought some GM today, partly because I work for them now, and the 4% dividend. Didn't think about the ex date at the time but went back and checked today, just happened to buy it on the ex date exactly, kinda nice.

Just so you know -- YOU WILL NOT GET THE DIVIDEND. There is at least a 3 day "settlement date" so you don't actually own the shares the minute you buy them - you must allow for the settlement time. Sorry to spoil your party.

Good to know, I never knew that. I didn't plan it that way anyway and we're only talking like $190, I don't buy in GW sized lots :lol: