Not to argue with you.... but you don't apparently understand the correlation of FED rates and the subsequent market rates that it affects.

A "quarter point" rise won't affect home sales could possibly be correct - except that real actual mortgage rates will go up MORE than that... and since the FED is talking about possibly raising rate FOUR TIMES this year - that would be ONE full point this year alone....

The FED FUNDS rate affects every single thing you do.... food prices - cost of doing business - cost of borrowing - credit card rates. What happens - eventually - your car payment goes up - your insurance costs go up - your food prices rise - and your mortgage payment rises. That creates INFLATION - which then causes businesses to have to increase their prices to cover the rising costs of everything they do... Rates are incredibly important.

This is exactly how my area feels.

It seems when things have been going well for quite some time I see these mindsets:

"I need to get in before it's too late."

"I need to get in because everybody else is doing it."

This can go against values and long term financial sense.

The more calculated will base decisions of facts and comfort levels. Rising rates may not deter the former in the short term, but it certainly could deter the latter.

I didn't want to copy and paste the whole article.....



https://www.cnbc.com/2018/02/28/pend...y-4-years.html

Greg, the great research authority that is CNBC is definitely doing a good job of trying to show how things are looking a lot like 2006. The house I bought in 2006 (in Arkansas, not CA) came with a 6% interest rate. It wasn't a bad deal, even though the one I have now is at 4%. As the mortgage bubble burst, rates went up, along with gas prices and everything else; Priuses were being bought above market, and dealers in the Midwest were literally giving away Dodges and Chryslers (if you bought one). Everything's a pattern that can be found in the past (as your experience has undoubtedly demonstrated), short of trying to track Goldman Sachs' trading algorithms . . .

It would be interesting to see the world with the crazy interest rates from the late 1970s/early '80s. The thing about that would be a completely different economy . . .:drowninga:

I couldn't disagree more --- what they --- and including my personal team of bankers and hedge fund managers are saying ---- is to "keep a heads up". We are speaking in this particular forum thread about INVESTING 102.... which is information relating to being relatively new at investing - the relationships - the things that can cause ups and downs. It's not an advanced econ class.... that would be a different thread.

This is not a pitch to buy or sell or do anything --- it's just an investing 102 "thought"....


I've owned Altria (MO) for a very long time.... the reason I own it is not for the "current" dividend (in other words - if you bought it today). I own it for the CONSTANT dividend increases this particular stock produces. A couple days ago - they announced an increase to .70 per quarter. Doesn't seem like much does it? A lousy .04 per quarter.... BUT --- big Butt --- that's a 6% increase! So if inflation is running 3% - you just doubled that amount.

Now -- if you calculate YOUR dividend - at the price YOU paid.... this begins to be a serious cash cow. It takes TIME to have a relatively low paying (<5% currently) dividend stock become a cash cow - and not all companies increase their dividend payout annually -- but god bless MO -- they just keep pumping out the cash. If you're young - and this is in your IRA/401 - and that dividend is plowed back in to buying more shares (DRIP) -- when you get ready to retire in 20 years.... yeah - that's a nice holding.

Had MO since I started in this thread several years ago. To elaborate more on your comment, I've seen the following yearly increases to the dividend:
2012: 7.32%
2013: 9.09%
2014: 8.33%
2015: 9.62%
2016: 7.02%
2017: 8.2%
2018: 6.06%

My current yield based on what I paid (and my drips): 6.96% :) Which translates from me getting 0.41 a share in 2012 to 0.70 now (well, soon). Nearly doubled!

I have a pretty nifty spreadsheet that tracks all this for my "investing 102" holdings thanks to all you guys. :hello:

That is how people make money folks!


Think about a 20 or 25 year run like that...... you start when you're 40 and retire at 65 and the dividends just keep taking care of you... for another 25 years.


Or you can buy Bitcoin and have someone steal it from you.... LOL
You guys see the latest heist? $530 MILLION from another brokerage....

So, speaking of which, WTH is CNBC showing a "bitcoin watch" window? Fascinating to them? just curious....

Trying to get Millenials to watch for ratings??? IDK

I just find it hilarious that every week I read another story about theft or hacking etc with this stuff..... it was supposed to be "so secure".... RIGHT! So secure they can steal hundreds of millions worth every other week.... a couple times this has even caused the "brokerages" to go out of business. Let me know how that works out.

I heard a radio ad this week urging homeowner's to take out a home equity line to buy the "bitcoin dip". I about lost control of my truck. :D

I heard the same ad, started a couple weeks ago. All I can do is shake my head. You know there’s a handful of people who will think that’s a great idea and give them a call. They’re walking an ever-narrowing line on making investment recommendations too....no good.

I stole this fair and square ---- but it is well defined investment strategy....

So much of this thread has been about buying not selling.... buying when the poo hits the fan vs selling every time you hear some talking head saying the sky is falling. Holding great companies (think in that way versus "stock") and collecting part of your profits (since you are an owner in that company). I read this and thought I needed to copy and paste it here.

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


Memorize this affirmation: "I am an investor; I am not a speculator."

All together now: "I am an investor; I am not a speculator."

As investors, we:

Buy stock in solid businesses. We expect to be rewarded over time through share price appreciation, dividends, or share repurchases.
Don't time the market. And we certainly don't speculate when we buy stocks. Speculation is what day traders do.
Focus on the value of the businesses we invest in. We try not to fixate on the day-to-day movements in stock prices.
Buy to hold. We buy stocks with the intention of holding them for the long haul.
Tune out the noise: Put down the newspaper, turn off CNBC, and opt out of those alerts on your phone. None of it is doing you any good.

Fixating on the market's minute-to-minute news won't help you make your next brilliant financial move. That chatter is mostly noise. And it's costing you a serious amount of sound sleep — and maybe even some actual money.

Spread out your risk with a solid asset-allocation plan.

You should be building a portfolio (or working toward it!) that includes a bunch of investments that don't always move in the same direction — bonds and stocks, for example. You need to diversify.

Putting an assortment of eggs in various baskets isn't the only way to spread your risk. You can also avoid the risk of investing in a company at exactly the wrong time. Say you're interested in buying shares of Scruffy's Chicken Shack but you just don't know when to pull the trigger.

The answer? Take a bunch of shots!

Practically speaking, you do this through dollar-cost averaging (this means accumulating shares in a stock over time by investing a certain dollar amount regularly) through up and down periods.

So every month for three months, you purchase $500 of Scruffy stock, regardless of the stock price. The beauty of this system is that when the stock slumps, you're buying more, and when it's pricier, you're buying less.

"Buying in thirds" is another way to average into an investment: Simply divide the total dollar amount you want to devote to a particular investment by three, and pick three different points in time to add to your position.

Stay strong, think long!

that is a great summary. :thumbsup:

I'm really not happy with the new Google Finance layout. What other sites are people using to see there stocks performance and get news about the stock at the same time? You know, how google finance used to be, lol.

Thanks

Couldn't agree more Trey! Google managed to make a mess out of what was something decent. It's even worse on "mobile" platforms where you can only get percentage increase or decrease vs actual move in $$ and cents.

Someone asked me today if I saw the market drop as a buying opportunity.

Nobody really knows do they. Wish I had a crystal ball - but I don't - nor do the talking heads on TV.


Here's my PERSONAL view --

#1 - I was in the hospital today (Mayo Clinic) getting another procedure done so wasn't around to see what was going on.

#2 - I raised a pile of cash a week ago. I had sold all the high fliers I'd been buying (because they've been the only thing truly working for months now) - I'm talking about Salesforce (CRM) - Splunk (SPLK) - Alibaba (BABA) - Boeing (BA) - Nucor (NUE) - and I sold most of my Amazon (AMZN) and kept 200 shares that I have an average cost of under $1,000 a share.

#3 - Why? Because we have a whacko political scene (don't take this as an invite to discuss politics or as my view on politics - it's not) - we have the tariff talks (now action) - we have rising interest rates and I wanted to be ahead of a surprise FED move - and mostly because the market has acted as if it was looking for ANY reason to sell vs buy.

This is INVESTING 102 -- it's not a thread called "trader talk" - I don't discuss what I'm doing, or not doing, personally unless it's used as an example here. I get many trades wrong - I get a lot right.... and what I'm doing is not what someone else should be doing.

+++++++++ HERE'S THE REASON I'M POSTING TODAY +++++++++++



I want to remind you -- as INVESTORS -- as share prices come down --- the DIVIDEND YIELD goes up as a percentage. Stocks are just like BONDS - bond prices fall the yield rises. Bond / share prices rise - the percentage of yield falls.

So ---------- we are in a rising rate market - yet share prices have gone thru the roof -- making YIELDS hard to find. As the market sells off --- all of a sudden some stock you'd like to have invested in - but felt the yield was too low and the price too high --- HEY!!! That bad boy might be falling right in your lap!

Don't RUN from the market during selloffs --- rather --- keep some powder dry -- don't rush in and buy everything you ever wanted. WAIT to see what happens -- chip away at what you've been watching/waiting to buy because we don't know if the market goes right back up - or we get a downturn that lasts for months (we are heading in to summer in a couple months - Sell in May and Go away) and add up all the other pressures or headwinds the market can run into...

Remember your timeline ----- those who ran to sell at losses back in '08 and '09 and then watched as the market roared right back with HUGE gains (they sold too soon and at the bottom -- then waited to be absolutely sure the market wasn't going to bite them again - and thus bought at the top - or after the market had run 25 or 40%). If you have 10 or 20 years -- remember that. If you put money in the market that you planned to buy a house with next week --- yeah --- well that was just dumb to begin with.

As "market" rates rise -- stocks fall to make their rates attractive. Nobody is going to buy an "expensive" stock that pays 2% dividend -- when they could get 3% interest in something else --- so it's a natural phenomenon that money moves around to find the yield that's attractive. It's the way money works -- it's always worked the same -- it will never change. Recognize it - know it - understand it.

I got a little buying done yesterday morning. Anyone else?

I'm at the highest cash reserve that I've been at in about 4 years (2.4MM). I'm not buying anything until I see this market settle down. It's just too hard....

Same here, highest I've been in cash since I started investing... this article makes me think the market is in the first stage of grief... "Denial":

https://www.cnbc.com/2018/03/27/gold...elieve-it.html

I'm at the lowest cash reserves I have been at in years..... cars, kids, bla bla bla bla

:hitaxeonthehead:

I just reallocated some funds from some sells not long ago, I am still sitting on enough cash to fund many years of retirement as well.

I did some major selling of my IRA holdings yesterday. Now that I am retired I don’t have the stomach for this market.

Don

Interesting observations from last couple of days... While the DOW seems to be treading water or even down...everything on my board is green, WAY green...

Dow is down a half a point this morning and my IRA is up almost a full point.

Yes --- interesting "rotation" (not the car arse end this time) showing up in my accounts as well --- Tech getting its arse handed to it (it should have - it's run too far too fast) -- and the stuff that hadn't been working (dividend shares) are having nice gains.

Meaning -- the cash has to go somewhere -- it tends to hide in dividend shares when the speculation (hot stocks) becomes scary.

Ain't that the truth!!!

Cheers Mike. :) :cheers:

Cramer. "Nobody ever made a dime panicking".

first time i heard this quote, but learned it here first.

Long term (not timing the market, its time in the market)

Pay attention (don't invest and forget, i've done this much in my past and to some extent, still do)

Minimize personal overhead, think dividend income (read withdraw) much later.

Just had my cruddiest quarter (at my company) in 7 years. Things are on the up now, but beware, be savvy.

Learned alot on this thread, these are just a few words of encouragement from a 51 year old "newb", never stop learning.....

"as society regress's forward..."

If you look at just my balance, all of my gains from 2017 have been wiped out thus far. Not worried though. I'm in good names and will be buying more soon. Heck, I remember thinking a year ago that I wish I had bought more when prices were lower on a number of my stocks. Well, now they are, lol.

Trey, how many (individual stocks) do you hold right now? managing.

Heard an interesting thing from Cramer today, he said he did the best when he went down to holding less stocks but best of breed, realizing that those were his money makers. Hmmm, where'd we hear that before????

I've got six best of breeds, adding as cash flow increases. Weirdly, my 401K , Roth, and a few Vanguards and T-Rowes are doing(did) pretty well.

Hate to say it, i'm up 54% on McD's, bought it cause "wifey worked there" and she wanted my to get it. She's my lucky charm, i wish a wife like that on everybody, shes a rock star.

In the account that I manage, there are 9 stocks I do anything with. I have 13 total in that account though. 2 are gambles, 1 was given to me as the company split, and the fourth is my ESPP from my days at Haliburton. I don't touch it because I'm so overweight in it compared to the rest. I include all of them in my comment though. From the beginning of me starting this account, I'm still way up. It's just my gains from 2017 that went bubye now.

I don't bother to add more names because I have enough to watch as it is. I also have two other accounts that are managed by professionals mainly. I consider myself to be very diversified.

Funny what a few days can do. I've already recovered 50% of what I've "lost". No I don't think this is the end of it. Point is, relax and let it play out a bit before freaking out. It goes up and down always.

Consumable\retail companies taking a beating today... PG, MO, PM all way down. Such a strange market...

My buy itchy trigger finger is poised but may employ restraint and wait it out a couple days. Sure looks like a few good buys right now though.

Hey guys, I have a question, or more of a, "what do you think is best" question.

I am not a market investor, I've always been more comfortable with property, so please forgive any ignorance.

I have one property that generates roughly 70K a year in leases, but can sell for 800-900K right now. I think I am better off selling the property and then investing the money with an advisor (never used one). Even if I get a 10-12% return, it's still more than the property generates in leases. Just trying to weigh this out and figure it. I have my properties under a separate LLC, so not sure how that works investing as a company?

I'm not sure how to move your LLC's assets into some sort of fund or equities investment, but generally, I would never hold an real estate asset that could not bring in 1% of it's current value as rent per month; unless I was going to invest more money into to get that rate of return, OR was going to flip it. The liabilities and opportunity costs are too high. So I think selling it is the right thing to do.

As for your investments, be wary before putting it with an adviser. Know the fees... load fees, back end fees, expense ratios. You can't control the market, but you can control fees. Know that the difference over a couple decades between .01% expense ratios and 1% Expense Ratios can be 40%!

My philosophy has always been to do the index fund thing, ignore it, and let it grow. Day trading has always seemed like gambling to me, as I rarely have information that isn't already priced into the market.

The depreciation and capital gains taxes could make a 1031 exchange into a better investment property the way to go.

I'm with him, I would be hesitant to put it with an advisor. I also like an index fund for low fees and set it and forget it. Simple is good.

Personally, if I sold it, I would sit on the sidelines for a bit and see what happens. It sure feels like a climax is coming to me. Between personal debt exceeding bust times and the crazy and stupid crap I'm seeing in our real estate market, I wouldn't leap, I'd crawl into another avenue.

I definitely agree with Todd that it seems we are waaay closer to the next downturn in equities than most are acknowledging. Just look at the crazy level of auto loan debt our country has gotten themselves into. However, by the rules of investing 102, you don’t want to sit entirely in cash wanting to time the market. But I’d suggest rolling in slowly and keep cash on hand to buy during/after the inevitable decline.

I need to be very careful here because of my level of Cancer meds on board.... but here's a couple thoughts having just gone thru this type of "review".

Property (actually all investments) really needs to be looked at with a view toward two things ---- Diversity of investments ---- Tax situation.

Real returns are based on individual situations and should only be calculated with an accounts input because he'll have important feedback on how the investment affects your total tax bill etc.

So --- Here's my thing on Real Estate..... it IS NOT a hedge against market moves. Typically the real estate market will suck right alongside the stock market if the market sucks. It is NOT LIQUID which is the #1 negative to me IF a guy doesn't have a bunch of other liquidity he can touch if needed. It is generally a great buy and hold investment.... and I think everyone should try to reach a point in their investments that they get to hold commercial real estate.

Some real estate investors are ill equipped to hold a property thru a long term recession when the property goes negative cash flow.... and of course --- that negative cash flow is what triggers the "I should sell" brain waves... and commercial real estate is valved based on it's POSITIVE cash generation over time. Guess what it's worth when you're feeding the SOB every month....

Now -- back up here somewhere is a post about an apartment complex we have that's up for sale. I pushed for the sale because of the current math.... the property is worth double... the income is fixed.... it's a nice return of capital in a pigs get fats and hogs get slaughtered kind of real estate market IMHO.

I appreciate everyones responses and advice. This is why I've never been a market investor, just so damn confusing with fees, etc...

I have a few commercial and residential properties (I know Greg hates residential!) and fortunately all paid for; taxes and insurance only, and I can sustain that even if left empty. This one properties value is high right now, so when I base my rent to value, it falls short and could be considered under performing.

I have friends that invest and keep telling me the market would return 10-12% and effectively double my principal investment in 7 years? My thinking is that the property returns less than 10%, and doubtful it will double in value in ten years. My principal market investment should continue to return more as the return is added to the principal and increase the investment? I don't know, that's why I'm asking you guys that are a whole lot smarter about this than me! Again, I appreciate everyones advice and opinions, lots of food for thought.