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I just don't get it, so i don't invest in it..Sure as it went to the moon, I was wondering about netflicks, but never bought, i could not see it in 10 years, and since i am not in and out, i just stayed out of that, and went with longer term assets.. |
It's why it's called INVESTING -- not GAMBLING.
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This is "investing 102"..... <smiling here>
Altria (MO) is a nasty old "terbacky" company.... I don't smoke -- but the world smokes - china - asia in general - europe... they're all puffers.... I'm using this as an EXAMPLE of why I don't care about the "exogenous" events I was talking about in an earlier post today.... At what point did all the worlds PROBLEMS ( -- (Greek debt - Chinas inflation - USA debt etc - oil too high - oil too low - Iran's idiots rattling their sabers....)affect MY investment??? Total Return 1 Year +24.7% 3 Year +102.5% 5 Year +91.5% |
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Well Done... :hail: That is why I am here...:thumbsup: To learn more than to share... Again I have skills, but I am a Newbie... And sometimes it shows.. Again I am Investing, and I am coming to find that I am speculating too... And sometimes although I have done good, I could have done GREAT. a wee bit of tail chasing:willy: So back to school I go... :cheers: :lateral: |
Pretty amazing huh?? I mean -- all the noise that's on the news -- the world is exploding -- the employment rate has gone crazy - houses are worth ZERO and here's Altria -- UP 91%
:woot: :cheers: |
After buying five dividend stocks in the last couple weeks I glanced (kid duty and late) at the Dow this morning and had a tiny newbie panic attack. Just checked my positions on the 100 block purchases and it's insignificant dollar amount compared to their average 5.1% dividend yield. :woot:
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It is not about the balance, but the income stream, or for some , the re-invested dividend that will grow over time.. Seig... Great point... That is the noise we should not listen too... they are like weathermen...they spend the whole damn day talking about up or down, or sideways... They beat the poor horse until he says stop it... So you are track when you tune out the noise and don't worry about the bouncing ball.. Saw the day coming, everything down but treasuries, and no big deal... Just another day. But I am looking to adjust my strategies... Doing good is not doing Great, and i am looking to improve my skills and returns..:lateral: |
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Then I had another panic attack when I checked my last filled order and noticed I forgot to check reinvest dividend. :D That's a historic paradigm shift for this kid. :thumbsup: :lateral: |
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This is when -- I've said time after time -- after you buy and then when they're down and you're starting to second guess yourself -- go back and just revisit WHY you bought. Look at the 5 or 10 year chart -- check the 5 year total return - check that dividend percentage.... then INHALE and relax... If you did your homework -- and it's a name you know and understand and all those other things are correct... that's the best you can do. Ya bought LAST WEEK -- the little man said take it down - let's test Sieg's guts! Go back and look at the LONG TERM CHART.... low on the left high on the right? Is that time period a week? An hour? Or 5 YEARS. Relax.:cheers: |
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My phrase to my wife has been, "they are shaking the trees really hard, seeing who will be strong and hang on".. That was during the mid year craziness. Those 400 to 500 point runs in 2011 will happen in 2012. stay the course.. The Trees will get shaken hard...now I know that there is a little man that we hate, doing the shaking... I was telling my wife, I try to be like the Character Mel Gibson played in "We were soldiers ".. During the chaos, he just stands there calm as can be , as bullets wiss by, and he see's the problems, or what needs to be done, or not done, and Just calmly does it... I love it...I try to be that calm guy in a crisis of any kind.. Even the market roller coaster.. At the end of a cycle, things are good... I fugetaboutit moment to moment.. |
So my personal trainer comes on Monday AM's --- and he tried to sweat out the Double Double and the Chocolate shake I had for Friday nights dinner..... 10 seconds after he left I was in the hot tub contemplating life... and came up with this analogy:
4 guys are playing a round of golf.... I'm on the tee -- and the usual banter (noise) starts.... We bet $1 per hole -- and $100 for the game... A buddy says - "he can hit the hell out of the ball when he's on -- or it's 15 yards into the woods" Another buddy... "that trap is out 250 yards - ya gotta drive that or lay up" They're now in my head.... Do I try to pound the driver and punch it 275 on the carry -- or do I hit the 3 wood and lay up short of the traps.... Here's MY THOUGHT PROCESS..... I know to win the hole I "should" punch it past the trap... but I also know if my game isn't spot on - I tend to slice when I swing too hard... (gambling or risk taking!). I also know if I swing nicely and just lay up a 3 wood I'll be right down the middle and have an easy 8 iron to the green.... A nice 8 iron on the green - a two put and I par and win the hole. My Steady Eddy game! This goes on for 18 holes (18 stocks).... I can try to kill it -- OR I can swing easy - play the game - ignore the ribbing (noise).... and MAYBE I can win 10 of the 18 holes AND the GAME ---- netting me $110 I could have tried to pound the ball and win all 18 holes and the game.... but then I might have sliced into the water and the woods -- and had a couple snowmen and a couple "double holes in one" (1 plus 1 ='s an 11 ---- LOL) and only won 7 holes and lost the game. |
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When I got to the "using a 3 wood, and laying up before the traps", my gut said, "that is the answer"... Without even a breath, or second thought...:thumbsup: I know I am somewhat on the right track..:cheers: |
G-Dub - For a guy that doesn't play much you have a pretty good grasp on the concept. You sand-bagging me? :unibrow:
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Sadly -- it was all metaphors! What I "know" - does not necessarily translate to the actual play. :willy: |
A thought occurred to me this morning as I was shopping for some corporate bonds - that maybe people really don't understand the difference between Muni bonds - corporate bonds - and stocks and how it affects your taxes.
So here we go: Stocks: You're investing in the company - so think of it as you're becoming an owner. Some stocks share their profits with the owners in the form of a dividend. QUALIFIED DIVIDENDS (please note that term - it's important) are currently taxed at a maximum rate of 15% Corporate Bonds: These are basically a corporation BORROWING money at a rate they state - and a maturity date they state. Example - Goldman Sachs (GS) issued bonds recently paying 5.75% with a maturity date of 1/2022 -- so it's a 10 year bond @ 5.75%. When you buy these -- you are a LENDER - and as such you collect INTEREST - Interest is taxed at your ordinary tax rate. These should be bought inside your IRA/ROTH/401 unless you're living off the income and are willing to pay ordinary income tax on the earnings (as I do). MUNI BONDS: Short for MUNICIPAL BONDS. These are issued by County - State - City - School Districts etc. They are - IN MOST CASES - tax free. As such the interest rate is lower. You are a lender to that entity - you collect interest payments (generally every 6 months). The bonds have a face value and a maturity date. You'll get the interest until the maturity date at which time you'll get your capital back. They're backed by the "full faith and credit of the issuing entity"... in other words - some form of government - this is why they're considered "safe". |
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Okay -- so STEP TWO of this is to explain how these "work".
Stocks go up and down depending on how many people want to BUY vs how many people want to SELL... Corporate BONDS and MUNI BONDS pay a fixed rate - so to the BORROWER - they're paying the issued rate - let's just use 10%. If you bought a 1,000 bond paying 10% and you bought at PAR... then you paid 1,000 and you're going to get 10% interest. But lets say interest rates are RISING..... and the "market" is at 12% -- your bond is going to have to be DISCOUNTED until the yield is equal to 12%. Remember - the borrower is only paying 10%.... so if you want to sell your 10% bond -- the new buyer needs to pay you less in order to "yield" the currently higher market rate of 12%. If you held your bond to maturity - you're going to just get your 10% and then get all your money back. But if you chose to sell it in a rising interest rate market - you'd lose money. The REVERSE is true in a falling interest rate environment. If market rates fell to 5% - you're bond might be worth TWICE as much as you paid! Remember that bonds have MATURITY DATES -- it's the combination of what that date is - sooner or later - and the rate it pays - that determines it's "price" (value) on any given day. |
Hi Greg
Thanks again for all the info. I have a rookie question for you that may have covered already. When you talk about the interest on a corporate bond of 10% it is paid annually correct? And then you get your initial investment back on the maturity date? And is this the same for Muni bonds? On a side note I have a mutual bond story when I was 21 I had 18k invested in a tax free account. I am now 38 that mutual bond is now worth 21k and some change. That is why I have stayed away from the stock market; I figured if the “pro” heading up the mutual fund can’t get it right what hope do I have. Ray |
I wish we had a "crying" icon --- I'd start with that for you....
Corporates and Munis generally pay interest every 6 months... and YES -- on the maturity date (or before) you get your capital back. When I say "BEFORE" - most bonds are "callable"... so at some date the issuer can "call" your bond and cash you out. Sort of like if you re-fi your house - you pay off the high interest note and re-fi it with a lower interest. I've had bonds called away before. A couple times -- they've paid more than the face value... but then you give up your high interest rate and now have to buy something else that's paying the current lower rate... but that's the way these things work. Mutual Funds equal a jackass throwing darts at a dart board.... it takes hardly any work to beat their performance - because you can AIM -- and they just buy "stuff" that fits their predetermined scope... There are good ones -- but most are just so friggn' ho hum that they do more harm than good. By the way - you state your MF was in a "tax free account".... by that I think you mean that it is in a TAX DEFERRED account such as an IRA/401? These accounts have no taxes due UNTIL you start to withdraw... Quote:
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Imnop -----
Had you just put all your money into COKE (KO) == not the kind you push up your nose.... just FIVE YEARS AGO -- you'd have a 63% return... so you'd have around 30 grand now -- and that's if you'd have just done this 5 lousy years ago. 17 years ago - KO traded at $20 a share - and it split two for 1 in 1996... so you'd have TWICE as many shares and it's now trading at $60 So 18 grand (900 shares) - 17 years ago you would now own 1800 shares of KO worth $108,000 |
Hey Greg
Thanks for the reply and the sympathy. You are right it is a tax differed account; although it has made so little money the tax is not a consideration. I read a couple of books about saving/investing when I was in my late teens and one mentioned if you save $1000 a year from age 20 to 40 and then stopped you would be way ahead rather than saving double the amount from age 40 to 60 or something like that. So I figured I would get ahead of the game and save $20k by age 20. I was a mechanic working in a mine and I saved money pretty quick. Every time I put money in the fund seemed to drop but I wasn’t worried as I believed in the long term magic I read about. Well I am still waiting for the magic. I have been jaded towards investing ever since. I felt like I did everything right and it didn’t pay off. Thanks to this thread I feel inspired to take another look at it. At minimum I need to re-invest and get rid of the useless mutual fund. Ray |
Sieg ---
Compare TransCanada Corp (TRP) to Calumet Specialty Partners (CLMT).... do a 5 year chart -- and you'll see what I was saying to you via PM. To include "others" here as an Investing 102 "thought process" -- as I recommend nothing - only how I look at things... CLMT -- is in the "oil chemicals biz" -- and TRP is a canadian pipeline (the one that's been in the news lately)... and what I was saying is that while CLMT pays a very high dividend (9%+) --- it has a terrible 5 year chart. When I say "terrible" -- what I see is -- they went down with the "market" in the 07/08 "great recession"..... but they DID NOT come "back" with the market (09 to present).... One of the "nice chart" things I want to see is whether or not a company was down with the market and are they also UP with the market... but if they went down and stayed down -- that's not a good sign, therefore not something I want to own. That -- and this is not a business I understand nor do I understand their competitors etc. So PERSONALLY I wouldn't take the big dividend as a "good thing"... rather, it would scare me. Remember -- pigs get fat - hogs get slaughtered. I want the good chart - with the growth - AND - the good/decent/nice/healthy dividend. Dividend % is only ONE COMPONENT.... if you get a big dividend but the stock goes down 40%... that's not a good combo. If you get a decent dividend and some growth (8/9/10% + per year) now you're making money! You want GROWTH in your money -- TOTAL RETURN -- That is the key.... you can get that in different combinations of dividends and growth of capital. Big growth - small dividend -- big dividend with steady eddy growth -- or decent dividend and decent growth... the key is to try to find some balance... and there's just too many companies out there that will give you these - without "settling" for something that lacks all the magic numbers. We need to be firing on all cylinders! |
Ray -- # 1 congratulations on doing HALF your job... the savings early part! But you slacker :D -- you then promptly ignored MAKING YOUR MONEY WORK FOR YOU. No days off -- no sick pay... You need to pay a bit of attention to your money or they (I pretend every dollar is one employee!) walk off the job when you're not looking.
This is not to say you start to become a micro manager! It means that you need to pay attention and if you're guys are slacking - you need to do a bit of work yourself and see if you can't' get some of those guys "retrained" or "redeployed". Go back and read from page one -- that's your homework assignment... and see if you can get reengaged and make that dream come back to life! It's not too late. :lateral: :cheers: :woot: Quote:
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Makes good sense to me :thumbsup: :thumbsup: :thumbsup:
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Dividends
So I just thought I would share something to motivate the crowd...
One of my things is to see how things are going with my money over coffee. The Total balance does not really matter, although we all want it to be going up..It always does, but sometimes it takes large Temporary hits. But I just love when i wake up before dawn to make coffee, and when i check the account activity, A bunch of my assets have deposited Dividends into my account overnight as I slept... It all gets reinvested.. But a bunch of money, as i slept... But first you must manage your money, i.e. credit debt and consumer debt, save the money to put to work, i.e. live within your means, work smart and hard, and some sacrifice and boring unflashyness, i. e. no new car loan every 3 years to look cool. Then the money that you put to work, is really working for you....While you sleep.. I used to dream of this as a kid believe it or not...Success was on my mind at an early age.. Life, a drug addiction, and a divorce, threw me off my game for years, but i always turned the boat into the wind and at an angle over the waves in the storm.. And now words like portfolio, net worth, money management/budgeting, dividends, yield, ROI, disposable income, and passive income, i.e. the overnight dividends, are always on my mind.. Because the wolf is always at the door... I appreciate all the insight Greg and others share. I will do my part to share without straying from the CORE of the thread. Investing 102.. Mike V :cheers: :lateral: |
I was channel surfing last night, and wound up watching Cramer...he was interviewing a board member of Dominion (D), an energy production & distribution company. The two talked a lot about providing energy for the exponentially growing data center industry. Cramer wrapped up the segment with "this is the energy provider to own."
Greg, looking at the 10 year (+66%) and Dividend (4.22%), something that would get your blessing? |
Thanks to Greg and some of the other knowledgeable guys, I'm meeting with Chuck tomorrow to get into the game!:thumbsup:
Time to get these slacker employees I have in savings to back to work:lol: |
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Time, and the right moves, will over time, blow your mind... Yes the wrong moves suck, but you can minimize the losses with the right strategy and funds that are strong tested long term assets as Greg mentions.. I have 10 % of my money in a company 401K just because they match 10% , and i take the free money by matching it.. But 90% of it , is in a Schwab account that is not controlled by the 401K people...Much better deal for me anyways. But as Greg mentioned before, TAXES, and each person's DIFFERENT situation, means more homework to come up with an indivdualized plan... But I am 52...For those much younger....You want to be as Fortunate as Greg ??? Start early and get passionate.. OMG...I just sounded like ,Tommy Vu...:cheers: :lateral: |
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Yeah buddy:woot: -- ya got GROWTH and a very nice dividend... I don't own this one - I own Con Edison (ED) and this is like the "COKE VS PEPSI" debate -- own either one or both... Good for you watching and listening and then DOING YOUR HOMEWORK.:thumbsup: Think about these "utilities".... everybody has to pay their power bill every month... buy the best of breed and kick back. They bring stability to your account -- a nice dividend and decent growth... all the things we're looking for. |
For any Fidelity 401k people that want to avoid mutual funds, see if you are able to sign up for Brokeragelink and put your investments into that. Brokeragelink allows you to invest in the market like any other account and not be stuck with the mutual funds allowed by your plan.
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I hope RAY chimes in here --- I'd love to know what Mutual Fund he was in just so I could check it out - and that he doesn't take my "slacker" comment as a personal attack -- it was meant to be funny - like guys hanging out in the shop... busting each others chops. I really do think of my money as one dollar is one employee... My job is to manage my employees. They don't need to be super stars - they just need to be always doing the best job for me that they can. And I have different "divisions" for them to work in. The "accountants" are boring steady eddy guys - Then there's the sales team (higher risk) - etc. Some times I have to just flat fire some of them.... and some times some of them need "re-training" (rebalancing)... |
Along the lines that Solar was mentioning -- since it's the first of the month -- I wake up to some TAX FREE MUNI payments... So let me explain a little bit about this --- Tax free bonds pay all 'over the place' -- so when you have a bunch of them you're always getting "something" generally around the 1st or the 15th of the month. There are TWO periods in the year when I get really really nice payments --- June and December... the rest of the time it amounts to a few thousand per month.. but June and December is a happy place. :rofl:
Dividends will pay like this as well.... you go along and nothing - more nothing and then BAM! In they come. The more stocks you own - the more spread out they become. Different "quarters" - different pay dates - different "EX" dates. But once the STREAM starts (takes at least 6 months) then it seems you're getting something all the time. I've got a sizable amount of shares (25,000) in Annaly Capital Management (NLY) and January 26th I got a dividend of $14,250. I mention this because this is what you're after.... Think about that -- I get that 4 times a year. I don't care who you are - that's like free money! :D Here's the INTEREST (TAX FREE) I got just today (being the 1st). 02/01/12 Cash DIVIDEND RECEIVED AMEREN ILL CO PFD 4.92% AILLM $738.00 USD 02/01/12 Cash MUNI EXEMPT INT WALLA WALLA WASH WTR & WASTEWTR REV REF 03.87500% 08/01/2017 BDS SER. 2005 932238BY3 $968.75 USD 02/01/12 Cash DIVIDEND RECEIVED WASHINGTON GAS LT CO PFD $4.80 WGLCO $690.00 USD 02/01/12 Cash DIVIDEND RECEIVED WISCONSIN PUB SVC CP PFD 5% WIPSO $693.75 USD |
So to continue on that line of thinking -- and remember -- I'm sharing personal information here because I want those of you that haven't gotten a taste for what savings can do for you -- I want you to SEE... this is REAL... and that you too can do this!
Here's a ETF (exchange traded fund - so similar to a mutual fund) that holds high yielding CORPORATE bonds. This pays MONTHLY... and I use it to "park" cash - so it goes up and down - and obviously so do the dividends. But think abut this if you're retired and you're getting these dividends every month... so let's see if I can "copy and past" from Schwab... Look at the dates and see that this bad boy (this is not recommending it for ANYONE - this is just ONE example) pays way better than a slot machine. :faint: THIS IS THE POWER OF DIVIDENDS! That's what I'm trying to show you here. 01/04/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: CASH DIV $1,871.51 12/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $1,921.54 11/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $1,841.88 10/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $1,883.93 09/08/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $1,971.75 06/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $3,394.24 05/06/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $2,291.79 04/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $2,278.48 03/07/2011 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP type: ORD DIV - CASH $1,157.45 |
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Also I took the "slacker" comment as it was intended, I enjoy the casual feel to this thread I feel like I am hanging out with buddies in the shop. Thanks Greg! |
Don't feel bad Ray, I'm negligent too and we're not alone. That's the beauty of this thread, it is motivating people to take action and make changes and there not in the brokers best interest.............there in ours! :thumbsup:
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Good to hear Ray! Personally -- I'd divide the 21K into 8 to 10 different stocks... and if you want help picking -- then post what you're thinking up here and we'll roll 'em around. With this amount you can get some diversity with sectors and have just a bit of higher risk in order to boost your overall return... balancing out some of the safer lower dividend payers.... but with 20K invested - you should be able to MAKE over $1000 per year... and reinvested -- in 5 years you're going to have capital growth AND more shares paying more dividends and you'll be making the snowball into a snowman! IF you want to, that is. :cheers: |
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I use JNK and HYG and NLY as my 'balance' in one stock account to bring the overall dividend payout UP... from the lower payouts of the Coke and JNJ etc. BUT --- Don't mistake that for being greedy -- they are VERY SMALL percentages of my overall invested dollars --- and I have a quite healthy MUNI BOND portfolio that is "super safe"... But also major boring and notoriously low yield. Remember -- MUNI BONDS like that are bought for blue haired old ladies (me) and have an income stream that is tax free -- but for that safety and yield -- you'll GET ZERO GROWTH in your capital! I can "trade them" -- every one of mine has a face value above where I bought them -- but then that's not why I bought them. I bought them to have a safe income stream that is tax free... so that's what I'll stick to. |
Just hired another bunch of Employees and have contracted to add the same number every month going forward. Bastards better work!!!
I just had a meeting with my guy , transfered all the wifes -2% return last year to my guy who gave me 20.7% last year. actually he said i had the 4th highest performing account at their firm last year obviously as a precentage not cold hard bucks. to bad there wasn't millions in the account. My compound anual return since 2001 has been 10.5% and the total return from 2001 has been 176% so I don't think I will change much lol |
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