Figure out how you can best leverage your current situation. I gave away my first house and more in a divorce and it was a major setback but one you can definitely overcome. :thumbsup:

Pep talks anytime.. Also do what is best for you and your family...

:cheers:

We bought a 3 bedroom condo in Tempe for our son to live in while at ASU -- figured "why pay rent for 4 years" -- we should be able to get a couple roommates and sell this place for what we paid for it and at least break even...

WRONG -- #1 the girlfriend moved in for the 'summer' between sophomore and junior year - and never left - so NO RENT -- good news is his GPA went up a full point so we figured it was worth it! :willy: :woot:

He graduates and Adrienne transfers down there to the warmth.... okay now we have another 3 years before we need to sell the dump... WRONG she moves out to a house with AJ (boyfriend).... so I just spent 10 grand on rehab to get it pristine and ready to sell... for ----- Drum roll -----

100K if I'm lucky --- on a 307K purchase price.

We own it outright -- so it's just a loss pure and simple. Oh well.... :mad: But even if we had a mortgage -- I'd just be making the payments and sucking up the loss.... because that is the RIGHT THING TO DO. I bought it - I own it - it is what it is.

Anyone need a beautiful 3 bedroom - 2 full garage - condo in Tempe? :D Just off the 101 on E. Broadway. I'm going to list it with Bob Reams wife Bev who is an agent there. He owns Imagine Injection where I get all my stuff from... a super - better than super - guy.

While it's not the type of stock "I" would buy -- because I tend to go for large national well known stocks in industries that I know and understand -- that doesn't mean there aren't compelling stocks out there that should be ignored. If I had a park here that I knew about and or all my friends were going to etc -- then I'd be more likely to "understand and know" their business.

I subscribe to Seeking Alpha --- and today they have a piece about Cedar Fair (FUN)... so here's a link.


Note please -- the author owns the shares -- and when I see that... I perk up because is the article written with a self interest? Or... I'm not saying this to sling arrows -- I'm saying this as "investing 102" -- pay attention to the little things like this and then go google or bing or whatever and do MORE research.

http://seekingalpha.com/article/3401...g_income&ifp=0

Ouch.. But thanks for sharing..

I have the Sister in law...I gave a car to...Wasn't good enough...i gave them a subscription to Kiplinger's....Waste of Time...

They trade the car for a car with payments... They go to Europe.....The Son Buys a BMW.....THEY WALK AWAY FROM THEIR HOUSE.....

Then they ask me to co sign on something...LOL... Never, ever...

They are bouncing from rental to rental.....Talking about Europe again...

WTF... I have given up.. No advise, no help. They play the Guilt card..."what do we do, live in the street ?".

Stop buying all the toys,and cras, and private schools for your kids...And maybe some of them should get a Job.

My wife and I over coffee this morning were talking about it, so we can get it out , and move on with our Day. Other family have Investments and wait for it......MAXED out Credit Cards ???

They know not to come to me for money ever again... In fact they are dreaming of Inheritances that they may never get...i know some wish me dead...No lie..Straw that broke this rich camel..

Little do they know , I was at my Trust attorney for a unscheduled meeting yesterday...I have had enough. i am about to cahnge my Trust to give more to the no kill shelters.

Sorry for the Ranting 102:willy: :wow: :cheers: My wife and I have anger issues today.. The entitlement train has come to a Stop... I am conducting this Train, and they really made me mad now..

Greg,

Why not rent it and play landlord for a while? Just curious...

Darren

The "market" has me thinking today -- and I thought about this thread vs the market and what people have done since say -- December. I want to reiterate that the way this market is going -- everyone is feeling pretty good... we're doing two steps forward and only one step back -- so the "gains" have been hot to say the least.

What I want people to remember is that this isn't "normal". We have outsized gains since the first of the year... and while I love this type of market -- don't get yourselves into a complacent position like we did our housing market - where it just went up and up and everyone was "loving life" and feeling invincible.

When - not if - the market turns against us for some period of time - those dividends keep on paying out... and it's those dividends that will hold you over until a down market turns up again. I'm not predicting a move - I don't think like that - I don't play the "I better take my gains and run" game... that's a losing game - that's "market timing" and trust me - you'll lose that game. What you want to really do - if possible - is to scale into your positions - build some more powder up (cash) and be on the sidelines ready to pick away at your favorite positions. Also remember that when the share price goes down -- your dividend payment will buy MORE shares... and then when the market comes back -- you have a larger gain % wise.

Great question -- and I hope I don't come off as sounding arrogant or like a smart ass with my response.

#1 -- I don't need the money so I'm okay taking the capital hit.

#2 -- I live in Seattle - this place is a zillion miles away in Phoenix

#3 -- Running the numbers - the rent is $1250 (other 3 bdrms there) so after I pay $250 month HOA - Insurance - Property taxes etc - Utilities etc... my net might be $700 a month or less. Less if I hire a "professional" property manager cause they take their share. $700 a month to me is about like most people picking up a dollar... it just isn't the kind of money I think about.

Now -- IF I had a mortgage - and needed to cover "most" of it -- and didn't want to ruin my credit by walking away (or doing the morally correct thing of actually paying my bills)... then that would be one thing... and especially if I thought the market might come back within the next 3 to 5 years. Remember that the market would have to TRIPLE for me to get my money to break even - and then if you calculate time money line -- I'd own the dump for 10 years and still probably take a capital loss.

If I sell it for 100K --- net -- I can invest that and MAKE 5K per year tax free in Muni bonds and have absolutely no worries or hassles.... like when the renter fails to pay or pays late - or goes bankrupt and it takes me 6 months to evict - or runs off after trashing the place.... and it costs me everything I "made" for the year plus to rehab it (again).

So for me -- I'm not in a positon to have to cover my arse... I'm in a position to just be able to make decisions on what I "want to do" not what I should or could do.

It's why our boat was called "Options".... everyone thought I was a stock trader -- but it was really because the boat was just another "option" for how we wanted to spend our time. :lol: If I was a trader - and the boat named Options -- I'd have named the dingy 'Puts and Calls". :rofl:

I check into this thread from time to time. I think it's a great one and glad it has legs.

I just want to comment quickly that I completely disagree on the matter of strategic default. I have encouraged several friends to do it in recent years (some have). I got out of RE in 2007. Yes, I saw the crash coming. I am close to getting back in.

Regarding this strategic fault matter..... It is a financial and business transaction, not a moral one, IMO. I read this little paragraph recently and it sums up my thoughts nicely:

--------------
"Strategic default has been portrayed as immoral by lenders. This is wrong. Lenders were immoral when they abdicated their responsibility to sound lending practices that ensured their borrowers could remain solvent. It is outrageous after such irresponsible lender behavior that lenders have the nerve to chastise borrowers for being immoral when borrowers fail to repay their debts."
--------------

It's a 2 way street. Don't "sell" or finance an asset-backed/collateralized asset if you aren't willing to take it back.


Greg, again, great thread and it's obvious this is helping many here either directly with data, or indirectly, with the motivation and stimulation to get working on investments and retirements. :thumbsup:

Some people work that way -- I never have - never will.

I had a mortgage on the place when I bought it (Tempe place) but paid it off... it was at 6+%... and I don't like to make payments. Regardless of that it is still my obligation - not anyone else's, I don't care what anyone else says. :D

Same here. Bought a place that has gone down 30%+ since purchase in 2005. Over the last 7 years, we've gotten right side up through persistence and low interest rates. Although it would have been easy to just make minimum payments and walk away now that we're buying a new place, but that is not us. We made the conscious decision to buy and got caught in bad timing. We've been lucky to be in a position to pay it down and still save for a new place. We're now moving into a great place and we are looking forward to separating ourselves from this poor investment we currently call home!

Well Done Guys... Kinda my rant and point from earlier.

I sat down with my in-laws way before they lost, or excuse me, WALKED, away from their home..

They pulled money out to fund the remodel, hot tub, private college for the BMW boy, Europe, and on, and on....

In the end , they gave up their HOME, for all this.And with 40K in a 401K, and they are 50 plus..Had they followed my plan, they would have never been in this mess.

I am in California , in an Area of fancy cars, and High end remodels, all done on the bubble equity..

so much of what is around me is built on Leverage and not ownership..I am the consumer debt free guy..kinda a rare breed here..

The survivor I told you about earlier, one left out of 9 homes. She bought in 2000, made all the payments, and NEVER took out any FALSE equity.

Her house is still worth what she paid for it, 10 years later, not under water, and she will be fine. All the other houses,eight of them including mine, went to foreclosure and were resold.

It was scary to buy when i did...Am i buying into a ghost town ??? so many for sale signs on ONE street. now everything has changed and the homes have been resold to more qualified buyers and the area is beautiful.

Big Banks are as immoral as it gets, But I went old school when i went to get a Loan.. FICO, Healthy Down payment, ect..., and I read the contract..

And I had lost a home in 1993 due to non payment and foreclosure... that was another housing Dive, So i know the drill. no pay...go away...Also I was going through a divorce, so no strategic default there...

The bubble had people relying on a quick buck and unrealistic views of the equity that was being built on thin air..

Rather than talk morality, since this is Investing102, we can say that for some, it was bad investment decisions that led to personal decisions that i will not Judge.

I would think that just going through the experience would make people make better decisions..

Whether or not this is a moral vs. immoral decision, I too lost my house about 9 months ago. The wifes company was sold and the whole staff layed off. She had 11 years with the company. All I asked for was a little help on my monthly. I made it clear I had no intentions of walking away, didn't care that the house was now worth -50%, didn't ask for my loan to be changed, I just wanted some help with my monthly payment until she was able to get back into another job. They strung me along for 5 months before they basically told me tough ****. The house sat vacant for 6 months before it finally sold again. Do I have a little resentment towards the banks, yes I do. Not everyone decides to just walk away because of a loss. I did everything I could to keep it and still got stiffed. Or at least everything I could with the knowledge I had at the time. This is why I'm taking this Investing 102 thread so serious, NEVER AGAIN will they play me for the fool.

Man, I am sorry that it happened to you.. you seem committed to bouncing back.

I hope to let this thread steer it's way back to investing. I do not want people to feel old wounds.

Thanks for sharing your story, and I will try to share info to help going forward, and not looking back...

I had a few MAJOR setbacks in life before I got to the never again stage..

The wolves are always ready for us to make a mistake.. I had a fortune and lost it all...I rebuilt it, and now I am with you, NEVER again , will i let someone else control my life...Only the man upstairs and my Health can stop me now..

I wish you the best.. With Greg and others help, the future is ours..:cheers:

Condolences Jose, it's no fun being taken down by the corperate boys in suits. Which is one of the primary reasons I deal with a local bank, I previously dealt with First Interstate (B of A now) and learned early on they were becoming too big for me to do the type of business I like to do......face to face with a genuine caring human.

Stay the course, you'll survive and be a better and wiser person for it. :thumbsup:

The difference here Jose is that you TRIED to do the right thing... and I commend you for that. If a guy tries -- and it doesn't work out... then that's the way it goes sometimes - but you made an honest attempt to do your best.

People don't start businesses because they're afraid they might fail. If you're young and have time to recover from the failure -- I always say go for it... failing is not strike against a guy in my book -- it's a plus because it tells me he was willing to take the risk to raise himself up. That takes guts - and most come out of the failure a better businessman. Most of the guys I know that are successful have failed at least once.. and it's also why we have LLC's and Corporations - because people know things can and do go wrong - and they protect their personal assets thru these.

I will also tell you - the only money I've ever lost - was investments in sure fire 100% the coolest ideas in the Universe... If I didn't think that way - I wouldn't have invested in the first place.

The Investing 102 school says -- that's okay -- as long as you keep those investments to a very small percentage of your investable dollars.

Words to live by...

The most successful people have failed more than they succeeded...

A Hall of Famer in Baseball needs to only hit the Ball 3 out of 10 times to make Cooperstown...A .333 average..

The post it note came from a failure at making a permanent glue....the opposite happened..

Edison and the Light Bulb..how many failures ? Hundreds? Then Boom...

It is the people who get up after failure, and learn to never repeat that failure, that make it..

Very few have hit the big one on the first shot...

I have had multiple successes, and multiple failures...

The times that I did not get up and move on, bad things happened..

EVERY time i got up from a loss or failure, and i moved on, great thing eventually happened..

Jose, this will make you stronger, and wiser..

And as Greg said, at least you tried..The example I used , was of family on a self destruction mode, that they caused.

You just got caught up in the big mess.

Mike V.:cheers:

Great question -- and I hope I don't come off as sounding arrogant or like a smart ass with my response.

#1 -- I don't need the money so I'm okay taking the capital hit.

#2 -- I live in Seattle - this place is a zillion miles away in Phoenix

#3 -- Running the numbers - the rent is $1250 (other 3 bdrms there) so after I pay $250 month HOA - Insurance - Property taxes etc - Utilities etc... my net might be $700 a month or less. Less if I hire a "professional" property manager cause they take their share. $700 a month to me is about like most people picking up a dollar... it just isn't the kind of money I think about.

Now -- IF I had a mortgage - and needed to cover "most" of it -- and didn't want to ruin my credit by walking away (or doing the morally correct thing of actually paying my bills)... then that would be one thing... and especially if I thought the market might come back within the next 3 to 5 years. Remember that the market would have to TRIPLE for me to get my money to break even - and then if you calculate time money line -- I'd own the dump for 10 years and still probably take a capital loss.

If I sell it for 100K --- net -- I can invest that and MAKE 5K per year tax free in Muni bonds and have absolutely no worries or hassles.... like when the renter fails to pay or pays late - or goes bankrupt and it takes me 6 months to evict - or runs off after trashing the place.... and it costs me everything I "made" for the year plus to rehab it (again).

So for me -- I'm not in a positon to have to cover my arse... I'm in a position to just be able to make decisions on what I "want to do" not what I should or could do.

It's why our boat was called "Options".... everyone thought I was a stock trader -- but it was really because the boat was just another "option" for how we wanted to spend our time. If I was a trader - and the boat named Options -- I'd have named the dingy 'Puts and Calls".



Not at all Greg, I just wasn't sure what you could rent the thing for. At those kind of numbers, I agree, not worth the hassle and the 100k could go somewhere else.

Darren

That's the whole deal in a nutshell Darren. Everyone has different financial circumstances - and fortunately for us - the "loss" just isn't worth the hassle of trying to "save it". While I would have felt better about the "investment" - because nobody wants to feel what they did was stupid... regardless of the dollar amount... this turned out to be a stupid move. I have a long list to which it can be added.

And - as I said - if I had a mortgage on the place - it would make more sense to rent it even if I had to subsidize it a little each month... and hold it til I could sell it for the mortgage. But I don't... so I look at it as cash (employees) not working real well that would need lots of management to do very little in the way of a return.

We've actually discussed just donating it to a worthy cause... but couldn't get it finished in time to do that in the 2011 tax year. I can not claim the purchase amount as a loss deduction If I could then it would really be worth it.

Hey Greg*
*You just have to buy down your loss on your condo. By three more at 100k. Total investment on 4 units 600k or $150k per condo. Net rent per unit $700 so on 4 units that is $2800 per month. That is 5.6% on the 600k or $33,600 a year until the market comes back. I know you know this and don't care for the hassle but $1200 a month on $100k condo is really good rent for the landlord. Plus I learned about buying down a loss a couple of pages ago.*
Ray

"There's not such thing as a failure who keeps trying. Coasting to the bottom is the only disgrace" - Blues Traveler- Just Wait




Anyway, I've been absent from my own thread for too long and just caught up with it today. I'm going to sit down and figure out how to move things around within the accounts I already have since i have both a ROTH IRA and 401K. Both are set up on autopilot basically. I think I set the 401K at moderate growth level and I know I set the ROTH at a targeted retirement age of 2045 with in Vanguard's Star Fund. I'm not sure I want to touch the ROTH. I think it may be just fear on my part. I honestly am not sure how to read exactly what it's doing in terms of performance overall. I believe the most I can see is from 3 years ago on and I've had it longer. I don't know what I've put into it total versus where it is sitting right now. I know that's bad but I was kind of working on the assumption that I would always be able to pull that info up from day one on their website.

The 401K is new and for whatever reason I feel more comfortable playing with it. I just need to figure out Fidelity's website.

All the same, the point is, I'll be making my changes and posting the results etc as I said I would many many pages ago. I started the thread and I'm ok with being the guinea pig even if I walk into a wall, doh!

Alright, time to plug in the Rush In Rio DVD and get to work. I'll be back.

Good info -- and for this forum is very good information for OTHERS.... as this can and does work. I'll "average down" a stock investment - which I've discussed in previous posts.

I have owned LARGE (300 plus units per building) class A apartment complexes... so I understand the rent reward capital depreciation etc. BUT -- big BUTT -- they are professionally managed and I just collect a check every 6 months. Again -- the risk/reward/work factor just isn't worth the 6 tenths of a percent differential of owning McDonalds or Annaly Capital Management. $600K in Annaly (NLY) gets you 35,000 shares of dividend paying stock - it pays .57 per share per quarter... or a total of $79,800.00 per year.

Do you see why I'm rich and you're not? :rofl:

This is a copy and paste from my Fidelity 401K account under the heading of Average Annual Total Returns(%) as of 9/30/2011. Yeaaaaaaaaaaaah :rolleyes:


1 Year -0.35 -0.12
3 Year 6.07 4.45
5 Year 3.24 2.08
10 Year 6.30 N/A

I don't think that's too stellar personally.

Vanguard Star Fund SUCKS! That is the fund you should move. It invests in other Vanguard funds --- how dumb is that (for them not you) and has a 5 year growth of a whopping 3%

This is a bunch of drunks throwing darts at a dart board of a bunch of drunks throwing darts. A fund investing in other funds all owned and managed by the same group. UGH!

In TEN YEARS its UP 23% -- so 10 grand invested is now 12 grand. OMG! Horrible.

Sorry -- it's just another Mutual Fund disaster du jour.

Well crap. It appears I can't change my 401K around to the point where I can select what stocks I am in. I can only make changes based on a few premixed portfolios or single index funds like the S&P 500. Is that common with employer sponsored 401K plans? Can I have more than one 401K plan where I control everything or is controlling my ROTH the only option I have now beside going outside either of these plans totally and opening my own brokerage account with say Schwab?

I also finally figured out how to view the performance of my 401K since inception back in 2010 and it's at 7% since the start. Not bad but more would be nice, lol.

LOL:rofl: :rofl: :rofl:

I never wonder why you are rich...I am just here to learn some skills to grow my nest egg even more..

Your words and your knowledge tell me why, and Go Greg go..:thumbsup:

We can all learn and put the knowledge to work, all be it, at a smaller scale..

My wife and I were talking over coffee this morning, and we are so Glad we put as much money as we did to work, when we did.

Keep sharing knowledge with us... There are some hardcore few of us that are willing to comment, good or bad..

But I know that many more are reading and not commenting.. Also maybe overwhelmed..

i know we talked about a recap, and you did, but among your other millions of things you have going, could you think of the guys not commenting, and see what we can do to get them commenting.

Many successful car guys, that are still overwhelmed with Investing..

Maybe a 101 Generalization of the whole concept.. Better you do it than i do it..Newbie and all..

Thanks .. Too many are reading and not commenting, and i know they have questions ..

Thanks,

Mike V.:cheers:

Yes -- I'd forgotten about the recap.

My comments are all meant in jest of course.

When I write -- such as the comparison of keeping the condo vs buying more of them and renting them out -- is to try to show the THOUGHT PROCESS over arguing about what is the "best way" or the "right or wrong" way. There are so many ways to think about money -- so many what ifs -- that what I'm trying to put a slant on is just to actually put some figures down and start to make these what if scenarios. EACH INDIVIDUAL needs to adjust to meet their needs. There are alternatives if you have the options and people need to examine them.

Thanks about the recap..

And I always take your comments with good intentions.

Yes, I have talked to a few people that are interested, but they just get lost.

You have a few at the front of the Class at the 102 level, me God knows somewhere in the middle, and MANY that may need occasional recaps.

But I do understand the basis of your thread, that the viewer do his or her homework. Totally agreed. I have spent much time on research, and i have just scratched the surface.

But since my Body is not what it used to be, my mind must make up for it, so i am passionate about money, investing, and Life, and the troops may need motivation.

No matter how easy you spoon feed us, we each must determine our specific needs,kids, age,risk, health,.. So many variables , that there is plenty of homework to be done.

Well nothing is going to happen today for me. I can't figure out how to move things around from the website. Oh well, I'll call this week sometime and speak with a human. Why do they have to make it so difficult? Is this some sort fo ploy to make sure they make as much money off you as possible without you being able to control everything easily, lol?

Oh and I don't have a Star Fund I have their VTIVX fund. Still not great though. It gets good ratings from Morning Star et al though.

While you are here, thank you for starting this thread.

Although Greg is giving us the majority of knowledge, YOU started this thread.

Whatever , everyone can do to help steer you right, will be done..

Best thread ever.. I tried on other sites to motivate people...

I was bothering their car time...Ok then...You guys are into it...:thumbsup: :thumbsup:

I agree about the hassle but you are not counting the 200 loss in your calculation. If you only had 600 total to invest and you had lost 200 on the condo you would only be able to invest 400 in the market. *And comparing NLY isn't a fair comparison as generally real-estate is more a steady eddy investment *like Mc Donald's. *So basically you have 400 invested in Mc Donald's instead of 600 in condo's. with basically the same % return in both investment your behind. You could always be richer right?*

Ray;)

I truly believe that everyone can have a better life if they simply pay attention and make small steps that actually make their life better. I also do not believe in trying to exploit those people in society that have more or are "rich". Instead I believe we all can learn from them in most cases. Knowledge is NOT regulated to text books or a classroom. So, me wanting to expand my knowledge, make my life better, and continue to live what I believe simply thought I'd ask people within this group, that I am apart of, what they knew hoping someone could help. I never thought it would turn into what it has. I'm glad others are getting as much or more from this than I am. So you're welcome, but Greg and everyone else that has contributed have my sincere gratitude.

Now, it's only in the 40s but the sun is up so I'm going to partake in one of my pleasures that also makes my life better and go ride my Duc. See ya!

May turn out to be a friggin book!
 

It is very hard to do a "recap" of INVESTING 102.... because there are so many variables and scenarios for different ages - differing incomes - differing situations... but what I will try to do here is to get people to think about some aspects of investing and try to shed light and alleviate some of the fears "newbs" might have about "investing".

#1 It is never too late to start! Time is a money multiplier. The old saying was that money doubled every 7 years. That was based on a healthy reinvested return of around 8 or 9% annually. Today - with the lower interest rates that double might be closer to 10 years.

#2 Take control of your investments/money. Putting money in the company 401 program is fantastic! BUT! You can not simply accept that doing so will get you where you need to be. YOU MUST examine where your money is - and what return (ROI - Return On Investment) you're getting. Many people pick a Mutual Fund(s) and plough money in weekly and never ever look at it. Some of these funds may actually LOSE money. Some are barely adequate - and a very few do "okay". YOU can do better than "okay" with just a simple understanding of the returns - the diversification - and your options for your investments.

#3 What to look for in a good investment. There are several very simple easy to understand terms that will help you choose one fund or stock over the other.

A) Growth - or Capital appreciation: At what percentage is the investment growing on face value. So if a share is at $10 - and it's 5 year growth rate is 10% (these numbers are easy to find using Yahoo or Google Finance) then you need to COMPARE that rate against some other choice until you are happy with the rate of return.

B) Dividends - Again - using a financial site look for whether or not the stock is paying a dividend. Dividends are generally paid quarterly and can greatly affect your TOTAL RETURN. They help bouy a stocks price in a down market. Reinvesting the dividend (automatically) can really snowball your return!

C) Total Return - this is harder to find information but is really really worth the effort! Total Return is the growth in capital and the dividend REINVESTED over time. Generally you can find 1 - 3 and 5 year Total Return information. T/R is CRITICAL and should be a deciding factor for most investments. This is the actual amount an investment has grown over the measured time frame. A dividend paying stock might look like a bad investment if it only pays 2% dividend - but with growth in the stock price - the T/R might be 100% in 5 years! I don't care what investment you are making -- The T/R is what you are after!

The Charts - Take any stock or mutual fund and look at the 5 year or longer chart. This is only a reflection of the share price growth (or dip - or decline). It is this long term "picture" that will help you to see that while the price might go down or swing up and down daily or weekly - or even for a year or two - but the OVERALL chart is going UP and the more UP the better! When the market turns against us - we need to re-visit these charts for assurance that our strategy is on the right track. They will help you get through the tough times.

Balance - Greed generally tries to tip us out of balance. We all want the hot stock... or the hot growth industry or the highest dividend payer. Trust me - that if you load the boat with this strategy it will tend to tip over. So try to curb your greed - it's okay to have a hot one, or the bigger dividend payer - but balance it with a steady eddy. A steady eddy is a stock that just plugs along - and when looking at it's chart - compared to another stock - it didn't GO DOWN nearly as much as the "market" did. No - it doesn't go up as fast either - but it's the DOWN that will kill you. Here's why. In a down market people tend to panic - they tend to SELL at the wrong time - They have FEAR... it's real - don't discount it... but if you have an account that has some steady eddies in it - they will help offset your big down stocks - so overall you're not down as much. Just not being down as much - is very comforting. Living with your investments long term is where you'll make your money. Selling in a down market is the way to lose the most.

Diversify - Depending on how much you have to invest - try to get as many different stocks as you can to a point. More than 20 is too much. So if you have 10 grand - try to buy 5 and when you have more dough add a 6th name and so on. But even if you have a million - 20 or so stocks is enough to get you diversified. It's called the 5% rule... no more than 5% in any ONE single investment. That is impossible to achieve until you get to around 100,000 invested. But the rule is simple enough to understand. If you have $1,000 buy ONE company - save another $1,000 and buy a second company and so on.

SIMPLE TO UNDERSTAND STRATEGIES

The old KISS principle to investing works for most people == they just never thought of it this way. Everyone wants to invest in the next hot stock (Faceybook? LOL) but in doing so they overlook real simple winners. Winners are stocks you can live with thru thick and thin... that have that magic Total Return... They are stock that you're familiar with... companies that you buy at, or eat at, or use. Names like McDonalds - Kraft - Coke - Pepsi - Home Depot - Lowes - Ford - Caterpillar - Google - Best Buy - Amazon - Costco - Chevron - Exxon etc. You do not have to look very hard or very far to find real good total returns. You don't have to do any Tom foolery.

I had written earlier - that if you want investment ideas -- drive down a busy commercial street - look around and jot down the names of the biggest business you see and that you know the names of and understand what business they're in. Then go look them up. Write it down - now go and compare them against known competitors. So -- if SEARS is a name you wrote down -- get their Dividend info - growth info - T/R info... now go compare them to other names in that 'sector' or industry. Compare Sears to Best Buy - Home Depot - Lowes - Target - Costco etc. What you're looking for is the education this will give you. Some names just don't do very well as investments - others are stellar... so what you're trying to find is THE BEST OF BREED

BEST OF BREED are the stocks or Mutual Funds that have outperformed their competitors OVER TIME... not 6 weeks -- but over a 5 year period of time. Why is this important? Because it means that their management is on the right track. Remember that when you buy shares -- you've become a partner in that business! Don't you want to partner with the best and brightest?

The real key to investing for the long haul - is to not get caught up in all the news on TV -- while you want to pay attention to the TRENDS -- i.e., is the FED going to raise interest rates -- are we going into a recession - or are we seeing information that is saying we're out of a recession... the rest is just OPINIONS. Opinions are what makes a market -- one guy is chicken little and selling - the other guy is balls out buying... neither one of these so called "experts" KNOW. They're making educated GUESSES.... and they're getting their face on TV. But in the end it's nothing more than their opinion. Since nobody can tell you when something is going to happen - you're best off INVESTING - pick your best of breed stocks with good long term charts - and if possible - the best dividends. Then kick back and watch your investments grow.

You don't need to be an investment professional... you just need to do a minimum amount of research and put your thinking cap on. Do you like COKE over PEPSI - look at their chart - do the Total return comparison - compare the dividend -- then just choose the one you like if there's not much difference... Stick to the basics of making money for yourself.... Names you know and trust - good long term chart - dividend or not - what is the total return... and try to diversify.

And remember the best number one rule ever in the history of the UNIVERSE..... if the grocery store clerk tells you about how much money they're making doing "X" (.coms - house flipping - gold).... RUN! By the time they're into it you're at the end of whatever "it" is.

Either way == HORRIBLE returns overall....


10 year @ 37%

5 year @ MINUS 5%

The 3 year only looks good because of the trough it went in! OMG!

It is another Vanguard fund that invests in other Vanguard funds... sorry. That strategy is just dumber than dumb. What they have done is get you to allow them to create a buyer for their other funds. So it's really just a cash slush fund for them to buy shares in their other funds if they want to sell some... they have a ready made buyer. OMG..... RUN!!!!

Great recap! Going to hit the print button and start watching the Super Bowl. Thanks Greg!:thumbsup:

This is what I was working with on December 27, 2011.
Stocks
Apple (AAPL) P/E-14.75 Div/Yield-Not listed 10YR-+3788%
Caterpillar (CAT) P/E-14.03 Div/Yield-0.46/2.00 10YR-+256.89%
Disney (DIS) P/E-14.94 Div/Yield-0.60/1.60 10YR-+81.87%
Harley (HOG) P/E-20.28 Div/Yield-0.12/1.29 10YR--28.24%
Nike (NKE) P/E-20.94 Div/Yield-0.36/1.47 10YR-+248.03%

Mutual Funds
Fidelity Freedom Fund 2045 (FFFGX) 10YR--8.63%
Spartan Total Market Index Investor Class (FSTMX) 10YR-+23.73%
Vanguard Total International Stock Index Fund (VGTSX) 10YR-42.13%

Since then I have sold Harley (HOG), Fidelity Freedom Fund 2045 (FFFGX) & Vangaurd Total International Stock Index Fund (VGTSX). Unfortunately, I didn't jot down the numbers prior to my fire sale but I can tell you that I am much happier with my current portfolio. The performance has been steady and I plan on adding to it. Here is how it currently sits as of today.


Stocks
Apple (AAPL) P/E-13.09 Div/Yield-Not listed 10YR-+3666.33%
Altria Group (MO) P/E- 17.61 Div/Yield- 0.49/5.69 10YR-+151.05%
Caterpillar (CAT) P/E-15.40 Div/Yield-0.46/1.61 10YR-+351.07%
Consolidated Edison (ED) P/E-16.50 Div/Yield-0.61/4.11 10YR-+43.15
Disney (DIS) P/E-15.89 Div/Yield-0.60/1.50 10YR-+78.17%
Kinder Morgan Energy (KMP) P/E-539.96 Div/Yield-1.16/5.41 10YR-+152.38%
Nike (NKE) P/E-22.12 Div/Yield-0.36/1.39 10YR-+244.89%
PepsiCo (PEP) P/E-16.72 Div/Yield-0.51/3.09 10YR-+33%

Mutual Funds
Spartan Total Market Index Investor Class (FSTMX) 10YR-+34.73%

Greg Weld - Thank you again for the time, energy and passion you have put forward in the this thread. Best example of a charitable contribution I've seen in a long time, you deserve a tax deduction for it. :thumbsup:

LMAO:rofl:

GREG...I asked for a recap...Nice Job...

I think the recap may need to be posted on page one, lol. Heck of a summation that's for sure.

Good super bowl....

Thanks for the kudos guys...

Sieg -- I'm going to see if my CPA agrees with your deduction idea... :hail: :rofl:

Jose --- MUCH BETTER portfolio! Note by the way - of the stocks you HAD - the losers were MUTUAL FUNDS not the stocks! Glad your on a better track now.