Responding to the "where do I look for comparisons" question...

There's no one source for "everything"... and you can make comparisons until your brain is on fire. If you are looking for "names" in sectors -- google the ETF in that sector -- say "OIL COMPANIES" or something similar -- you'll get so much information that you'll be on overload in a nanosecond.

This is why I say -- for "investing 102" that you have little more to do than drive down a busy street and make note of the big names you see. Which one do you like - which one do you purchase from...

So let's say there's a Chevron - an ARCO - and a SHELL gas station. Just start to compare those and see where that takes you. Doing a minimum amount of research on just those three - will bring up other names... and if they're familiar - look them up -- that will bring other names to mind - or maybe they're mentioned.

The problem for most people is there are TOO MANY names once they get started. And the key is not to become a Mutual Fund and load up on all kinds of crap you don't really know anything about. Keep it simple!

Find out the SECTORS you want to investigate.... so make those big and broad.... ENERGY... within energy you'll find pipes - drillers - retailers - refiners - some that do both or whatever... but this is when I'll remind you to find names that you know! If you don't know the name and have no idea what they do or why -- then you shouldn't even bother investigating. You'll be wandering around aimlessly for weeks if you start down that path. :willy: :lol:

Unless you're running a 100 million dollar fund... keep your investing simple. Keep it diversified. Make sure you understand what you own.

There's a zillion companies -- there's very few "sectors" - so I'd start with sectors - because that will get you to see diversity. Energy - consumer - finance - transportation - Industrials - etc. So once you have that idea in your head - just google "Industrial mutual funds". What I did then - for this post - is highlighted the first "SYMBOL" that came up and said "search google" which took me to the google finance website and their chart etc -- I scrolled down to see what they top 10 holdings were.... on that particlular list there was like one company I recognized -- so I went back and found another symbol and did google search on that one - it's top ten was a who's who of Industrial companies I knew... GE -- Honeywell - United Technologies - Cummins - Catapiller etc.

My take is -- if you threw a dart at the top ten holdings of this mutual fund - did a minimum amount of research and compared these top ten industrial names - you'd find one that had great total return = paid a decent dividend = and was a company you'd want to own. Move on to another sector....

I know this sounds simple to some and overly complicated to others -- but it will work for you.

Remember the number one thing.... just getting started -- it will change your life forever. Once you're hooked on making money -- you'll find it the best addiction you've ever had. :cheers:

Thats somewhat how i ended up with CVX, there's quite a few of them in our town. Coupled with their dividend increases, solid returns, etc.


duh! why didn't I think of that. That's the little piece of the puzzle i was looking for. :cheers:

That's what I'm here for! :rofl: :faint:

Oh, I'm not worried. I just found it funny that I was comparing those two and, like the little man that makes the stock go down right after you purchase, I end up choosing the one that doesn't separate into two companies.

Honestly not sure about the other companies but Marathon is also two "separate" companies. Marathon Petroleum and Marathon Oil. Same situation, one's upstream and the other is down stream.

I ultimately chose Oxy anyway because I do so much work for them and am aware of what they are trying to do which is expand production and cut costs. I think they'll do just fine.

So do I - and the past shows they have done just fine. :cheers:

Well I entered the market. I took some money I had in a 401k and rolled it over to a self directed IRA. Just incase you were wondering thats why the market is down today! LOL

BUTTHEAD!

Speaking of oil companies...

they are all taking a hit today... that puts CVX down 7.5% for me...

Debating whether or not to take the few hundred i have saved up waiting to reach 1k for my next purchase, or use that to buy some CVX on sale. :question:

I'm in CVX for 1k (@ $110.10/share).. and have $416 ($7 commission for trade) waiting to be used (was saving it for my next 1k purchase). Not sure if its worth it or not.



On a side note.... 4/10/2012 DIVIDEND DIVIDEND:MO = $13.57 :woot: :cheers: :lateral:

sheesh maybe I whould of waited a week

Nah... its all your fault. if you wouldnt of joined in, the markets would be up a few points today. :lol:

j/k... there's that little guy yellin 'He's in! take the market down and see if he can stand it!"

:cheers:

I would wait to buy == and don't get all nervous about less than 10%...


Summer is usually the time to buy... the old "sell in May and go away" usually plays out - and when they're sellin' you want to be buying'

ok... that's a safe bet then...

I wasn't worried about being "down" 10%.. i was worried about do i go buy them when their on sale now.. or wait and see if they go on better sale later. lol

I think I'll hold off on any "on sale" purchases (unless it goes waaay down), and continue saving my 1k per buy (about every 2.5 months) and continue diversifying.

Although.. with such low trans fee's for Sharebuilder ($2/buy), i can stagger my buy every 2 weeks, and limp in to do a little better dollar cost averaging.. i dunno. we'll see. (normal buy is $7).

Patience --- save up some dough -- collect some dividends (they should be reinvested if you checked the right box) and averaging in over TIME -- is what get's 'er done.


So there is "averaging in" and there is "trying to catch a falling knife"... they're different and there's a lot of learning going on to know the difference.

The market has gone dang near straight up for 3 or 4 months.... it's UP what it should be up in a year.... and then there's this thing called "on average" --- so if the average ANNUAL increase in the market is 10% -- and we've done that all in the first quarter -- the next couple quarters might kick our butts to bring that average in line with what's norm.

Sometimes it's better to pause and "take stock" (had to throw that in there) of where we're headed and what's up next...

Remember this too... this is why we LOVE our dividends! Because I got three of them between yesterday and today... and that's real cash - regardless of what the stock price is.

So much for that buying on the dips!

HA!

I don't know about you guys - but I think this market is just going to take us along for the ride. Danged if I can guess what's it's going to.

Must be why I've fallen in love with getting dividends... they just keep coming regardless of the ups and downs. :thumbsup: :D

lol. wasnt a long pullback... oh well. didnt affect me either way. I still got my MO dividend :D :D :cheers:


Been sharing advice from here with a couple other people. Trying to get them on the right track as well. :lateral:

on a down note.. i STILL havent figured out how to re-balance my 401k.. doh... I did print out every funds "report card" from schwab, to try and compare using their tools.. but, its a challenge.:(

I have a question about "The Asset Play". While reading Peter Lynchs book, One Up on Wall Street, he mentions looking at the the assets a company may have in its possession when researching stocks. One thing that comes to mind is the land owned by the military branches being turned back into civilian property. There are a lot of old bases being handed back to the surrounding communities to build houses on for residents of those cities, Concord California being an example of one. Are there possible investment opportunities in this in the form of government bonds, etc?

I understand we are trying to keep this Investing 102 but one constant I keep hearing when starting out is to look for the investment that is right in front of you that you normally may not consider. With the redevelopment of the bases back into civilian life, are there investment opportunities in this and what types?

Jose --

Kudos to you for keeping your eyes open - and your ear to the ground!


#1 - Let me address your "bond" question.... because that is a good Investing 102 subject.

None of you should be in any type of "bonds" at your ages... and even more important -- not inside of any retirement account.

If you can buy high grade CORPORATE BONDS -- just for the ultra high dividend some of them pay - that would be okay.... but (big butt in the room) what you're going to give up with BONDS is CAPITAL APPRECIATION! Very important part of investing is to get a dividend AND the capital appreciation over time.

I have bonds -- but I'm OLD (will be 59 this summer) and I'm retired... so bonds are okay for me - and I STILL DON'T LIKE THEM. They are a "vehicle" to keep my taxable income "down" (that's a laugh by the way)... but I will hold these bonds for 1 to 5 years and have absolutely ZERO capital growth.. so like most things, there's a trade off in here.

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


Okay -- Now on to the other question. I have no idea what is available to invest in regarding these properties. I know that Alameda County got the Alameda Naval Air Base back -- and there's been lots of discussions with what to do with it. There's waterfront - there's acreage galore... and as you all should know -- the county / city / state -- want these to become tax revenue not overhead.

Here's the caveat I'd use for all Investing 102 readers..... Generally when people get into investing trouble -- it's when they step into something they're not knowledgable about. Overreaching in any style/type of investment is a big mistake. So I'd just look to see if there is developments (not necessarily property development - but "developments" as in what's coming down the road). Let's say you operate a local gas station -- then you might want to see if there's going to be a location for one in the newly developed "area".

My "sage" advice however is to always remember -- when you invest with "others" ---- they're just people ---- and your investment is then with other people. They'll paint a rosy picture... and everyone will be all jacked up about the "can't lose" proposition... This is when you have to stick to your guns and only invest what you can lose... because more often than not -- it will be a loser. I've done enough of them that I can say that with certainty.

If you want to play "housing" development ---- the best way to do that is investing in an LLC = so just buying a share or two when the developer / owners make it available. Typically you need to be what's called an Accredited Investor -- with a sizable net worth -- in order to be legally allowed to invest in stuff like this... because they're highly illiquid... so they want to make sure you have "other money". But they spin off nice % of income and can have huge upside appreciation when the group decides to sell.

I would check with the building department to see what plans have been in the hopper --- and then just see what/who is doing them then make contact -- then REALLY REALLY check them out.

I've done lots of these kinds of investments as an investor (apartment LLC's) and they've been very lucrative. I invested in a 344 unit Class A apartment complex in Tucson, AZ and it returned 117% capital appreciation in 4 years! I'll take that kind of money any day!

But there's many ways to play real-estate --- and sometimes it's a lot less nerve wracking to just invest in one of the big publicly traded REITS (Real Estate Investment Trusts) that pay nice dividends and have upside potential as well. You can find lots of 'em searching Schwab etc. I have one now - called National Retail Properties (NNN).. that pays a great dividend (6+%).

Or if you think housing is ever going to come back -- now might be a good time to bottom feed on the big builders -- Lennar - Pulte - etc.... But do some good research and pay particular attention to WHERE they are building.

I'm not sure where I'm trying to go by asking that, its definately out of my investment range, both financially and based on my knowledge level. I'm really looking for that outside of the box type of investment. The problem I see with this is that the market adjusts almost instantly to any type of investment news. So unless I had some sort of insider information, I'm positive there are others thinking like me.

With that said, I'm comfortable applying what information I do have and putting that towards my retirement accounts. I'm now trying to think about those investments where I won't have to wait for retirement to enjoy. I'll be 35 in July and I would like to start enjoying my investments (granted they're positive) by 45 while gradually slowing down having to work for someone.

On another note, forgive me for drifting, when it comes to the redevelopments of these old bases or the building of new football stadiums (Santa Clara County), should I look at the developers and see if they are traded publicly or part of a REIT? Along with doing my homework to make sure they are worth investing in of course.

+1 It was my first from MO. :thumbsup:

9:49 AM Ford (F +0.2%) and Dow Chemical (DOW +1.5%) announce a JV to explore better ways to use carbon fiber in car and truck components. The aim is to improve fuel efficiency by making vehicles lighter, with Ford aiming to cut between 250 and 750 pounds from the weight of its cars and trucks by 2020. (Read the comments on this)
---------------------------
I believe some thanks goes out to the Formula One engineers for making this a possibility.

Gotta LOVE those dividends!!!!

04/10/2012 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$6,150.00



:rofl:

Heck that might even cover the first service on the Toter. :unibrow:

I have a question.
I have shares in an energy company CoP and they are about to reposition the company splitting the refineries and downstream side of the company to become Phillips 66. When the split happens they are giving every shareholder 1 Phillips 66 share for every 2 CoP shares they own. If you don't have the brokerage set up to accept the shares they will automatically sell the new Phillips 66 shares and give you the cash. You get hit with capital gains for the income tax year.
My question is: Do companies such as this lose share value right off the bat and then gain or is it just a guess?
I need to know what to do within a week and get accts set up keep, the Phillips shares or take the money and run, which is the default easy option.

Keep all the shares.... and yes -- you're per share value will get readjusted to reflex the split. BUT --- I'd hold both companies.

From there -- if anyone had a crystal ball and could see the future -- we'd all be rich.

:thumbsup:

Or two tanks of diesel!

I should have known you upgraded to larger tanks. :rofl:

Greg,

Can you explain this. It seems like if the stock price goes down "equal to the dividend payout," your return would be zero. What am i missing?

Wow... theirs a lot of info to read through here.

I read through about 15 pages and didn't see much on Roth IRA's. I listen to Dave Ramsey daily and he swears by Roth's.

Greg whats your thoughts?

I'll try to quote Greg correctly " Best gift the government gave us "

i was going to say something similar.. but, didnt want to misquote him. heheh.


If i recall.. Roth IRA = THE BEST.. you pay taxes now, and if your money grows to hundreds/thousands/millions later, you dont have to pay squat on that when you take it out.

But, there is some wiggle room, where it may make more sense to contribute to a company 401k/pre-Tax ira. if your on that "tax bubble" amount, and dumping money into a 401k can lower your tax bracket, it may be a wise decision to do that.. but thats something you'll have to look into, and decide.

Pound as much money into a ROTH IRA as the law will allow! Best thing that ever happened to the American public!

Put in AFTER TAX money -- allow it to grow to retirement and beyond - and pull it all out tax FREE.... Mana from heaven man!

Woody --- when the company pays out "cash" for a dividend -- they are worth less... just like if you get paid on Friday you have "X" amount... then on Monday you pay your bills -- you're worth less (or worthless - guess it depends).

So the market "adjusts" the share price accordingly. In most cases - most of the time - the stock gets taken right back up again. So over time - you're going to have capital growth AND will have collected the dividend.

Take a look at any company that you're going to invest in - and check out the 3 - 5 - 10 year chart - you'll see - if it's a company worth investing in - that they've been paying a quarterly dividend... and at the same time - the price is higher over that long period of time.

Greg,

Thanks for taking the time to explain. I understand what you are saying. I guess I am looking at a very short term example in the case of NLY.

My thinking is that quoted yield is say 13% per year which equates to approximately 3.25% per quarter. So my thinking is that assuming the market is stable you should earn about 3.25% per quarter just on the dividend. So Nly was trading about 15.96 on January 2. At the end of the first quarter, after ex-dividend, it was trading at 15.60 which is a 2.25% decline.

So if you held it for the quarter, your net is only about 1% for the quarter which is not so good. Maybe looking at it on a quarterly basis is too short of a term?

WAY TOO SHORT TERM


:cheers:

newbie question.
Do you need to be in the stock for the whole quarter period to collect the dividend, they don't pro-rate it correct.

Greg covered it prior but you just need to own it by the ex-dividend date. And it's all or nothing.

Correct. You can buy the day before the "ex date" and sell it the day after an you're still going to get the whole dividend.

There are actually websites that publish all that data and traders the trade just based on trying to capture the dividend.

Thanks Greg, appreciate the input

Denton

This is why I like dividend investing so much... I DO NOT own this particular stock -- but will use this as a nice example of getting a RAISE without even asking for one! Here Goldman Sachs has just given its shareholders a nice .44 cent per year gift. That's real money - and if you have several companies doing this you can not only keep up with - but you can beat - inflation. For someone like me that is retired - this would be the equivalent of getting a pay raise! :D

Typically you will also see a share price increase when a company does this as well. A double bonus!



Goldman Sachs (GS) said it would raise its quarterly dividend to 46 cents per share from 35 cents.

I should add that the reason I don't own any Goldman Sachs (GS) is because of the paltry 1.18% dividend rate. Not to mention they also have a horrible chart. Remember that I always look for TOTAL RETURN -- and the TR on GS is negative.... for the past 5 years... I just felt the dividend raise was worth pointing out because these kinds of events are important and really help over the long haul.