A reminder to the newbs of investing....


You get up and the "market" is down 100 points... and your stocks are down 1 or 2% - IT'S DAYS and WEEKS like this that will make you thank yourself for investing in DIVIDEND payers. Because the dividend doesn't go up and down... it keeps paying you every quarter.

Actually -- in all honesty -- it's good that the market is down -- because your dividend will be re-invested at lower share prices - thus buying you more shares!

Think LONG TERM.... 10 / 20 / 30 or more years. Even if you retire at 65 - you're not going to die the next week! You're going to live another 30 years - and those dividends will just keep supporting you.

First thing this month AT&T (T) paid me $6600 bucks.... That's real money - and every 3 months they'll have to write that check - and I'll thank them and cash it. :woot:

I wouldn't pay ANY attention to any of that kind of stuff. That's "trader talk". You're an INVESTOR. LONG TERM.... so a few percent one way or the other won't affect your total return in the long run.

Having said that - August is a good "bottom". And it depends on your question if your asking if now is a good time to SELL.... vs buy. Typically the market sinks through the summer. So BUYING sometime in the summer usually, on average, works out in the long run.

Remember the longer you wait to "do something" - the less time you have for compounding. Go back and look at the compounding posts -- IT'S NOT THE FIRST DOUBLE --- IT'S the LAST DOUBLE - that counts - and that means you have to be EARLY in order to get to that last double. That is YEARS away - so does a few days or weeks make much of a difference -- YEAH if you're buying dividend payers... because a dollar now -- might be 1000 dollars later.

good point.. your right. a few % over the next couple months (ie. til fall) wont make that big of difference compared to not being in at all.

I need to put my big boy pants on and tackle the 401k. It makes me nervous as hell as there is SOOO many different choices, plus "diversifying" (i guess that makes me the most nervous). what % should go where. :_paranoid

It should make you MORE nervous to have money sitting not growing or not paying you!

Stick to basic rules for diversifying. If you have 100K - 5% per investment
if you have 10k - then a couple thousand per name. Somewhere in-between if you have more or less.

If you have 100K -- finding JUST TWENTY great companies is the easiest thing you'll ever do!


:cheers:

If i could do individual stocks, i'd be MUCH more comfortable... but these are all mutual funds., which is what makes me nervous about diversifying it.. Ive been on schwab and see they suggest a certain % in large cap, small/mid, euro, etc. but it seems the Funds all overlap.

Not only will they overlap -- but they'll suck as far as total returns go. Mutual Funds are the great "average". They're killing Americans appetite for investing.

However....

I'd look at the crappiest performance THIS YEAR -- like EURO funds.... they've gotten killed -- so should have low NAV (net asset value) -- that will give you diversity (International) and you know that europe isn't down and going away - so they could come back a lot over the next 5 years once they get their act together.

Depending on your age -- I'd go for more growth and income over just growth... growth is a gamble -- if you're going to gamble on growth - at least get some income along the way.

I also like big cap in a retirement scenario -- they pay dividends - they're safe - and as we've shown over and over here - they also have mighty big TOTAL RETURNS over time.

The thing about mutual funds -- they're just giant baskets of stocks. So beyond the top 10 holdings -- you've just basically taken you money and put it in a savings account. A placeholder. If the market goes well they do well - but you're just along for the ride.

Nothing inherently wrong with that... it's just not going to allow you to get very much return or get you excited at how smart you are! :D

Spent a bunch of time reading the thread and researching some companies. Have a list together now of stocks I'm going to buy once I dump my Mutual Funds out the window. Thanks for all the help and suggestions everyone, this is really interesting stuff, to research and learn and hey if you can make some money doing it that's a bonus.

Awesome! good luck! let us know how they turn out :D

okay slow day at work today so i am going to try and set up my Schwab account. I remember seeing a commercial that said to "Call Chuck" when i was in college so i decided to prank call them and demand i speak to Chuck. Needless to say they were not as enthuised as i was about the call, so hopefully im not blackballed! HA!:cheers:

LMAO I did mine on their website. If you setup the Investor Checking (i think thats what it was called) it came with the Investment brokerage account free. Otherwise you have to drop $1k minimum to open the brokerage account or something like that.

so, you can really get the Schwab tools for free doing it this way too. :)

Yeah -- there's probably a few to many posts -- but it's okay.... unless you're trying to catch up!!

Go get 'em!!

Greg.. do you use "F.A.S.T. Graphs"?

Was reading a bit about them this morning, from an article on SA.

I guess it might be a step above Investing 102 tho. lol.

No I don't. I really don't use anything like that. I read a lot - I pay attention - I watch CNBC - but mostly I only invest in stuff just like I've been preaching here in Investing 102. Other than BONDS which are held in a smallish brokerage where I have a SVP handle that part.... I do my own stuff. But I've been doing this since the late 70's... and I own an apartment complex and some commercial real-estate. I'm really a pretty simple guy with pretty simple investment strategies. It's the experience of having lived thru many different kinds of markets that has taught me to just buy great companies - collect the dividend - kick back and enjoy life. I don't like to make it too complicated. So far - it's served me pretty dang well. :cheers:

Just curious. from what i can tell, its just another "aid" to help decide when to pull the cord on a stock based on its current price vs its average price (ie. is the stock on sale today or overpriced).

Not a bad idea if you've got your eye on multiple stocks and waiting for the funds to purchase them. Like i am. 1k at a time. It might persuade someone a little bit to buy X stock this time around vs Y stock as its historically 10% cheaper than it averages... or something along those lines anyway. lol

Mainly catching up. Thanks for all the help so far the prospect of making some smart moves now that will pay down the road is very intriguing.

I agree on the "aid" part. Investing is "whatever" works for you to make you make a decision and helps you find good stuff -- or helps you refer to why you bought what you did. I just don't need much reference to buy stuff like Coke and McDonalds and Phillip Morse and Kimberly Clark... if you get my point.

So I get asked all the time if I own Berkshire Hathaway shares... the answer is "HELL NO"... and people are shocked. Obviously they know the name and the famous DEMOCRATIC midwesterner Warren Buffet and they think he's some kind of a god or something and I just think he's an old smart guy that doesn't really understand the stock market. :unibrow: :D

This stock is over a hundred grand per share.... and DOES NOT pay a dividend... and has a whopping 11.6% TEN YEAR growth. REALLY -- 10 YEARS to get 11.6%???

Not in my portfolio! I get 5% per year in dividend off of simple names... and when you do the total return comparo -- there's no way you'd buy this stock. The 10 year TOTAL RETURN is 10.6% ---- WOW!!! And not WOW in a good way!

If Warren wakes up dead (that was meant to be funny).... you're going to be down 10% plus or more -- so would you risk that for a 10 year total return of 10.6%??

LOL --- DUDE! You have to be able to fly a private jet if you can just afford to buy one or two shares of this pig in a poke! The funny thing is -- it's mostly just a holding company... I mean - really - if you want to buy Coke shares -- buy coke shares why buy Berkshire and THEY collect the dividend! You get nothing!


If you do the math -- take 100 Grand (one share worth) and get a 4.5% dividend reinvested.... that's 4,500 year one - now you have 104,500... and your next year you get 5,000 -- now you got 109,500 and so on... do this for 10 years and you've doubled your money (you'd have 200K) AND you're getting 10K per year in dividend. With BRK.A ---- you'd have your original investment and 11% or using our 100K cost basis - you'd now have 111K.... and NO DIVIDEND.

Sorry -- I just don't get it.

I love him! He's so smart... and he seems to be just a genuinely good guy! I hate his TAX POLICY -- he's clueless that way and if he thinks he should pay more taxes - then he should just write a dang check! :woot:

Facebook IPO
 

Greg et all,, anyone have any thoughts on the Facebook IPO?
28 to 35 is the offer... was thinking of jumping in,,

If you could get it for 28 to 35 it would be great! My guess is it bids to 80 before a "retail" customer gets any.

I'm not buying any -- but it's only because I just don't need to bother with that kind of an investment. That's not to say others shouldn't.

Greg, I need to thank you again. By looking at this thread, it made me think. I made $25 on a dividend, and paid cash for home repair, truck repair, and other odds and ends. Even had a little left over.

Thanks, and the next dinner is on me.

So here's the deal ---- we all get into a grove -- and one of those groves is NOT saving any money - and what happens is -- all of a sudden years have slipped by and we still aren't into the saving mode... I can tell you that at nearly 60 years old - how fast time has gone by! OMG! I was just 20 something!

So good to hear you are jumping all over it - because it's that same father time that makes that $25 dividend turn into $100's of dollars. :cheers:

Very interesting information for INVESTING 102.... at Berkshire Hathaway annual meeting - Warren Buffet was "cheering stocks DOWN"! Why did he want the DOW to move DOWN?? Because on Friday he put 60 million to work - and planned to put more to work early this week and he wants to "get more for my money".

That must explain why he's one of the worlds richest men! He's BUYING when the market is DOWN. He actually understands the OVER TIME - if he buys when the market sucks - that he will be rewarded long term.

I've been cheerleading this "idea" for this whole thread...

Of course everyone "waits" for the perfect time to "get in". There really isn't any good answer or signal or news that you can say "now is the time because it's not going any lower".... so this is not what I'm trying to say. What I'm pointing out is that when you see a stock you like -- and the market is down -- don't be afraid to pounce! Will it go lower. Yeah! You can bet on it. But if you've been watching a stock and it's moving higher and higher and all of a sudden the market is selling off you need to get a mindset that says "GREAT" I'll buy some! It's on sale!

Be like Warren Buffet!:woot:

Pretty good list I found looking around about dividend stocks:

http://seekingalpha.com/article/4634...-paying-stocks

Good list Erik!

The only problem I have with it is that it's TOO conservative if a guy only owned those big cap big dow names. The yield on them is just not enough - which is why I pitch -- offset some big cap dow stuff like McDonalds and Coke - with a name that pays 6 or 7%.... and has a bit more risk. If you don't do that - you end up with a portfolio paying 3% or less - and that won't keep up with inflation. It'll grow - and it'll be safe - ya just need to be somewhere in the middle... Too safe is where old guys like me reside. :D

Your not that old yet

I used todays weakness in McDonalds to add a 1000 shares to my position.

I also found an interesting dividend/income/growth play (I bought 10,000 shares) in Black Rock Limited Duration (BLW) that pays a monthly dividend of 10 cents... which is currently 7+ %.

Remember I'm retired -- so income generation is my goal. Each of you have to temper your investments to your own goals. However, INCOME - even if you don't need it NOW - can be reinvested. So just because it's income for me, now, doesn't mean it's not a good investment for someone just looking to grow their portfolio.

Guys, checkout DOMK, it was .67 a few weeks ago, now over $4. They make solarpowered case for ipad, iphone, and fire. Ipad case comes out in less than 1 month. The company has no sales at all but I think it could be a good stock to make some quick money.

I've been following them for few months now, and the last week its been crazy, shooting up to 52week high in the first 15mins of the day then coming back down to "normal". Will be neat to watch it as the product launch gets closer. My guess it will tank after earnings come out, but who knows.

Maybe we should start a "GAMBLING 102" thread... because that's what this is. It's not investing. :lol:

The next several weeks will show you why you want to own stuff that PAYS you to own it!

Remember too - all you newbs out there.... that when we say Sell in May and go away... this is a historically week period (summer)... and that actually works in your favor if you're re-investing your dividend or plan to put more money to work. If you re-invest - you'll buy more shares - which pays off later - and if you've got new money - you can put it to work with cheaper prices.

Personally I've always come into this period with a nice cash position waiting to add to my portfolio - and it's almost always worked out beautifully.

The other things you'll see is that people tend to sell their WINNERS -- so stocks that have had a great run (profit) get sold the deepest because it's so easy just to skim some off the top. People tend NOT to sell the losers... they hold them. So you'll see the biggest haircuts in the biggest winners.

Pay no attention to that noise out there... it's trader talk. You guys are INVESTORS! :cheers:

Awesome news, as I'm researching as we speak getting ready to buy, buy, buy. :thumbsup:

Amen Mr.Weld..:cheers:

Cash/Dry powder is king right now..

I expected this to happen and no worries here.. I plan to put more cash to work..

There are Traders....And there are Investors.. I too, am an Investor..In for the long term..:cheers:

The slight change in my Balance means nothing ...Seems like every time the crowd panics, I am adding positions...

I think I am physically getting better..I have to much invested to leave now...:lateral: :cheers:

that's great news Mike. :thumbsup:

Now we're talking!!



:cheers: :woot:

Thats the most important thing right there.... good news bud.


One the Investing side, next week i'll reach my next purchase point.. sounds like good timing to make that next batch go to work for me. :D :cheers:

Thanks guys..

Investing takes a back seat when your health is on the line, but the really COOL thing is I have everything in place, so it is on Auto pilot..

Schwab investments, cash on hand, Trust set up for the wife...So when I get bad, no money worries..

And I am not going out on my back...I will die with my boots on...And yes I have some family that want to get their hands on my money, but unless they are a No kill animal shelter, they may be disappointed..

I told them how to invest, they never listened..Hell they travel more than me, and drive nicer cars...But do they have money ? Heck no...Hocked up to their Eyeballs...And then they complain..

Not the way to roll...Even when I am real sick, I hoard Money/Investments...

Because, what if I make it to 80 plus ? I want to still be comfortable...

Funny Mike!

All of my closest friends have 2nd and or 3rd homes! I have ONE! My net worth is at least 3 times what theirs are (we've all compared) and we have the least expenses. Our income is kinda "fixed" (I fix it) -- and our outflow is totally discretionary... their income is fixed (they all still MUST work) and their outflows are mandatory!

Our way is a lot more fun!

Yes Sir...I am a small fish in a big pond, or a Big fish in a small pond...Not a high Roller at all, but I am amazed that i know some people that have 4 times the stuff I have...Total assets...But the column i really watch is the NET worth..

What I own.. If I have to hock myself up to my eyeballs to keep up with the Jones, or the Weld's, haha, I just won't do it..

The cool thing is my wife is on the same page...She has become pretty darn smart money wise...If not, we would have a problem.

So , yes, OUR way is much better, because if the economy turns south, It is not MY economy..

I am my own Mini country...I am CEO of Mikey's world..And that is all that counts..

Sure I want more stuff, who doesn't ? But I ain't gonna do it the wrong way..

Then all my talk of investing would be a lie, and peace of mind would go out the window..

Guys like you just inspire me to get to the next level and not just sit back...I got toys on my wish list...

I've been following thing thread fairly closely, first time poster. First off let me say thank you for all the great information and perspective thus far!

My first question is: what proportion of your assets would you recommend investing vs. locking away in savings account? I'm 25 years old, been investing for ~4 years with mixed success, have ~80k in the bank and 55k in the market. Have a work related 401k but haven't really been paying attention to that besides picking the "extremely aggressive" setting 3 years ago.

About 30k of the market money is tied up in some long term DOWN money (namely CitiBank). I have 22ish in cash left in my Etrade after pulling 50k out of the market and putting 25k back in savings.

Currently living in London, most recently from San Diego and would like to return there within 365 days and purchase a house (will eventually need a downpayment).

Need to re-assess what to do with my DOWN Citi, as well as find some better long term plays to put my money into. I like the feeling of having a year of net salary in the bank - but is that the wisest thing to be doing with that chunk of change? I realistically won't be losing my job anytime soon (effectively on contract through October) and have 3+ months of vacation that they'll have to pay me out. What would you guys recommend? I've been reading a lot in here about this dividend investing scheme and I'm quite interested. Seems like a good long term play for me to get into.

Second question: What to do with a 4 year+ 90% loser? I put $700 or so into some oil speculation penny stock and it's currently worth about $40 and hasn't moved in a year. Should I just pay the $9 trade fee and pull clean out that terribly depressing line in my account?

Thanks. Look forward to participating more. Keep this thread alive!

STD dividend reinvested yesterday at a nice low price of $6.1099. Looks like today it's going to open around $6.3x.... gotta love it!