You never have to rush to put money to work. The stock market as well as other markets are open rather frequently. :D

Waiting for some "event" though - is generally not a very good long term strategy. For whatever reason - the market will run to the moon while you're waiting -- and then too - let's remember our time frames. If the market runs up 8% while you're waiting -- and then goes backward 10% -- do the math and we're not talking about a very large amount of money.

I had to laugh to myself - because some of you "think" like you're playing with millions of dollars and that 50 cents per share is going to make or break whether or not you have a profit/gain.... I had this same conversation with my trainer the other day. He asked "what should I be buying" because he had 10K ready to add to his account.... After a couple suggestions his next statement was that he'd watch the market and jump in on a pullback... So I grabbed pencil and paper and did some math for him. My basic premise - which was to rub his nose in his statement (since he kicks my sorry ass all the time) - was to make him realize the nonsensical point of his waiting. We're talking about someone who is going to scale in - and be buying 100 shares of something... a 1 or 2 dollar pullback was hardly worth the "wait". If he thought that a buck or two was important in the scheme of things.

Now --- a big pullback --- 10% or more... IF === HUGE IF === you're LUCKY and can catch that. Fantastic! But my guess is - when the market pulls back 10% -- you'll wait for 15%.... and so on.

Just saying.... that even myself - for an example - where I'm buying 10,000 shares or more at a time... I'm not waiting. Having said that - this next week with the sequester thing coming up - MIGHT BE - MIGHT BE - worth a wait. But we all know what can happen. The idiots do some kind of a "fix" and the market runs instead of falls back. Thus the age old problem of timing. It rarely works the way you thought. I hate that little man on Wall Street!:D

I read all articles like this with a bit of "jaundice".... because most writers have an axe to grind or an agenda of some kind. But if you read stuff like this and figure that some of it is actually CORRECT... it's just generally beneficial and particularly if you're NEW TO INVESTING. Because you haven't had the TIME to actually live through the ups and downs of a market -- and you may begin your investing life with many pre-concieved notions.

We have talked about rising interest rates and there direct correlation to the stock market. The generally accepted rule is that when rates rise - money comes out of the market - and goes in to interest bearing investments.

The problem with that is that it doesn't GROW your money... yeah you get the interest - but you lose the growth... and high rates are also when we generally have high INFLATION... so while 10% looks good on paper... it actually isn't.

Anyway -- Here's a "myth busting" article that has facts. Remember please -- the market rarely ever does what you think it will/should.... and all we can really do is ATTEMPT to have a better understanding of "things".


http://seekingalpha.com/article/1223...g_income&ifp=0

A few weeks ago I bought a few shares of Sturm, Ruger (RGR) they have a 2.8% yield, so I scalled in a bit. then it took a nice dip when all the teachers unions started to divest out of weapons and ammo. I bought some more on the dip. Today they reported there 4th quarter earnings.
They basically blew past analysts expectations. The stock has had a nice bump up today and its up even more in after hours trading. Oh and they also raised its dividend.

http://buzz.money.cnn.com/2013/02/27...ce=yahoo_quote

http://www.reuters.com/article/2013/...etsNews&rpc=43

Too bad you missed the SPECIAL DIVIDEND ($4.50 per share) paid back in December. You don't see that very often!!


Nice purchase by the way!

Be careful of this though, with Sturm Ruger (RGR).... this is a VARIABLE dividend. I'm only bringing it up here because of the investing 102 aspect for knowledge....

The Company also announced today that its Board of Directors declared a dividend of 40.4¢ per share for the fourth quarter, for shareholders of record as of March 8, 2013, payable on March 22, 2013. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.



You could be a big winner -- ala the special dividend paid back in December -- or the idiots in Washington DC decide to do something stupid regarding guns and it puts a big crimp in sales for a couple quarters. However... this appears to be a well run company - has a great quality product... and appears to be very shareholder friendly. Those are all good qualities to have in any company!

Yeah I saw that, can't win them all.

There is also only two ammo manufacturers that pay a dividend, I was thinking about jumping in some of that also.
Here is why

http://granitegrok.com/wp-content/up...ammo-shelf.jpg

Just be certain you are well diversified!


The gun and ammo industry is under attack - to put it mildly... the wild sales of the last quarter prove that... What we don't know is what the whack jobs will cook up for the future. My guess / gut feeling is - little change in the long run... and in the meantime it's record sales for the industry.

Here is an article, it mentions one of the dividend paying companies ATK.
Basically its going to supply the department of homeland securities for the next 4 years. 450 million rounds. The article brings up another point why is the DHS buying BILLIONS of rounds of ammo.

http://www.infowars.com/dhs-purchase...-of-ammunition

I think i'm starting to get diversified.
F auto
FB social
CHD sex and cleaners
RGR guns
thinking about adding some OLN or ATK

Oh yeah -- the perfect portfolio Bob! Sex - guns - ammo - drugs.... and alcohol and cigarettes! All of the basic needs!


HAHAHAHAHAHAHAHAHAHA



Just kidding of course.

A good article that makes some very valid points. The only one I'd take issue with is the statement about the writers personal investing where he says he only buys stocks he thinks are undervalued (that generally means out of favor - or that nobody else likes them enough to lift the price). I don't personally like to think in those terms. Why go out of your way to find stocks that nobody else likes? Buy stocks in companies that you THINK have a chance to make you some money. That means more buyers than sellers.

Regardless of that point - it's worth a read if only for re-inforcement of basic principals.

Remember that - no different from my own "blogging" here -- these are just one persons opinion. They should all be taken with a grain of salt -- and are just "things to think about".


http://seekingalpha.com/article/1235...g_income&ifp=0

Good article!

It makes sense what you're saying about "why go out of your way to find stocks no one likes." As a small-fry investor, how can I expect of myself to out-think the think tanks on Wall Street and find something they don't like yet. You may get a lucky 'hit' every now and then by getting out in front on an 'unloved' industry...but over the diversified long haul, it is very hard to beat this industry. The best thing we can do is include ourselves in its best parts I suppose?

Another good article -- some of which states what most probably already know... but there's some decent info to think about here... Particularly that last line or two! :warning:



http://www.nbcnews.com/business/cant...yths-1C8601858

While this is not a TRADING thread -- nor am I a trader... I am "market aware" which to me is completely different than just the itchy trigger finger -- or just buy and hold and forget. As such I read A LOT -- and I listen A LOT....
And I look around at lots of various factors. So when I hear that auto sales have hit records - and housing is making a major recovery... and that the talking heads (TV people) are all talking about the RECOVERY rather than the depression, this signals a shift that I need to pay attention to. My friends are all talking about trips - and or - what they're buying or planning to buy. Thus the selling and discussion about selling this or that is over. Yippee is all I can say about that!

But what does this tell me about "the market" and or what I'm invested in. I've had a fairly large position "parked" for months now in JNK bonds... and this pays a great monthly dividend so it's been good to say the least. BUT a holding like this will get clobbered in share price (which would actually raise the dividend percentage if you buy at the lower prices) which would not be a good thing given the amount I hold. I want to be AHEAD of any such drama... and as I've preached here again and again -- I want to SCALE OUT of a position. So this morning I sold 1/3rd of my position. It (JNK) went ex dividend on 03/01 - so I get this months dividend (paid on the 11th)... I've got nice capital gain % in the name as well as collecting that magic dividend.

What I'll buy is yet to be determined. No rush. I'm shopping for a new position not adding to existing stuff. What I want is something that WON'T be interest rate (a rise in) sensitive - while still giving me a good dividend but that might also do well in a "good" economy.

Annaly Capital Management (NLY) is another candidate for scaling out of - although with it's much higher dividend % -- I'll scale out a bit slower... maybe 20% of the holding at a time. My position is not as large but it's certainly interest rate sensitive so I've got to keep on my toes. If the FED even hints that rates are going to rise -- or that they're going to start to reduce their Treasury purchases ---- Rates are going to start to rise. I just am trying to be "somewhat" ahead of that. Most likely - nothing will happen and I will be way early to that party. I'm okay with that.

I can't remember who posted here a couple weeks back (and don't want to spend the time going back to find it) -- and said they were on the sidelines WAITING for the market to come down so they could buy...

I remember responding with something along the lines of --- while you're waiting the market can run up rather than doing what you think it's going to MAYBE do. I also said though -- that with the whole Sequester thing coming up -- that who knows.... maybe that creates a buying opportunity.


Well.... Anyone see what the market has done SINCE the big mega event (NOT!) called the Sequester - which was going to cause the world to collapse? :lol: :lol:

Greg, you might be referring to me... I still lack the knowledge but most of all, I think, the capital to risk really. But even if I did, I still think I would hold back...

I ran across this, I thought it was interesting:

The last time the dow was here, October 11th 2007
Dow Jones Industrial Average: Then 14164.5; Now 14164.5
Regular Gas Price: Then $2.75; Now $3.73
GDP Growth: Then +2.5%; Now +1.6%
Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
Americans On Food Stamps: Then 26.9 million; Now 47.69 million
Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
US Deficit (LTM): Then $97 billion; Now $975.6 billion
Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
US Household Debt: Then $13.5 trillion; Now 12.87 trillion
Labor Force Particpation Rate: Then 65.8%; Now 63.6%
Consumer Confidence: Then 99.5; Now 69.6
S&P Rating of the US: Then AAA; Now AA+
VIX: Then 17.5%; Now 14%
10 Year Treasury Yield: Then 4.64%; Now 1.89%
USDJPY: Then 117; Now 93
EURUSD: Then 1.4145; Now 1.3050
Gold: Then $748; Now $1583
NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

:peepwall:

Ever hear the term -- The market climbs a wall of worry??


You've missed the most important "lessons" of this entire thread.... Not being an arse here. Just being honest.

Pick some of the best names that you know -- Home Depot - Phillip Morse - stuff like that - then pull up a 10 year chart.... and tell me at what point YOU would have thought it was okay - or not - to get in.

That's the point of this entire thread. LONG TERM INVESTING.... not in this week out next month... buying dips if you can - and if not - don't friggin' worry about it 5 years from now you'll be ahead -- by a long ways.

Im new to the forum, I spend all my time over at pro-touring and just recently found this place.I have a question for you guys and sorry if its been asked im only on page 25 of this thread at the moment and the great thing about this is because of this thread im ready to get back into investing. 10 years ago when I was 20 and single and in the military living in europe having the time of my life with no bills and no worries I thought I could become rich being a day trader and I blew 1000's and 1000's trying to do that. I lost it all in the long run and havent even looked at stocks since then. Now Im 30 married with a house and a stable job and its time to start investing and this thread is great.

Here is my question, I make alot less then most on this site and pro-touring, but its all relative really. I have all my bills paid off and I have 6 months of pay saved up for emergency. Only things I pay are house payment, health insurance and car insurance. I pay 10% of my paycheck to my works 401k and they add 5% on top of that.I feel that this should be enough for what i need for retirement but i would like some wiggle room. What should be my next step for investing, they rule seems to be to max out your 401k, but for me that wouldnt be possible giving the cap for that. Should I be aiming to pay the house off early my rough numbers say i could pay it off about 10 years sooner making me about 50 years old, or should i be putting money into a roth IRA, or should i be doing what greg suggest and do the dividend stocks.My thought would be the stocks as the compounding interest should pay off in spades 30 years from now giving me a very plush retirement.

What is the interest rate on your home loan?

If you and your wife make less than $150k combined, you can put your money into a Roth IRA. I would do that. With Vanguard, you can pick your stocks or chose a mutual fund. That's who I have and I've done both with my account in case I choose my stocks poorly.

Regardless of what your interest rate is on the home, a simple way to help pay it off quicker is to take one month's payment and divide it into 12. Add that amount to each month's payment which will mean you'll make 13 payments in a year. I can't remember the number of years you'll pay off the loan quicker doing this but it's significant. I personally will do this even if I get a great interest rate. I simply hate having debt.

Oh, and welcome to the forum.

#1 -- Welcome to Lat G --- the BEST PT site...

#2 -- Glad you found this thread!


Sounds to me like you have your act together pretty good! So kudos to you.


I'm not a finanacial planner -- nor (I don't think) is anyone on here a professional investment advisor... this is just a good "Starter" thread that give people some stuff to discuss and think about.

Here's what I'd think about if I was in your shoes.

Max a ROTH IRA if you can....

If you have a FIXED RATE mortgage... and you'll be a reasonable age when it's paid off (some time before or at retirement) I wouldn't rush to pay it off. You're fixed rate mortgage will be mighty cheap 10 years from now... and if we're all lucky -- returns should far outstrip the interest rate on your loan. That's the "theory" anyway.

Now for that 401K at work.... It's not nearly as important how much you're putting in (and the match) as it is WHAT IT'S IN! Pay attention to that! You'll read here about Mutual Funds --- and you really need to have your money going into good ones -- because there's a 100 that SUCK and a very few that will get the job done for ya. So look into that.

Six months of savings is plenty in cash for rainy day fund.... so now it's time to start INVESTING... and keep reading this thread and you'll catch on real quick!!


:thumbsup: :thumbsup:

I have two very low rate mortgages... and I round them both up every month... for the very same reasons you state. I just don't like mortgages. But I also know that at the rates I'm paying (I borrow cash on cash)... it's just flat ass stupid to do what I'm doing.

As you all know I'm in a different "place" investment wise... and don't have any reason whatsoever to "save" any money... but I still just can't stand "owing".

Thank you for the reply greg, i do have a fixed rate on my house, its fairly low at 4% and i do round up on the payments. I couldnt stand to owe money anymore and i decided it was time to do something about it. The 401k i have is a government TSP account, its not great but i watch it alot,in the 5 years ive had it is has averaged 11% in returns but its a fund account and that makes me a bit worried as i have no control over what they put in it, there isnt much to pick from with the different plans and it being something tied to the government I always fear it will just go poof one day and be gone.

I figured having a house payment is unavoidable and I will prolly have it paid off in my mid to late 40s. I have give or take about $200 a month to put into a roth IRA so I wont get it capped either at this moment but at least this money was cash I was throwing away in interest for all the stuff I owed money on.

Its a shame I didnt read something like this 10 years ago, everything you have sad not to do was stuff I have done and I didnt know any better at the time. Alot of stuff I have read for investment advice I think is wrote by people making well over 100+k a year and I live in the midwest. I think average wage in Iowa is 35-40k a year so I dont know anyone that makes 100+k a year so its kinda a guessing game as to how a person should divy up their money to be well protected when investment caps cant be meet.

Wanna make yourself sick??

$2,000 a YEAR saved from 21 til you're 31 -- never add another dime to it - will net you a MILLION dollars at retirement (given about a 7% compounded average return)


Don't start saving until you're 31 -- put $2,000 a year away til you're 65 and you end up with about $600,000


HUGE difference in retirement income right there!!


Want to really be shocked?? You should have started saving at 19.....
Check out this investing page for KIDS!!


http://kids.daveramsey.com/index.cfm...ContentId=4509

Yeah im already 30, i woke up one day and said enough of this crap its time to get serious, went and got a part time job and paid everything off, ill prolly work the part time for another year or two till the wife starts popping out kids just to get caught up from all the fun i had in my early 20s, and it was from reading things about how much money you can save by starting in your 20s instead of your 30s that got the ball rolling for me. Like I said its a shame I didnt read something like this when I was younger, I wouldnt of blown all that cash trying to be a high roller.

Make your house payment and no more. Put the $200 and any extra into a Roth IRA. That's what you can do and have a good impact on your retirement. The other thing is to keep your spending levels low even when your income increases. Basically, live below your means.

With the stellar run the market (stock market) has had for over a year now... I've had several people ask when they should take some profits. It's a great question - especially since one of the best market quotes is -- Nobody ever went broke taking a profit!

However... We must also use our heads and adjust these kinds of blanket statements to "our" personal situations.

For someone such as myself... who's already "set"... and who has very large (compared to most) positions. Taking a gain is how we buy stuff - how we re-invest in other stuff... and how we make a living. But let's put this into perspective. If I have a million dollars in one position - and it's up 25% - that's a $250,000 gain! So If I sell 100K of that position (pure gain) - that's "real money". A 100 grand is a 100 grand. I don't care who you are.

But let's look at a more normal situation and strategy/thought process. The basic premise of LONG TERM investing is to buy dividend paying stocks - having the dividend automatically reinvested to buy shares and parlaying this over a very long time to build up the number of shares owned so that upon retirement - you'll have enough that you can start using that dividend to live on. So..... how are you going to get there if you sell some off every time you have a 20 or 30 or 40% gain?

Let's remember the long term goal is TOTAL RETURN. When you look at a purchase -- we're supposed to research this as part of our strategy right? So if you look at this... we want to use the long term total return of any given stock --- usually 5 years. If the 5 year TR is 100+%.... and you're asking about selling to take a gain when something is up 40%.... how are you going to double your money in 5 years. That 40% rise is PART OF that overall gain we need to get set long term. Think of the market as a set of stairs.... they go up - they flatten out - they go up again and so on. So if you go back and pull up a long term chart of a stock -- you know - the one you relied upon to make a buying decision... go back and look at that same chart and see when you would have "taken a gain"... My guess is -- unless you're the smartest man in the universe - any time you'd have sold -- the stock would have continued to rise AFTER your sale. Now -- had you been brilliant - and been in the market prior to 2007 -- and you sold at the top -- and then been brilliant enough to have gotten back in at the bottom of 2009... then okay -- we could argue that you "should have" done all that. But my guess is... none of us is that f'n lucky. One or two might have even done that with housing - but "most" didn't - and in fact - many more did just the opposite - they bought high and sold low.

So let's get back on track here.... It's dang hard to see a nice gain in either dollar terms or percentage terms -- and not start thinking about "making some money". But if you "only" have 100 or 200 shares of something... let it ride... There's nothing wrong with 20 years from now looking at your account and that "gain" you were going to take -- is now 800% and paying you a nice check every quarter. That's what we're after here.... You'll never get there is you're thinking is the here and now.

Does this make sense??

Greg it definitely makes sense, especially since like you say, when the price is slumping on your stock, your investment is buying more shares, so it's better to look at it like a stock going on 'sale' rather than losing value for us long-termers.

Where I get hung up on regarding not "taking a profit" is that my portfolio is about 60% dividend stocks, but 40% in 3 mutual funds...they all move in direct correlation to the market. Given this "triple top" where the S&P hasn't done anything for 13 years except grow skepticism, that's I think where this sentiment is coming from.

I believe strongly in the dividend stock strategy you are teaching us, but it's my Funds that I worry about on total return...am I talking myself out of Funds completely?

Steven --- I wouldn't put 50 cents into a Fund...


Funds are just fees for management... there's not a single reason in the whole wide world that a semi intelligent individual can't do every bit as well as any fund and should do considerably better. A fund is just a dumbed down blended basket of stocks... sadly -- in their effort to be broad based... the laggards drag down the performance of the top. While the "Top 10 Holdings" are usually stellar --- they're only the top 10 and the fund probably has 100 or more holdings. It's those that dumb down their returns.

When you factor in their mediocre returns -- and then compound what they're fees do to YOUR returns over time - it's astounds me that anyone in invested in them. It's just that they are "available" via retirement IRA's for most folks -- they pick them by throwing a dart at a list -- and then work for 30 years and wonder what the hell happened to all the money they put in. :disgusted:

If a person can buy or build their own little basket of stocks --- 10 minimum and 20 tops... you can kick some azz all on your own just by buying the best of breed stuff we discuss here so often. It isn't rocket science that's for sure.

You're making sense, Greg.

Good!


People hear about all these terms and sayings and things they should be doing... i.e., "taking a profit".... but if you're got 10K invested and have a 2K profit -- that's GREAT but you don't need to take it...

Even if you have 50K and have a 10K "gain" ---- great! But let it ride. If you don't - you won't get to 100K which is where you want to be heading!

If you have 300K and have a 75K gain... you might take 25 or 30K and buy another name with it.

One of my favorite sayings is "better lucky than smart". I firmly believe that little nugget. I know LOTS of people that are way smarter than I - but they've never been lucky.

So with that said --- I'd just posted about whether or not to take your gains and try to rebalance your accounts etc. and here comes an article in SeekingAlpha that has actually charted this. What the author has done is to calculate the net of doing a DRIP (dividend re-investment plan) vs taking the dividends and trying to buy the shares at lower prices etc...

I'll tell you without reading the article yourselves -- the DRIP beat the other methods. What I really want you to see is the beginning investment --- then seeing the net at 5 year - 10 year - 20 year... SO what I really want you all to see is how much money GROWS given some time. That's the main crux of all my posts!!


In the END -- i.e., the last 5 years of the 25 year calculation -- the withdrawal and reinvest method was a whopping $801 ahead of the DRIP (automatic) method. That is more LUCKY than anything else... because we all know that most of us wouldn't be as "calculated" as this little test was. We'd forget - or we'd switch gears - or whatever...

http://seekingalpha.com/article/1261...g_income&ifp=0

Good info! I have no intention of taking any "profit" out of my accounts until I retire. Even then, I'm only going to take what I need and keep the rest invested. I look at it as a continuation of living below my means.

I must have told a 1000 people -- that retirement isn't how much money you have it's about what you need -- so keeping overhead low is a great thing. Not many folks get to just retire and do whatever they want to.

The part most folks don't calculate is how much they can MAKE off their retirement nest egg... and in normal times -- it takes a million bucks to produce 50K in income.... Then you factor in the "4% rule" which says you can take 4% of your principal out per year... so now we're up to 90 grand and that's if you have a million bucks put away.

90 grand sounds like a lot --- but my guess is the amount people are making per year now -- sounded like a lot when they were in high school. So if we add 25 years to retirement --- and then plan to live 25 years AFTER retirement -- that's 50 years of inflation to account for.

Take your income now -- and compound 3% per year on it -- and see how that works out.


50K now -- needs to be 104,688K 25 years from now with that 3% interest rate! So that million bucks is just about what you're going to need. Making 150K a year now?? Ya need 3MM!!

Wanna live like you're rich?? 20MM :lol:

BTW --- Somebody was talking about paying their mortgage off early etc...



This calculation website has just about anything you can calc!! Including what it takes to pay off your mortgage early etc... you just fill in the amounts and press the "easy" button.


http://www.calculator.net/mortgage-p...l=500&x=55&y=8

Good article about Charlie Munger (Berkshire Hathaway === AKA Warren Buffet)...


http://seekingalpha.com/article/1263...g_income&ifp=0

McDonalds (MCD)
 

I know that many of you probably bought McDonalds a few months ago - perhaps near it's high of around 100... and then watched as it died the death of a 1000 cuts and drifted down to 85ish... and you were probably kicking yourselves!


What I want to point out here is that while you were busy whining... you should have been adding to the position (I know most can't be following this kind of stuff as the funds just aren't there YET)... because here it is back near it's high... a nice "stealth rally" in the name.

The other thing I want to point out is --- TIME... all it took was a little time and boom.... back to where it was. No need to get all nervous and sell --- (the old buy high and sell low trick). In the meantime you were collecting that dividend and hopefully that was being re-invested at these lower prices.

A PERFECT example of how this all should work!


:G-Dub:

I happened to be one of those people.. lol. i wasnt worried though. but i was able to add a little bit to my position with some extra funds. I think we had discussed that here before i made the additional purchase. :) :thankyou:

Also, after completely restructuring my 401k into funds *I* researched and picked (rather than just throwing darts at, lol). I'm all back in the green again by a couple %. So the little man on wall street went and found someone else to bug. heheh

Albert!!! You are DA MAN! buddy!

So easy a caveman could do it!!


:trophy-1302:

I bought some MCD at $98 and I sold some of my NLY and bought some mcd at $88

:trophy-1302: :trophy-1302: :trophy-1302: :trophy-1302:

I sold the rest of my NLY last week and added to my NNN.