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This is a big heads up.... and while the MARKET could be wrong --- it seems that the YIELD CURVE is headed UP. Which means that mortgage borrowing is strong because housing sales are strong.... and the FED seems to be signaling that they're going to or are about ready to taper their bond buying (QE - Quantitative Easing).
With the HUGE run up in CAPITAL (Share prices) we've had -- my guess is the big money is going to scoop theirs off the table... and start to buy other stuff --- which you'll start hearing the word "ROTATION". When you do the math -- the market has run about 17% this year (that's just giant given it's not even a half a year yet!).... So it doesn't surprise me that the fast money would be selling and taking their profits. If you've made 15% capital appreciation -- and you're trading millions / billions of dollars -- you start to sell the dividend shares (you get 4% - but you've made 15%) and ROTATE into shares that would deliver GROWTH in a better economy. But then what you have is share prices dropping --- but the YIELD goes up as the share price drops... and then you have all that cash that was "made" now has to go somewhere --- we can't have employees on vacation for very long - and that money lands somewhere. Think about a tree full of doves -- you shake the tree -- all the doves fly up -- and then they land back on the tree - but on a different branch. ++++++++++++++++++++++ Does this mean you should log in and sell everything and sit waiting for better prices? No probably not. Your dividend stream will continue -- it will buy shares at lower prices -- building your share count faster -- paying more dividend -- buying more shares. IF the market - thus prices - are high - your dividend doesn't buy as many shares - and you build shares slower. So in actual fact - you want share prices down... Remember that the dividend is paid in DOLLARS not percentages.... so provided the dividend isn't cut -- then the PERCENTAGE you're earning on those new share purchases is higher... the lower the share price goes -- the higher the percentage you're earning on your money. +++++++++++++++++++++++++++ I've been warning for awhile now -- to remember what it feels like to be in a market like this -- where every day you're up. That isn't normal - not normal at all..... But remember your goals! Your goals are 10 - 20 years away. |
Thanks GW, very interesting. I was reviewing our fund managers actions and it appears they sold off 30-45% of positions on an average last week.
05/28/2013 as of 05/23/2013 Sell 25,000 US TREAS NOTE 1.75%03/14UST NOTE DUE 03/31/14 $101.379 $25,394.30 05/28/2013 as of 05/23/2013 Sell 25,000 WACHOVIA CORP 5.25%14NOTES DUE 08/01/14 $105.258 $26,729.71 05/24/2013 as of 05/23/2013 Sell 25,000 GEN ELEC CAP CP 5.625%18MED TRM NT DUE 05/01/18 $118.104 $29,620.38 05/24/2013 as of 05/23/2013 Sell 25,000 BP CAP MKTS PLC 5.25%13FNOTES DUE 11/07/13 $102.103 $25,590.96 05/23/2013 Sell 50,000 US TREAS NOTE 2.625%14UST NOTE DUE 07/31/14 $102.9102 $51,849.80 05/23/2013 Sell 30,000 US TREAS NT 4.125% 05/15U S T NOTE DUE 05/15/15 $107.5977 $32,294.57 05/23/2013 Sell 25,000 TARGET CORP 5.375%17NOTES DUE 05/01/17 $116.249 $29,151.76 05/23/2013 Sell 25,000 A T & T INC 5.5%18NOTE DUE 02/01/18 $117.828 $29,892.69 05/23/2013 as of 05/21/2013 Buy 25,000 A T & T INC 5.5%18NOTE DUE 02/01/18 $118.337 -$30,030.85 05/23/2013 Sell 60 ZMH ZIMMER HOLDINGS INC $79.801 $4,779.03 $9.03 05/23/2013 Sell 150 XEL XCEL ENERGY INC $29.463 $4,410.42 $9.03 05/23/2013 Sell 80 WAG WALGREEN COMPANY $50.28 $4,013.38 $9.02 05/23/2013 Sell 95 WMT WAL-MART STORES INC $76.541 $7,262.32 $9.08 05/23/2013 Sell 250 TCK TECK RESOURCES LTD CL BF $27.112 $6,768.93 $9.07 05/23/2013 Sell 380 VOD VODAFONE GROUP NEW ADR FSPONSORED ADR $29.213 $11,091.80 $9.14 05/23/2013 Sell 60 TEL TE CONNECTIVITY LTD F $45.53 $2,722.80 $9.00 05/23/2013 Sell 140 STT STATE STREET CORP $64.633 $9,039.51 $9.11 05/23/2013 Sell 700 SPLS STAPLES INC $15.013 $10,499.97 $9.13 05/23/2013 Sell 750 LUV SOUTHWEST AIRLINES CO $14.103 $10,568.12 $9.13 05/23/2013 Sell 85 RDSA ROYAL DUTCH SHELL A ADRFSPONSORED ADR $67.521 $5,730.24 $9.05 05/23/2013 Sell 20 SLB SCHLUMBERGER LTD F $74.76 $1,486.22 $8.98 05/23/2013 Sell 100 PNC PNC FINL SERVICES GP INC $70.636 $7,054.53 $9.07 05/23/2013 Sell 250 RTN RAYTHEON COMPANY NEW $66.72 $16,670.76 $9.24 05/23/2013 Sell 115 PSX PHILLIPS 66 $65.21 $7,490.07 $9.08 05/23/2013 Sell 70 NSRGY NESTLE S A REG B ADR F1 ADR REPS 1 ORD $67.94 $4,746.77 $9.03 05/23/2013 Sell 125 NEE NEXTERA ENERGY INC $77.689 $9,702.01 $9.12 05/23/2013 Sell 475 NCR N C R CORP NEW $31.3738 $14,893.35 $9.21 05/23/2013 Sell 90 MUR MURPHY OIL CORP HLDG $61.78 $5,551.15 $9.05 05/23/2013 Sell 265 MS MORGAN STANLEY $24.323 $6,436.54 $9.06 05/23/2013 Sell 135 TAP MOLSON COORS BREWING CLB $51.316 $6,918.59 $9.07 05/23/2013 Sell 250 MSFT MICROSOFT CORP $34.293 $8,564.15 $9.10 05/23/2013 Sell 325 MRK MERCK & CO INC NEW $46.643 $15,149.77 $9.21 05/23/2013 Sell 90 LLL L-3 COMMUNICATIONS HLDGS $85.606 $7,695.46 $9.08 05/23/2013 Sell 135 MCK MCKESSON CORPORATION $117.093 $15,798.33 $9.23 05/23/2013 Sell 35 KSS KOHLS CORP $51.961 $1,809.66 $8.98 05/23/2013 Sell 230 JPM JPMORGAN CHASE & CO $53.261 $12,240.87 $9.16 05/23/2013 Sell 410 JCI JOHNSON CONTROLS INC $37.083 $15,194.82 $9.21 05/23/2013 Sell 65 HHC HOWARD HUGHES CORP $100.00 $6,490.94 $9.06 05/23/2013 Sell 300 INTC INTEL CORP $23.973 $7,182.82 $9.08 05/23/2013 Sell 40 HSP HOSPIRA $35.15 $1,397.03 $8.97 05/23/2013 Sell 150 HMC HONDA MOTOR CO LTD ADR FSPONSORED ADR $39.514 $5,918.05 $9.05 05/23/2013 Sell 80 HP HELMERICH & PAYNE INC $61.791 $4,934.24 $9.04 05/23/2013 Sell 230 HRS HARRIS CORPORATION $49.789 $11,442.32 $9.15 05/23/2013 Sell 450 GE GENERAL ELECTRIC COMPANY $23.563 $10,594.22 $9.13 05/23/2013 Sell 20 FDX FEDEX CORPORATION $99.171 $1,974.44 $8.98 05/23/2013 Sell 170 DVN DEVON ENERGY CP NEW $57.846 $9,824.70 $9.12 05/23/2013 Sell 70 COV COVIDIEN PLC NEW F $65.201 $4,555.04 $9.03 05/23/2013 Sell 420 GLW CORNING INC $15.582 $6,535.38 $9.06 05/23/2013 Sell 110 COP CONOCOPHILLIPS $62.6101 $6,878.04 $9.07 05/23/2013 Sell 320 COH COACH INC $58.323 $18,654.09 $9.27 05/23/2013 Sell 75 CB CHUBB CORPORATION $87.761 $6,573.02 $9.06 05/23/2013 Sell 25 CVX CHEVRON CORPORATION $125.221 $3,121.53 $9.00 05/23/2013 Sell 70 BG BUNGE LIMITED F $70.881 $4,952.63 $9.04 05/23/2013 Sell 60 BDX BECTON DICKINSON & CO $100.14 $5,999.35 $9.05 05/23/2013 Sell 75 BLK BLACKROCK INC $282.174 $21,153.73 $9.32 05/23/2013 Sell 245 BWC BABCOCK & WILCOX CO $29.6614 $7,257.96 $9.08 05/23/2013 Sell 355 T A T & T INC NEW $36.583 $12,977.79 $9.18 05/23/2013 Sell 200 ADM ARCHER-DANIELS-MIDLND CO $33.953 $6,781.53 $9.07 05/23/2013 Sell 125 AMGN AMGEN INCORPORATED $105.4212 $13,168.47 $9.18 05/23/2013 Sell 200 AET AETNA INC NEW $59.651 $11,921.04 $9.16 05/23/2013 Sell 85 ALL ALLSTATE CORPORATION $48.66 $4,127.08 $9.02 05/23/2013 Sell 125 MMM 3M COMPANY $110.006 $13,741.56 $9.19 |
Old saying in the market ---- "when interest rates rise -- the stock market dies".
Is it a zero sum game -- NO! Does it happen over night -- NO! When rates rise -- some money flows out of the stock market and into the new higher rate "whatevers" that compete for the world's money this week. It's been happening since the first market opened a gazillion years ago. |
yup.. quite the pull back for my divvy stocks today.. roughly 2%.
but, that also means that possibly my next CVX and ED divvy payments will be buying just a tad more of a share this time around thanks to the pullback since they both pay in a couple weeks. We'll see. a 2% pullback (just today) isnt going to change a whole lot on my paper gains. lol |
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I'd be prepared for about a 10% plus pullback --- because the market ALWAYS over corrects --- just as it shoots the moon on the up side... then people who sold start looking around and saying -- Hey! Now I can get 3% on JNJ (made up that example) and start buying again. In order to make money -- your money HAS to be working... it can't be sitting in cash. |
Best question -- EVER!
One of the guys asks me ---- So what do I do if I'm 40 and have 25 years to retire? What do I do if I'm 50 and have 15 years to retire? What do I do if I'm 60 and have 5 years til retirement?
To me -- this is the best question ever.... My response: What happens when you retire? Do you die? Oh wait.... maybe you'll live another 25 years! So your REAL TIME HORIZON is 50 years if you're 40.... 40 years if you're 50.... and 30 years if you're 60! That's the real way to think about it.... 'cause ya just don't up and die because you retired. Ask me how much more money I spend being retired than I ever did working. And ask me (retired some 22 years now) what things cost me 22 years ago versus now! Retirement isn't the end of spending and it isn't the end of you! Just keep doing. Keep doing what got you to retirement. In the old days -- they advised people to switch from stocks to bonds and blah blah blah... to which I've seen more than my fair share of people "out live" their useful cash flow. Had they stuck with stocks and real estate -- they'd have lived a whole lot better. That being said --- I don't invest in Faceybook -- or Netflix -- or any of the other "sure fired winners" either anymore. I stick to good old fashioned basics --- just like we've discussed here. You don't start (or continue) to gamble at 60 (which I'll be in August). But you don't up and die either! :relax: |
SO, I made my first purchase in my Schwab account this morning, and...
True to predictions, the stock immediately lost value! Good thing I'm in it for the long haul. Next challenge, locate enough Best of Breed companies for my IRA account funds. Steve O:G-Dub: |
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When that happens --- pull up the 5 year chart --- or longer if you can find one... and look at it. How far down is it on the left vs the right side.... and think about that TREND.... Now if you zoom in -- you'll see all the zigs and zags... Don't worry about the zigs and zags --- zoom back out and stare at the trend line.... TIME is your friend. Keep at it! |
The author of this article must be reading this thread....
He does do one interesting calculation which I've never even thought of - and that is what happens to the % if a company grows the dividend over time... Interestingly -- I've stated here many times -- that money doubles about every 10 years (based on a 7% interest rate/dividend rate etc). Well guess what? So does the dividend % if a company increases it at about that same rate! DOH! Read the article and it will make sense. Also note the small number of shares this "portfolio" is working with.... yet the important part to me is -- that the author has a plan -- is working that plan -- and he understands the market and what his goal is. http://seekingalpha.com/article/1474...g_income&ifp=0 |
I'm looking for suggestions...
I've spent some time looking for places to put my 'employees',
and find that my list is heavy on consumer staples. Can anyone suggest a few things that they have, or are considering, so that I can broaden my search? The list I have is: Philip Morris Coca Cola Costco Altria Kimberly Clark Nike McDonalds Consolidated Edison Southern Cos AT & T Johnson & Johnson Eli Lilly Merck Caterpillar Chevron Kinder Morgan National Retail Also, I would probably consider these steady-eddy type picks. I would also like to consider one or two that might be more 'exciting', so if you like a company that has some growth potential, I may have some room for a small share in something slightly riskier. Thanks for all the good info shared on this thread, and for the good things ahead! Steve O :popcorn2: |
Given that most of us are invested in dividend stocks, here's a website I found to be useful. Maybe you will too.
http://dripinvesting.org/tools/tools.asp |
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That's more than enough names to build a portfolio on.... All good solid companies. Don't spread yourself too thin. Summer is usually pretty "volatile" -- look for big down days and be ready to nibble away at the shares on those days. By September or October we'll know what the economy and the FED is probably going to do... so I wouldn't go all in... sneak up on the purchases. My guess is -- we get a FED that changes course on their bond buying (QE) we'll get a big leg down and that's a nice opportunity to be buying. |
Thanks for the replies. As a result of this thread I have decided to move
money from a rollover IRA account that is all in funds, (FUNDS, the new F-Bomb!). So I have just enough, (~$185K), to make it probably a good idea to have 12-14 different holdings. I guess that is a good 'problem' to have. I will also scale-in as I go, trying to apply the things discussed here. It's a challenge to be methodical, when I feel like I wasted the time the money has been under-performing. I just bought KO this morning, (ex-date June 12), so if it dips, you'll know why! Thanks! Steve O |
Here is a little humor since the market is down 110
Woman:
Do you drink beer? Man: Yes Woman: How many beers a day? Man: Usually about 3 Woman: How much do you pay per beer? Man: $5.00 which includes a tip (This is where it gets scary !) Woman: And how long have you been drinking? Man: About 20 years, I suppose Woman: So a beer costs $5 and you have 3 beers a day which puts your spending each month at $450. In one year, it would be approximately $5400 …correct? Man: Correct Woman: If in 1 year you spend $5400, not accounting for inflation, the past 20 years puts your spending at $108,000, correct? Man: Correct Woman: Do you know that if you didn’t drink so much beer, that money could have been put in a step-up interest savings account and after accounting for compound interest for the past 20 years, you could have now bought a Ferrari? Man: Do you drink beer? Woman: No Man: Where’s your Ferrari? Now we know why Greg has that large pile of cash. LOL |
Okay! That's funny as hell right there! Love the logic!
Large pile of cash??? Because I don't drink!!!! Don't smoke either.... so I put all my loose change in a jar at the end of every day... :G-Dub: |
LOL. I used that same principal the other day on another forum when they were talking about playing the lottery. :)
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OK G-Dub, educational opportunity?
I just received this offer: Pfizer Inc. is offering to exchange up to 400,985,000 shares of Zoetis Class A common stock (which Pfizer currently owns) for outstanding shares of Pfizer common stock. For each $100 of your Pfizer common stock accepted, shareholders will receive approximately $107.52 of Zoetis common stock, subject to the upper limit of 0.9898 of a share of Zoetis stock per share of Pfizer stock. The value of the shares will be based on the volume weighted average price (VWAP) for the stock on the NYSE during the three days up to and including the expiration date. Cash will be paid in lieu of fractional shares. If the offer is oversubscribed, shares tendered will be accepted on a pro rata basis. However, the Company will accept all shares tendered by holders who hold an aggregate of 99 shares or less and tender all of their shares. For purposes of this offer, aggregate is defined as the combined total number of shares held by a beneficial owner; this includes shares held in separate accounts registered to the same beneficial owner. Submitted instructions for holders that beneficially own an aggregate of 100 shares or more will be subject to proration. The offer is conditioned upon, among other things, the Minimum Amount Condition, opinions of counsel regarding non-recognition of gain and loss for tax purposes, the continued validity and effectiveness of the private letter ruling from the IRS and other customary conditions. The Company reserves the right to amend, extend or terminate the offer. If you wish to participate in the offer, you must deliver your response to Schwab. If you have any questions regarding the offer or for a copy of the prospectus, please contact Georgeson Inc. (the Information Agent) directly at (866) 628-6024. Your Choices: Exchange: Exchange all or a portion of your Pfizer shares, subject to proration. Decline/Take No Action: If you do not wish to participate in this offer, no further action is required and you will continue to hold your Pfizer shares. ------------------------------- PFE - .24 dividend - Human pharmaceuticals ZTS - .064 dividend - Animal pharmaceuticals PFE division spin-off. I'm holding 208 shares of PFE.......... |
Well.....
Here's what I'd have to go on. PFE (Pfizer) is up almost 28% for 1 year -- and over 10% for YTD... and they pay a 3.46% dividend (based on todays price) ZTS (really ZITS??!?!?!) Zoetis is up 4.48% for YTD and they have no history longer than that. They pay way less dividend so IMHO you're not getting paid to wait - and you're (so far) not getting the offsetting growth which would make up for the lack of the dividend. So if it was my account -- I'd stick with PFE. |
Here's a little history on the IPO and the architecture:
http://seekingalpha.com/article/1147...preview-zoetis It's certainly not going to set the world on fire but could end up being a moderately priced Steady Eddy so to speak. The way I see it the world will always need healthy animals for food and companionship and this company appears to own the market share globally. Pfizer is a good stock though I'm a little concerned about the number of expiring patents and competition from the generic sector, especially with the healthcare train wreck that's coming in January 2014. :headscratch: |
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This is EGG SACK LEE why I tell everyone -- PICK YOUR OWN STOCKS -- because if you listen to someone else... then the reasons YOU own them won't wash -- and if they go down - you're quick to sell rather than hold and add more. INVESTING IS A LOT MORE MENTAL than most people understand. |
There's not too much to write home about with this choppy market. Trust me - this is typical summer action. We didn't get the usual "sell in May and go away" - but we are getting the typical summer "death of a 1000 cuts"...
I ALWAYS ALWAYS ALWAYS build a cash position coming into summer. Remember that I use JNK - HYG - NLY as cash parking spots. Years ago it was MSFT - GE - DELL.... but you must change with the market... but I digress... We're at kind of a weird place in the market these days. People KNOW - without a doubt - that INTEREST RATES ARE GOING TO RISE.... when and how much and more importantly HOW FAST.... that's the unknown. My typical action is to pick away on the stocks I like -- when they dip a bit. I use LIMIT orders for these buys - setting a price below where the market is at the time I place the order. I don't get stupid -- I just go a penny or two below the current BID not the ASK.... and if it dips to there at some point during the day I get the order filled - if not - it expires (I use day only limit orders). So if I want to build a position to 10,000 shares... I'll buy 2,000 at a time. But during the summer - I only buy more if it goes below my last buy. So if I paid 20.50.... I'll add more if it goes to 20.35 etc. All I'm trying to do is not go all in at 20.50. Why?? Because it feels better to do it this way -- and I've been doing this for some 30 years... and I fully understand the MENTAL part of the game. I EXPECT --- expectations are meant to get crushed --- the market to be better in the fall -- so by September or October I expect the market to be higher or more steady. This strategy is for large buys not 50 or 100 share positions... a few dimes on 50 or 100 shares isn't going to affect your return. But this is a strategy to remember and use if you're buying 500 or 1000 share position. It's just a game -- it makes you pay attention -- it makes you understand where your heart and mind are and it teaches you to really get in touch with your investor side. Can you stand to buy when the market sucks.... it's very important to know whether or not you can. Some can't -- it's okay.... but you need to know that. It's like a good poker player -- if you start a bluff -- can you see it through til the other player folds or are you going to toss money in the pot a couple times = and then fold -- thereby just increasing your loss. You should have just folded after the first cards came around... If you're not a good bluffer -- it's okay -- just know it and fold early. It'll save you money. Same thing in the market -- if the market is going south and you start buying and it's just killing you mentally... so you buy more and then at the bottom you fold and sell... THAT'S DUMB! That is what MOST "retail" investors do. They sell at the bottom and buy at the top. DUMB - DUMB - DUMB.... Let's not be "that guy". |
Good points.
I just need to learn to sell when the market starts to turn..........as is, if I was a gunfighter, I just stand there and watch in slow-motion as the guy shoots me. :guns: If I would just act on instinct and sell a portion of the holding verses my mindset of all or nothing I'd still be alive and engaged playing the game and learning. :D |
Knowing when to SELL is far harder than when to buy.... I use the same resistance in selling as I do buying --- I sell slowly... because it never fails that the day after you sell -- the market goes up.
The hardest part to selling is to question why you bought in the first place. Here's the deal... if you look at the chart of the stock -- and you check it's total return over a long period of time.... Are you selling because it's down this quarter? Are you selling because you have too large of a gain? Or is it just portfolio rebalancing? Today --- I asked my broker to sell ALL my BONDS.... Why? Because I have nice gains in them --- I just got the June interest payment... and I'm relatively certain that going forward my gain is going to turn into a loss as interest rates rise. I'll probably be wrong - but nobody ever went broke taking a gain (profit). I've owned them all longer than one year and a day -- so will be taxed at long term capital gains... So this is purely a "plan" -- and the trade off is I will loose the TAX FREE income.... but most of this laddered bond portfolio is out 2 - 3 and 4 years from now... I'd rather NOT loose the capital appreciation and have to hold the lower interest rate return for that time period. IF -- big IF -- The economy is doing as I feel it is -- which is MUCH better than the unemployment numbers tell -- then we'll have a good XMAS selling period for retailers -- housing is making huge gains -- cars are selling like hot cakes etc.... so I'd rather chase that than hold tax free munis at 4 and 5%. I've started to build a position in FORD (F) etc.... I'm late to that party but I think they're just getting started on the road to recovery. So I'll position accordingly. |
Good info on selling, Greg, Thanks! I believe in the dollar cost averaging approach, so I will stay the course this summer & fall. I expect I will :bang: a few times that's for sure.
I've been doing more reading on gov't sponsored retirement plans like 401k's. The author makes a pretty compelling argument AGAINST shuffling money into these types of retirement plans, namely because of of the lack of investment control, and that income from the plans is taxed at normal income rates. Unless you plan to be "poor" when you retire, you plan to be wealthy when you retire and your normal tax rate at retirement will likely be HIGHER than the capital gains rate. For example, if you are retired in a 35% income tax bracket, your 401k income is taxed at 35%. Whereas your income from dividends and sale of stock in your brokerage portfolio is only taxed at 18%. Something to consider when deciding whether or not to max out 401k's...is your expectation REALLY to have a low income when retired? |
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These are good discussions --- and they really need to be evaluated on a case by case basis.... there is no one size fits all!
Most people will have Social Security --- and maybe a pension --- and then will have some dividend and interest income (hopefully!).... But for the most part your income should be lower when in retirement mode. Think about it just for a minute.... if you're 40 now --- you're going to work 25 more years -- SURELY your income will be higher 25 years from now... So when they say -- withdrawals from a 401K should be taxed at a lower rate -- for the most part that is true. Remember that it takes a MILLION DOLLARS today to generate about a 5% taxable return. So that's only earning 50 grand a year taxable income. Dividends are only taxed at 20% maximum today.. How many folks out there retire with a million bucks? I don't know. How many retire with 2 million? My guess is most will be lucky to retire and have 750K in savings --- so maybe it's making 35K a year... that's not much "taxes" being generated... and considering some of it will be max tax rate of 20% -- Dividend income -- or Long Term Capital Gains @ 20%.... there's not much EARNED INCOME. |
When I was still in Georgia and had time, I listened to Clark Howard. He is a consumer advocate and in general tries to get people to be better with their money. He often addresses the pre- versus post-tax savings debate because people are always asking. His response is simple and maybe even too simple for this thread but it is no one knows what tax rates will be in the year whatever. Any savings you do now is going to help when retirement comes around. So stop putting a unnecessary factor in play and just start saving anyway you can.
Of course, then he will sometimes branch off into what Greg and Jeff mentioned and that is the other factors such as a 401k match coming into play etc. You really do have to take into consideration your personal situation and available options. For me, I actually backed off my 401k percentage and put the difference into other accounts. I still get my full company match but I wanted more control over the dollars. I'm still saving the same total as before but I'm controlling it more. I'm also not worried about the tax implications for when I retire. It's a long way away and no one knows what taxes will be like then. For all we know, we'll go the way of Chile and everyone's retirement will be seized and divvied out by the government to be more fair :confused18: |
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Taxes are really an over rated item.... People with money really don't pay much attention to them. Here's how they think... if they make a big azz bunch of money and have to pay a big azz bunch of taxes --- then that's a good thing because it means they made a bunch of money! Obviously -- you do what you can to minimize any taxes -- but you never make the choice to not make a profit or take a gain - or try to make money just because of the taxes. I hope everyone here is in the maximum tax bracket when they retire! So here's really what I'm saying.... I sold tax free munis today which give me a pretty nice tax free income ------ but my real concern is not the tax free part ---- my real concern is whether or not those investments are going to go UP from here --- or whether they're going DOWN from here.... Screw the taxes... If I'm making money -- I'm happy to pay them. Totally serious here. |
So here's why I like to use LIMIT orders.... and this is really probably only really useful for those buying larger amounts of shares -- but it is also something that all of you should know and understand.
This morning I put in some buy orders -- a couple for "DAY ONLY" -- in other words if the price I chose doesn't fill the order - then the order expires today... Another one -- for Chevron (CVX) -- I chose "Good til expired" -- that is good for 60 days. The reason I chose that type of limit order is because I put a bid in way under where the shares are currently trading. CVX pays a dividend ($1.00) on MONDAY -- I hope the shares dip at least that $1.00 on Monday and therefore my order might get filled. If that works - then I effectively picked up the dividend even though I didn't own the shares on the EX date. Obviously I only pick up the dividend IF -- BIG IF -- the shares recover sometime within the next day or two. I also like to scale into shares. I buy very large lots... and scaling in is important to my overall mental health -- as well as I can am "closer" to the market for the stock. Putting in a limit order helps me scale in --- and even though the shares might go below my purchase price -- I'm still closer in cost basis to where the shares are currently trading. Today I put in a limit order for Terra Nitrogen (TNH) -- I put that limit order in "day only" at $204.00 per share... for 1000 shares. So far I've bought a whopping 75 shares. But my point is -- once I put in that order - whenever their is a seller willing to match my price - I'm automatically buying. If it doesn't get filled completely -- who cares. Tomorrow is another day... and if the shares are going up -- then I've made some money on what I did buy... and if they're going down or staying steady -- then I'm at least closer (with my lower buy per share) that I would be if I just built a "market" order. If I'm not in a hurry (rarely) to build the positions --- then I put in limit orders that are .50 or 1.00 LOWER than the "low" for the day. If it's a stock I just want to buy -- then I might be only .10 or .20 under the "market" price. That way when it dips just a bit during the day -- I'll most likely get a fill. |
By the way -- please remember that just because I use examples naming names in here - doesn't mean that these names are appropriate investments for YOU. Please don't just copy what I'm doing. I do this EVERY DAY -- for YEARS... my holdings are bought and sold for completely different reasons than what you guys should be investing for.
So for example -- the limit order for Terra Nitrogen (TNH) was put in for $204.00 for 1000 shares ---- What I wanted to explain is that the high for the day so far is $205.21.... and the LOW for the day (most likely set by my whopping 75 share fill) is $204.00 When you're buying a 1000 shares ---- that $1.21 difference between the high and the low -- is a GRAND. How many of you make a grand that easy?? So to me -- that difference is important. Would I bother doing that for 100 shares?? No -- but I might just to use it as a way to learn --- and frankly -- that would be a hundred bucks if it gets filled....so maybe that's a good way for you guys to at least feel good about "gaming" the market just a bit. |
So just a follow up to these "limited" thoughts.... LOL
My Chevron order for 2000 shares at $120 was filled today... and while it's currently quoted at $119.94.... My buy at $120 is a far cry from the days high which I would have bought at had I just placed a market order.... that would have been about $1.60 plus difference! On 2000 shares -- that's a lot! Thus my statement that even if the shares go lower than where I bought -- I'm a lot closer to the market than had I paid the market high for the day. So since I was trying to capture the $1.00 dividend being paid Monday -- I put in another 1000 share limit order (good 'til canceled) at $119.00 |
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Yah, I know what you meant, copy on a different 'scale'. Just messin' with you Greg. I see the numbers you post and I'm like, "Holy sh_tballs....that must be nice." Thanks for all the continued great advice and helping us try to 'get there'. :thumbsup: |
So here's how my buys went down today.... all set with LIMIT ORDERS
and the price where the shares closed today in red. 06/06/2013 Buy 1,000 CVX CHEVRON CORPORATION Details $119.00 -$119,008.95 * 119.59 06/06/2013 Buy 100 NNN NATIONAL RETAIL PPTYS REIT Details $35.18 -$3,518.30 * 36.36 The NNN was an order for 3000 shares -- I got a whopping 100 at my price. I'm okay with that... that's the way it works! 06/06/2013 Buy 2,000 CVX CHEVRON CORPORATION Details $120.00 -$240,008.95 * 119.59 This order was filled --- and now you see what I'm saying about my cost being closer to the market price... had I put in a market order my cost would have been possibly at the market HIGH for the day of 121.49 !! I didn't hit the low either which was 118.66..... But I did buy an additional 1000 shares at 119.00 - so that brings my AVERAGE cost down closer to market! 06/06/2013 Buy 1,429 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT Details $82.30 -$117,613.10 * 84.03 06/06/2013 Buy 100 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT Details $82.30 -$8,230.45 * 84.03 06/06/2013 Buy 75 TNH TERRA NITROGEN CO LP COM UNIT Details $204.00 -$15,300.67 * 205.25 The TNH order was for 1000 shares at 204.00 --- I got a whopping 75 at my price and the order expired at day end... Again -- that's how it works. Rome wasn't built in a day! 06/06/2013 Buy 50 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT Details $82.30 -$4,115.22 * 84.03 06/06/2013 Buy 421 KMP KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT Details $82.30 -$34,650.18 * 84.03 06/06/2013 Buy 5,700 MO ALTRIA GROUP INC Details $35.40 -$201,785.10 * 35.81 06/06/2013 Buy 4,300 MO ALTRIA GROUP INC Details $35.399 -$152,219.55 * 35.81 |
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Sorry Chris.... I was so busy typing I missed this! Good comment BTW I got a good laugh out of it. So thanks! Yes --- scale is "variable" with the readers here... and sometimes I'm actually kind of embarrassed to post my numbers -- but I feel they're useful to show how the market works etc... and I think it's more meaningful when you can really see what a difference it makes etc. I'm still trying to keep this as "102" (not that it's MY thread)... I think that the basics of "best of breed" etc have been well covered. Now some of the details or nuances of investing can be introduced. |
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Think of it more as the carrot on a stick.... :wacko: :wacko: :action-smiley-027: |
I like the Limit Order idea. Considering how I like to by stuff at a discount, I see it as a good way to simply name your price. I can see myself eventually using this method.
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You can outsmart yourself using limit orders as well -- by missing a lower price by a penny or two and then seeing the market jump a buck... So they're a mixed blessing. You can stand there and watch the train pull out of the station so to speak. So I'm watching the market -- gauging a feel for where it's headed -- and staying on top of the order fill (or not) and I'm willing to go in and change the order if needed. I've also been known to cancel an order mid-stream as well. |
I'm of the opinion that you should always use a limit order, but you don't always have to do it the way Greg originally suggested. If you have decided to make a purchase, make it with a limit order, NOT a market order. You can put the limit order price in a the current market price, or a few pennies above or below. But if you use a market order, you could get hit with a 'spike' in the price, paying more than you planned to.
I never use a market order. |
That's not a bad idea, Bryan. I might try that next time just to see if it works out. Sure, in the long run it won't matter but it would be nice to one, ensure you don't buy at a spike like you mentioned, and two, basically bargain on the price of your purchase. :G-Dub:
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