EXACTLY -- It's no big deal.... It's not like it's some accounting nightmare... no matter what kind of an account it's in. True -- it's a different form.... and does have to be accounted for... But in my book - any time you can get INCOME without it being INCOME.... that's a good thing!

The other day Todd was asking about why the DOW was up and his stocks were down -- or maybe it was vice versa...



Today the DOW was off 68 points and I had ONE stock out of all the stocks I own -- and it was down one penny.... (WFC).


I lied --- I had TWO stocks down WFC for one cent and HYG for 4 cents.... OOPS! Huge - just huge! LOL



And here's another thing that I've learned over the years....


One of my stocks was down like $3 early morning --- it closed UP .50 (BPT).

In my old trading days -- I'd have been freaking out about a stock down $3..... and only the idiots that sold down there have themselves to kick....

Tax time and I just got a letter from Principal Bank for a Safe Harbor IRA that has ~$4,500 as a Individual Traditional IRA. Now I don't ever recall setting this up and I'm not sure which job I'd have had that used this place.... I also don't ever recall getting this letter in the past it shows it dates back at least into 2012!

WHAT!?!?! Could this possibly be money that was hiding and is now 'free money'? :idea: *Heads over to the For Sale section*

Do yourself a favor --- do not call the numbers on that mail --- or use the website listed ---- GO on the net and look up the numbers etc....


You never know if these are "fishing" mails... you call thinking you have money and give them all kinds of information like your SS number etc. So just check it out FIRST. It's real easy for these scammers to use a REAL outfit -- mail you something where they've got their phone numbers listed etc... and BAM they've got
your info.

Yeah I did. I googled and the website has the same information listed. Hrmmm

Even looked up scam for them and couldn't find anyone posting or calming anything.

Okay you're good to go then!



FREE MONEY!! What's better than that!!

So Greg,
KMP in my tax deferred 401k is ok? What about the UBTI I keep hearing about. Something like you can have up to $1000 dollars in distrabutions and anything over you pay taxes on? To cause less problems would it be better to get rid of my KMP shares and get KMR instead ?

On a side note they brought back the dividend on GM stock

Thanks
John

I can answer that real quick ---- ONLY YOUR ACCOUNTANT should give you tax advice. PERIOD.

haha I had a feeling you were going to say that!

The rules are far to complicated --- and the consequences far too onerous regarding taxes... and far too many "it depends". You've just got to consult a tax professional for that kind of info.

I'm probably the WORST tax knowledge guy in the entire universe... and it's a good thing my firm has done my taxes for 25 years.... because MY GOAL is just to make as much money as humanly possible.... and they can figure out what I owe. I just really don't care about taxes... they're just a small percentage of what I make. So I have kind of a convoluted view of them - and I'm not afraid to pay them. He who pays the most wins...

Seems there have been quite a few "earnings disappointments" -- along with rather anemic hiring numbers...


I don't make predictions - and I don't change my investments... all cash cows...

But I will say that this "weakness" may overshadow the optimism that 2013 was the beginning of great things to come. That's good and bad. Good because maybe the interest rates won't rise as fast as I thought "could" happen... but bad because the market if a forward looking mechanism. 2013's big gains were based on the forward view of all things being good and great... now if we see they aren't as good and great... then the market will adjust (not good - because it will adjust downward).

So far - this seems to be a "stock pickers" market -- where if you're in the right names - you're okay - but if you're in the wrong names you get taken to the woodshed. Just look at what happened to Best Buy (BBY) (I'd never be in that name anyway - but it's a good example of missing the goal posts!) Compared to a best of breed name like Amazon (AMZN)....

I always have to put this caveat in here --- I AM NOT recommending this stock to anyone --- nor is this thread about what stocks to buy or sell. I'm using this as an EXAMPLE only for Investing 102 information --- which is more about how to THINK and what to read about and what's IMPORTANT.


I own 20,000 shares of National Retail Properties (NNN).... I actually currently have a large red number in it -- but have owned it for a long time and I'm not selling nor am I adding to my stake.... but the EXAMPLE here is what we're looking at -- the bold letters being what I consider to be important for stocks that I personally want to own.

So here's my point. I have currently a PAPER LOSS in this holding... But since I'm not selling it -- do I really care? NO. I have to have trust in the company (insert ANY company) that I own that they're well managed and that they're profitable -- and that they're willing to share that profit with me as an owner. The rest will take care of itself.






The Board of Directors of National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, declared a quarterly dividend of 40.5 cents per share payable February 14, 2014 to common shareholders of record on January 31, 2014. National Retail Properties is one of only four publicly traded REITs and 102 publicly traded companies in America to have increased annual dividends for 24 or more consecutive years.

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2013, the company owned 1,850 Investment Properties in 47 states with a gross leasable area of approximately 20.3 million square feet.

Sorry guys I put about $4000.00 to work yesterday so you can thank me for the market being down this morning. :lmao:

LOL. Good job!

:smiley_smack:



:D


I feeling ok right now with the Dow down 220 and my portfolio is only off .5%........so far. :peepwall:

I was .64% down.

I've spent the last 45 days or so waiting for a small pullback before entry and over the last two weeks have been wading my way in. I put the last $4000.00 of the $17000.00 from my 401k rollover in and you saw what happened today. The market knew the last of my dry power was in. :G-Dub:

Classic!


Trust me --- this happens every time. It's a test of your will... It's like they used to tell me if I wanted to buy a boat... put on a slicker - step in the shower - turn on the cold water - and every hour on the hour flush a $100 bill down the toilet... if you can do that for 24 hours - "you're a boater".

You have to be able to stand the sight of a "loss" of capital... even though it IS NOT A LOSS... because you haven't sold... so it's a paper loss. You have to be able to get thru it. If not -- and you get cold feet and SELL -- then you've suffered an actual capital loss. Do that every time you invest -- and you're history. So better to find out right away what kind of an INVESTOR you are.

WE ALL HATE IT. Make no mistake about it - regardless of how much money you do or don't have -- we all hate the sight of red.

I have a few small spec positions I will watch closely but the rest I hope to own for ever and just keep adding and waiting for my dividends.

Ouch....

Purchasing opportunities may be on the horizon!

It's times like this that it's wise to have a little cash reserve in your budget.

That's what I was thinking.

I'm thinking I'll wait til the end of January to max out my Roth next year. :D

That or maybe I'll put some more "excess" cash to work here shortly.

Okay ---- some "sage advice here".





Never try to catch a falling knife.





What does that mean? It means you never try to game the market --- be patient... hold the course. And once you feel that everything is fine (which it always is long term) then you put some money to work. ONE DAY or TWO DAYS does not define a market - nor does it define your investments.

EVERYONE is expecting a TEN PERCENT CORRECTION.... we have not had one for quite awhile - - which means the longer we go without one - the less time we have until we have one. TEN PERCENT is a correction. Remember markets always average out. We've enjoyed a 30% RISE over one year! 10% back off that is no big deal.... Unless of course - you just got in and didn't get the 30%.... get over it - this happens all the time. Investing takes a great deal of patience and understanding that the market goes UP and it also goes DOWN. Live with it. If you own great stuff - which is EXACTLY why we buy great stuff - you will be rewarded.

Panic? The dogs can always outrun you and you will get eaten.

In some ways similar to watching waves while surfing.

Try to THINK more institutionally. Move glacially. Don't be one of those stupid ass RETAIL INVESTORS the TV talking heads always laugh about.

A retail investor only puts money to work in an UP market -- and then they SELL the minute there's a loss. Everyone else makes their money off these idiots.


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


A phenomena that may be at work and we will see increased rapid selling pressure for a short period. It's called MARGIN ACCOUNTS... Margin allows people to leverage their accounts to buy up to HALF of their account value on margin (meaning borrowed money). Because it's a cash on cash loan - the rates are very cheap. MARGIN is at an all time high. Why? Because people are emboldened in a big ass up market. The big ass up market has been going on since 2009.... and being leveraged like that has been "smart" (smart is debatable).

But --- when you're margined --- the brokerage can make a "call" on your account. Meaning that in a down market you must maintain that borrowing ratio. You have to have $1 in assets for every .50. In a down market that $1 asset might be only .80 and your ratio is upset. You are called by your brokerage and you have til the close of market that day to add money to your account. Failure to do so means they sell assets automatically to bring your ratio into line. It's a "margin call".

If the market is at record high ratio of margin.... which it is.... there's going to be a whole lot of selling .

People on margin will sell to cover their margin -- the more selling - the more margin idiots become freaked out and rush to cover -- or get a margin call... the more margin calls that can't be covered -- and the brokerage just sells indiscriminately... the bigger the quick down market we get... it's like a bloodbath in slow motion. More down means more selling - more selling means more down. Until all the lemmings are OUT. The TV talking heads call it "weak holders". Which is EXACTLY what they are. I call them IDIOTS... which is exactly what they are.


I expect a big couple sharp selloffs... 400 or 500 point days... That will get us to our 10% "correction". Not predicting this -- but this is the scenario that gets set up.

You begin to buy when the stocks you're looking at are down 7 - 8 - 9% NOT 1%

I love sitting here reading your posts Greg, I agree 100%. Everything "averages" out in the long run (emphasis on the word "long" term). And like you said, buy quality, watch the charts, know your companies.

Last time i checked, were still eating, going to the movies, buying toilet paper, putting fuel in the cars...maybe not as much, but were still doing it...(cept the toilet paper part...."insert imogee of happy face on toilet here")....

This is going to be a very tough year for me, I have money in several places. The pension we're setting up for my employees is taking for ever and biz is down 30%. Funny thing is, now is the time to go shopping for better employees, just like when quality stocks are down, go shopping. Interviewed two very good prospects yesterday for our shower door "division"....gotta watch the overhead and trends. Just like we do with the stocks we buy....

I L O V E Apple products... but that doesn't mean I can love owning the shares (I DO NOT).... because it's a lot of money tied up per share --- and the dividend is paltry. I just can't justify tying that kind of cash up even if the shares have GROWTH. I need the income...


And then we have today -- where they announced numbers AFTER the market... and note the RED after hours number. OUCH!


That by the way - does not mean it will trade up or down tomorrow during regular hours --- after hours trades usually are very few --- takes too much explanation here --- and isn't important... but you can feel the pain!

Now ---- it's been UP about 25% last year --- so you'd still be far ahead if you'd bought a year ago




550.50 +4.43 (0.81%)
After Hours: 506.04 -44.46 (-8.08%)
Jan 27, 7:59PM EST

So this is a "risky" post --- because some of you are investing in non taxable accounts -- and others are investing in IRA's -- and still others are doing both.

These strategies are all DIFFERENT yet investing is the same regardless of what type of account. They're different because of tax implications - and they're different because the non taxable accounts might be for a different purpose (investing for a house down payment etc).

Remember that I personally LIVE off my dividends and other investments... that's a completely DIFFERENT strategy from investing for retirement. I also pay attention to the markets (you have no idea how much time is spent doing this!)... etc. So what I'm doing and why you're doing something have completely different reasons etc.

I use three or four "stocks" for parking cash... JNK - HYG - NLY are the three main ones - and these are the names that have been mentioned in this thread repeatedly. I have also said that these names are used to PARK -- and in TEMPORARILY - cash. JNK and HYG pay a very nice dividend MONTHLY... so if a guy has some cash - he can buy these ETF's and you don't have to wait until the next quarter (3 months) to get some cash flow off them. NLY is a quarterly dividend payer and pays super high dividend percentage.... ALL THREE OF THESE NAMES ARE EXTREMELY INTEREST RATE SENSITIVE! They're the first names (this type) that get killed in a rising rate environment. So if you're not on top of what's going on -- you're going to check your account and you're going to have gotten creamed in this stuff. Leave these to the "active traders" accounts.

So that's all the "disclaimer" ---- it's IMPORTANT.... because this thread isn't about what to do or when or which name to buy and sell... but I can't write a post of Investing 102 without using something for examples.


I sold all three of these names this morning. I had gains in all three. I've picked up dividends off all three as well.... and I wanted to get some cash ready to pick on some more long term dividend payers IF ---- hello here! --- IF --- we get a "correction" (down 10% or so). I don't want to wait until that happens --- or some other event -- and loose money in my "cash parking names" --- so I'll just have to take a small gain while I have it -- and then SIT with employees on vacation -- until and maybe and IF -- we do have a small sell off..... and I'll put all those employees back to work. I had over 3MM in these three names... you guys might have 300 -- 3000 -- or 30,000 whatever it is doesn't matter... what matters is putting yourself in a position to go shopping if we go on sale. Think of it no differently than "Christmas is coming and I need to be ready". Christmas might get canceled.... and we never get the opportunity.. we won't / don't know that.... but if there's a sale --- I'm going shopping!! LOL


I'm not talking about down one day -- boom! I'm talking about a market that just "re-sets" --- a market that re-sets does so over weeks.... and it does it in a matter sometimes that you really don't notice it much. A couple bigger down days --- then some up --- then a week of just down here and there.


So how do I do this?? I have some names I want to add to and some I want to add. I will wait until these names are down 5 - 6 - 7 or so percent... and then I'll just buy a third or a quarter of them at a time. AVERAGING IN. Until I get the position I want. Remember that I can do this because I'm buying a few thousand shares. If you're buying 50 shares you can't do that -- so then you'd want to maybe wait until they're down 7 or 8%. There's no reason to try to wait until you think they're at the very "bottom"! That's nonsense and you'll never hit it. WE ARE LONG TERM.... so if you can just get some shares on sale a little BE HAPPY with that! They will recover... The shares you got on sale might help you average down a position you already have... or sometimes you might average your cost up - even though you bought shares this time on sale. The whole point is --- when stuff goes on sale - take advantage of it if you can and if you can. Don't be afraid of something (the market) just because it's on sale! We don't know how long it's going to be on sale... or when it's going on sale. But if it does... you should be happy.


Think about it like the guy that has been trying to sell his Camaro -- you'd like to own it -- but he's hold his price high and the market might even be going up... and he's thinking about raising his price... all of a sudden the market goes soft and he freaks out and drops his price 10K.... Like Charley did on his Mustang when I bought it! BAM! I'm happy as a clam to have swooped in a grabbed it! Think about stocks the same way. They are no different!!! Get your heads around that and you'll make some real money.

Very insightful post Greg. Thanks for sharing as always!!

Greg, have you ever had any dealings with Thomas Partners?

I have not.

Here's why I don't use a big brokerage for dividend investing.... their percentage takes too big of a bite (percentage wise) out of the equation. When you're trying to be somewhat conservative and make a careful 5% average --- 1% is 20% of that. So the dividend earning money is held at Schwab and Fidelity. I break up my portfolio in the event something happens --- you know --- like "to big to fail"?

Just an Investing 102 statement here about a brokerage failing. YOU own your stocks -- they do not. So even if the brokerage went bust -- the stock is in your name.... BUT -- CASH is only FDIC insured (if your brokerage is actually FDIC insured!) for $250,000 per account. I have way more than that in cash any given day... so split my accounts up.

Lots of folks like their money "professionally managed"... nothing wrong with that if that works for them. Just NEVER use a private individual and never ever ever let them have access to your account. EVER.

Stuart ---

Taken straight off Thomas Partners website....


"We are distinguished by our disciplined commitment to the value-driving characteristics of dividends; a commitment to the goal of delivering rising portfolio income streams, without sacrifice of capital gain potential."



Here's my issue.... not with them in particular... just with "needing" someone that does what they do.


The above statement has been repeated by me a million times. In other words TOTAL RETURN -- that is Growth WITH a Dividend stream. Dividends protect on the downside -- create income and compounding - and "the market" will provide - over time - capital appreciation. I just don't need help finding 20 names that will do that for me. It just isn't rocket science... and these kinds of "pros" typically put people in lower dividend investments -- known as Little old blue haired lady" stocks.... Kimberly Clarke -- Johnson and Johnson - 3M - IBM. Now if I'm collecting 3% and they're taking .75% off the top... that REALLY REALLY affects your compounding -- and does someone really need to pay a third of what they're making (on the dividend) to pick these names?? I don't think so.

Thanks. Just browsing the schwab site. I'm happy managing my own dividend stocks, it's fun also. It looks like Thomas Partners specialize in that arena only and do pretty well.

They'd have to beat the averages by at least the percentage they charge for running the show... in order for you to just be "average". Average is the best anyone can expect... But the way I figure it --- and what I've been preaching here is -- as long as you just stay best of breed - don't go searching for abnormal stuff.... just stick with the tried and true... You're going to do just about as good as anyone else.

When people get into trouble is when they let greed and fear creep in. Many times it's the fear that the phone call to "the broker" will help with - 'cause they'll talk you back off the ledge. And many times they'll keep you from reaching - and becoming greedy. So if a guy lacks some basic common sense -- has no understanding of the market - has no desire to learn even rudimentary terms and functions. Then a broker is probably a good thing for that person and there's lots of people like that.

If, however, a person has good common sense -- takes just a little bit of time to understand "the market" (nobody will really ever figure it out!) -- and knows himself and can control the greed and fear... Then I say -- do it yourself. It's not hard. People make it hard... and they loose themselves money because they freak out and sell the first time the market takes a dip... Or they only put money to work when everything is at record highs ---- rather than just wade in and put money to work on a regular basis... reinvest the dividends and have some patience.

Stuart ---


I've read everything they posted to their website... here's the gist. Invest in select dividend paying stocks that pay above average dividends and have shown to increase their dividends over time.


I'll "select" one... or two.


AT&T..... In 1988 they paid .15 per quarter - 10 years ago they paid .31 per quarter - Now they pay .46 per quarter. So 10 years ago they paid $1.24 per year... and the share price was $24.... Today they pay $1.84 per year. Using the $24 starting price -- and collecting just a $1.24 per year... you've gotten half your money back already. Imagine if that dividend was buying extra shares each year for 10 years...


LO....Lorillard -- using this instead of MO because MO split off some companies along the way and makes it a tougher example..... LO was $8 - 10 years ago and didn't pay a dividend... today it closed at $49.78 and pays a .55 per quarter dividend... and had a 3 for 1 split along the way --- meaning that those $8 shares you bought 100 of --- you now have 300 of. (split adjusted cost basis would have been $24 initial per share) But here's the deal --- the 300 shares -- are paying .55 per share per quarter --- $2.20 per year on a cost basis of $8.00 (split adjusted).



JNJ... 10 years ago the share price was $50 and they paid .24 per quarter... today they closed at $90.10 and they pay .66 per quarter. Let's do some simple interest calculations. $2.93 (annual dividend) divided by $50 (what you paid) equals 5.86% dividend on your cost basis. So you've doubled your money in 10 years and you're getting 5.86% spending money.



How complicated is all that?? LOL

There's not a single name there that you'd lose sleep owning...

If today's action makes you nervous --- or has you questioning why you're invested. Go to a chart of STARBUCKS (SBUX) and look at it's 5 year chart... UP 700% --- when I just checked it's price it was Down .69%....


Really? Down half or 1% or even 10% is going to bother you on it's way to a 700% return? If that's the case --- put your money under a mattress and go join a bowling league. You're heart can't take the stress of watching football.


HAHAHAHAHAAHAHAHAHAHA

Me....I'm into paid off real estate...income producing...and...heavy metals....AU, AG, Lead/Brass the sure stuff:mock:

I have two of those no brainers. Your advise is always great. Slow and steady is a good motto I go by..

How much time a day on average do you spend on investments?

I wouldn't place metals in the "sure stuff" category... Gold is down 25% from it's recent highs. And Silver is down 36% in the same period ---- so I'm not so sure where you think this is a sure bet.

Real estate is a great investment -- as long as it's INCOME PRODUCING. Paid off real estate is a feel good statement... as leverage in real estate will produce better returns over time. I'm not going into the math -- but because other people read these posts... and this is a learning thread... The basics are if you put 100K down payment on a rental house - and you sell it for 50K more than you paid 3 years later. The RETURN is calculated on your actual investment (the 100K). You'd have made considerably less return had you paid all cash. So the "paid off" statement is cocky and feels good.... but not very accurate in many ways without some kind of explanation.

Like ALL investments --- it depends on a persons individual circumstances and what their situation and needs are at any given time. My feeling is that all investments need to only fit those of the individual. Investing is emotional -- and only the person owning the investment needs to feel good about it. Some folks can't stomach owning stocks - and love bonds.... or real estate... or life insurance.... or annuities. Others would consider some of these as TERRIBLE investments.

Every morning... from when I get up (6 AM) until Gwen makes me do something else... LOL


I'm really never "not" doing investing. Even on a road trip I've got CNBC on the satellite radio. But I'm not moving money in and out or trading... or trying to scam the next big deal. I just find "the market" interesting in general. The hard part is to separate the "trader talk" from INVESTING. I like to stick with my particular strategy - which pays me great income regardless of what "the market" is doing today or next month. I also like commercial real estate for the same reason... the renters keep on paying. The mortgage goes down and the rents go up. I like that delta! :trophy-1302: