Investing 102

[GregWeld]

Originally Posted by sokoloka

Thank you for all the positive replies! Nice to have a feel good every once in awhile.



It seems like I inherited a little of the immigrant mentality from my parents and have this innate desire to own my own home outright as soon as possible. I agree that I have too much dead money sitting around currently, and realistically I'm at least 9 months out from purchasing anything.

I adjusted my position in Citi two days ago, and low and behold the little man in the market got me AGAIN. Seems like the dump JP Morgan just took for $2B smashed all the banks down too. Should have waited one more day to adjust!! Interestingly enough, the girl who I'm seeing over here in London is a risk analyst for their hedge arm. Apparently the investment arm in question has no risk division themselves haha. Surprise!

When it comes to dividend investing, is there a "historically" BETTER time to get in? I.e. a month prior to the anticipated dividend date, after earnings, after the most recent dividend etc? Or just jump in, ride the wave and hope that the market appreciates the base stock while pumping out dividends on a quarterly basis?

I have a few more money moves to make but my goal is to diversify into the GW school of investing by mid-June and see where it takes me from there. Took two sizable (for me) gambles on open market shares yesterday both in my own company and my parent's company. Both are clost to 52 week lows - hope there's some appreciable correction in the near future.

I've always been a pretty good saver while never really denying myself anything that I REALLY want. Sometimes I chuckle to think how much more investment "capital" I'd have if I didn't start this damn corvette! But where would the fun in that be?


E

Life should be part investing -- and part fun too... it's not all about just investing. But you are a CLASSIC example of how it should be done -- i.e., SAVING EARLY IN LIFE. That's what this thread is trying to get people to understand - is that TIME factor and how much it affects your ability to gain.


So the "jump in" question ------ There's no right answer --- and market "timing" never seems to work (remember the little man!).... and there's many theories written about when to buy a dividend stock. To which I smear at and say -- if it's a great company - pays a good dividend - is a best of breed name - then just buy the damn thing and if you looked at those total returns and 5 and 10 year charts... does it really make any difference in your performance if you'd saved 50 cents or a dollar on the buy? I think not.

I have a good stake in Annaly Capital Management (NLY) because of it's outsized dividend - and frankly - because it doesn't really move much - it goes 25 or 30 cents one way or the other. BUT -- at one point a month or so I showed a "loss" in the name of 20 grand or so... And you look at that when everything else (pretty much) is green and say WTF! But then I pull up my Excel spreadsheet and see that NLY pays me 19,950 PER QUARTER (35,000 shares @ .57 quarterly dividend).... so the 20K underwater goes away with the next quarterly dividend payment. Does that share price (at any given moment) really mean much right now.... HELL NO! And if it was down 40K? NO! Because I'm even in 6 months -- and if you were reinvesting that dividend you'd be buying in at lower prices.

So - that's a long answer - but if you are INVESTING -- not trying to trade.. then I wouldn't spend any time trying to game the market. The investments are so much bigger than that over time.

[GregWeld]

BTW -- Using Annaly (NLY) is just using it for an example. I'm not saying anyone should be in the name - in fact - it's most likely an INAPPROPRIATE investment for most - and especially for people that are NOT watching the market - and or interest rates etc. It is not a buy and hold investment. It is highly interest rate sensitive and will get hammered (perhaps) if we get interest rates moving to the upside.

I am NEVER trying to recommend stocks/investments. I'm only trying to get people to see actual results by using some of my own personal investments.

[XLexusTech]

If I read this correct... 1000 shares of this (10K VALUE) WOULD PAY 1109.00 Dividend per Month?



Open 10.76

EPS (Trailing 12 mo.)
1.672

Dividend Yield 11.16%
Monthly Dividend 0.1015
Ex-Dividend Date 5/29/12
Dividend Payable Date 6/22/12

[bdahlg68]

No, it would pay $101.50 per month. 11.16% is annual yield.

Originally Posted by XLexusTech

If I read this correct... 1000 shares of this (10K VALUE) WOULD PAY 1109.00 Dividend per Month?



Open 10.76

EPS (Trailing 12 mo.)
1.672

Dividend Yield 11.16%
Monthly Dividend 0.1015
Ex-Dividend Date 5/29/12
Dividend Payable Date 6/22/12

[96z28ss]

Originally Posted by GregWeld

Life should be part investing -- and part fun too... it's not all about just investing. But you are a CLASSIC example of how it should be done -- i.e., SAVING EARLY IN LIFE. That's what this thread is trying to get people to understand - is that TIME factor and how much it affects your ability to gain.


So the "jump in" question ------ There's no right answer --- and market "timing" never seems to work (remember the little man!).... and there's many theories written about when to buy a dividend stock. To which I smear at and say -- if it's a great company - pays a good dividend - is a best of breed name - then just buy the damn thing and if you looked at those total returns and 5 and 10 year charts... does it really make any difference in your performance if you'd saved 50 cents or a dollar on the buy? I think not.

I have a good stake in Annaly Capital Management (NLY) because of it's outsized dividend - and frankly - because it doesn't really move much - it goes 25 or 30 cents one way or the other. BUT -- at one point a month or so I showed a "loss" in the name of 20 grand or so... And you look at that when everything else (pretty much) is green and say WTF! But then I pull up my Excel spreadsheet and see that NLY pays me 19,950 PER QUARTER (35,000 shares @ .57 quarterly dividend).... so the 20K underwater goes away with the next quarterly dividend payment. Does that share price (at any given moment) really mean much right now.... HELL NO! And if it was down 40K? NO! Because I'm even in 6 months -- and if you were reinvesting that dividend you'd be buying in at lower prices.

So - that's a long answer - but if you are INVESTING -- not trying to trade.. then I wouldn't spend any time trying to game the market. The investments are so much bigger than that over time.

I have a small position in nly. I must of bought it when you were down cause its been green the whole time i owned it. About a month now. LOL

[GregWeld]

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/5845...g_income&ifp=0

[Sieg]

IPO's from 10+ years ago still hanging on as a reminder of what not to do:

-----------------------------------Mkt------Cost------Net Gain

MAXYGEN INC 100 @ $5.61 $561.00 $791.25 -$230.25

MICRON TECHN...200 @ $6.36 $1,272.00 $2,869.00 -$1,597.00

PERICOM SEMI... 200 @ $7.89 $1,578.00 $3,550.00 -$1,972.00

Do I wish I would have bought shares of McDonalds now?

All the dividend stocks I've bought since this thread inspired me closed comfortably in the green Friday.

[96z28ss]

Originally Posted by GregWeld

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/5845...g_income&ifp=0

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

[GregWeld]

Originally Posted by 96z28ss

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

EXACTLY -- because if you go back and look at the chart -- it's low on the left and climbs steadily to the right... and there's no reason to believe that it's somehow - after you bought it - going to start a long term decline. In the meantime - they send you money every quarter as a reward. WTF is not to like about that?


I'm down 60 GRAND in Banco Santander.... what do I do? Buy more... increase my dividend "reward" and kick back. I have 20+ "green ones" that more than cover the 2 or 3 in the red ones... and every one of them sends me checks.

[MoparCar]

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes