Investing 102

[GregWeld]

Originally Posted by SSLance

I think this is the major stumbling block for me. So many times over the years, I've done something a certain "right way" and been bit because of an outside element affecting a share price...and it has tainted my perspective.

Your stumbling block is that you're trying to make sense of a MARKET over which you have ZERO control.


Once you understand that investing in BEST OF BREED companies --- and the dividends they pay - and that you can get - over time - the dividends and the growth…. and that market fluctuations are just that - fluctuations… you'll become a better investor. HOWEVER -- you can NOT use trader mentality and be an investor. A trader is constantly seeking confirmation for their belief in whether or not the market is going "their way" (because they're betting - they're not INVESTING).

[SSLance]

That is a very astute observation Greg, I like the way you put that.

[GregWeld]

Originally Posted by SSLance

That is a very astute observation Greg, I like the way you put that.

The whole thread is about trying to make sense, and to get people to focus less on the noise and more on the long run. Long run is different than buy it and forget it… be vigilant… but vigilant with a longer term view rather than today - or next month.

When you INVEST in the very best companies --- it starts to take the fear away. I'm not worried about WalMart going out of business… or HomeDepot.. or Coke… or McDonalds. I AM fearful of my investment in FaceBook or Twitter… I don't know what that market looks like next year or the year after that. So I might want to put some play money in something like that - but FIRST I need to have trust in my core investments. When I've established that core -- the Altria type investments --- and those are adding to my savings with their dividend payments -- then I can seek a little higher return from some other more risky assets… Not big risks - but with BALANCE… to raise my overall return. Personally - I place an amount in a British Petroleum Prudhoe Bay Trust (BPT) that pays almost 12% currently… but it's OIL being pumped out of the ground… and they say there's plenty of it… however… it's still risky in my mind - because what if the pipe breaks or the pumps quit or they run out sooner than thought…. But I'm pretty secure with it. If you get my point. An 11.71% dividend raises my cash flow up pretty nicely -- with still sleeping well at night.

Now --- the caveat here - is that this is NOT a stock picking thread -- for that we need to do our own research --- pick our own stocks --- so that we know what and WHY we own them. I'm just tossing out a mindset and a way of thinking about investing. Not showing you or anyone else WHAT they should own. You might love Verizon and I love AT&T…. if you buy AT&T because I do -- that's not good enough --- because the first time AT&T hiccups --- you'll be swearing and kicking the dog and looking for an excuse to dump that POS stock. That's why I say to pick your own -- but pick your own based on the basic premise that you're going to INVEST -- and invest in GREAT COMPANIES rather than trying to hit the jackpot by next week.

People tend to buy when the market is hot and the first time it goes down they're selling (buy high sell low) and THAT is how people loose their asses. They wouldn't do that if they'd just invest in stuff they can trust - good market or bad -- they know they'll be okay.

[gearheads78]

Well I started step 1 this week. I opened an IRA and a ROTH at Schwab. I have to wait until my 401ks are rolled to the new accounts before I can join you guys on the road to retirement not living in a cardboard box.

[GregWeld]

Originally Posted by gearheads78

Well I started step 1 this week. I opened an IRA and a ROTH at Schwab. I have to wait until my 401ks are rolled to the new accounts before I can join you guys on the road to retirement not living in a cardboard box.

AWESOME!!!!!!!

[WSSix]

Congrats! Just always make sure any retirement accounts get transferred from institution to institution through wire transfer or check made out to the next institution. NEVER have the money come into your hands when switching accounts. You'll get hit with taxes regardless of intent or how long it's in your hands.

[toy71camaro]

Awesome! Welcome to the crew gearheads78!