Investing 102

[Woody]

Originally Posted by AMSOILGUY

AHHH ok!

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

Regarding buying when the market is up. As long as you plan on holding for the long term, I think most people will tell you to just buy when you are ready and not try to time the market. I actually have a hard time following that advice and tend to wait for pullbacks in price to make my purchases. Sometimes I get the pullback I am waiting for and get a good buying opportunity. Sometimes, I completely miss buying the stock because I am waiting for a pullback and it never comes. The stock keeps going up and up and I kick myself for not having bought it. The other downside in waiting to purchase is that you are not collecting the dividend you could be collecting while waiting for the stock to go down.

You may want to do some research on "dollar cost averaging", if you are going to consistently put money in the market.

[toy71camaro]

As mentioned above, timing the market is too risky. Especially with that amount of money. a 1% swing either way isn't going to make much difference. And what happens when that stock you bought today, goes up again tomorrow? Now you missed on the gain, and now your paying even more.

I dont worry about timing the market. I'm only buying in small chunks in general. Which you are hitting in chunks of $500, so that's really small. Now if I were buying $500k worth shares, I'd be a little more conscious of the up/down swing, as now that translates to a couple grand difference.

But either way, if they're long term holds, then it doesn't really make any sense. You'll miss the good days waiting for trying to time the one bad one.

[ErikLS2]

You can say what you want about Jim Cramer on CNBC, I like to listen to him but don't really invest with him. Sometimes he'll praise something I'm familiar with that's right under my nose, such as Snap on (SNA) which I recently bought some of. I do like that he puts his neck out there on a recommendation and owns up to it if he's wrong. He gives a lot of good tips, often, but not always, in line with what Greg's been saying here. I especially like his tip for using the PEG ratio (PE Ratio:Earnings Growth) to determine valuation of a company.

Anyway, his show this past Friday, Halloween, was right up Investing 102's alley and full of valuable tips. You can view it (for a limited time I think) here:

http://www.cnbc.com/id/15838459

[68Cuda]

Originally Posted by AMSOILGUY

AHHH ok!

JNJ
PG

Thoughts anybody?

They are both in the same business.

About 5% of my total is in JNJ. JNJ makes a lot of household products that will always be in demand. Big, stable company. They have a 51 year record of increasing their dividend, and pay every quarter. They pay out close to half their earnings to the stockholders. Buy in the next few days if you want the dividend. If your account has the option (I think all do, I could be wrong) make sure to check the option for re-investing the dividends. This way the dividend pays you in company stock instead of cash.
http://www.dividend.com/dividend-sto...n-and-johnson/

About 2% of my total is in PG. PG is pretty much the same as JNJ. They have a 57 year record of increasing their dividend, and pay every quarter. You are already past the Ex date on PG, so you will not get the 11/17 payout if you buy now. Their dividend is slightly higher than JNJ at the moment and they pay out a slightly higher ratio to the stockholder.
http://www.dividend.com/dividend-sto...er-and-gamble/

If you are buying three not sure I would do two in the same group, but these two are rock solid so no surprises either way. Thoughts Mr. Weld?

[GregWeld]

Originally Posted by AMSOILGUY

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?

A stock that declares the dividend - and they declare a dividend EVERY quarter... also declares the EX DATE and the PAY DAY... the EX DATE is the date by which you must have LEGALLY OWNED the shares in order to receive that dividend. The fact that you put is a buy order and see the shares in your account - does NOT MEAN that you are the legal owner. Typically you have to figure in the settlement date which is when the money is cleared from your account and blah blah blah... This is normally at least 3 BUSINESS DAYS...

So given that information --- if the company declares the dividend - and stated the EX DATE is NOVEMBER 30th -- then you need to have bought the shares by the 24th... to give yourself some breathing room if you wan to be sure to "capture" that dividend.

Conversely --- you could SELL the shares on December 1st (the next BUSINESS DAY) and you'd get paid the dividend even though you no longer own them.

EX dates have NOTHING to do with "never getting a dividend again" etc per your post. They're simply the date declared by which you must have been the legal owner to get THAT QUARTERS declared dividend.

[GregWeld]

Originally Posted by toy71camaro

As mentioned above, timing the market is too risky. Especially with that amount of money. a 1% swing either way isn't going to make much difference. And what happens when that stock you bought today, goes up again tomorrow? Now you missed on the gain, and now your paying even more.

I dont worry about timing the market. I'm only buying in small chunks in general. Which you are hitting in chunks of $500, so that's really small. Now if I were buying $500k worth shares, I'd be a little more conscious of the up/down swing, as now that translates to a couple grand difference.

But either way, if they're long term holds, then it doesn't really make any sense. You'll miss the good days waiting for trying to time the one bad one.

WHAT HE SAID!!


Even I don't wait for something to come down... to me that's just stupid! If I thought it wasn't a good company and that maybe I'd save a 1.00 per share if I "waited"....why would I invest in it in the first place!!

Now --- I don't buy on UP days.. but there's plenty of days (not weeks and months) of little ups and downs... so since I usually have money on the side I'll buy on a big blowup day... Why not? The stocks I like just went on sale... but I'm not waiting and waiting and waiting for another .10 drop. I buy when I'm ready on the first down tick I see. Don't be penny wise and pound foolish.

[Woody]

Originally Posted by ErikLS2

You can say what you want about Jim Cramer on CNBC, I like to listen to him but don't really invest with him. Sometimes he'll praise something I'm familiar with that's right under my nose, such as Snap on (SNA) which I recently bought some of. I do like that he puts his neck out there on a recommendation and owns up to it if he's wrong. He gives a lot of good tips, often, but not always, in line with what Greg's been saying here. I especially like his tip for using the PEG ratio (PE Ratio:Earnings Growth) to determine valuation of a company.

Anyway, his show this past Friday, Halloween, was right up Investing 102's alley and full of valuable tips. You can view it (for a limited time I think) here:

http://www.cnbc.com/id/15838459

Jim Cramer sometimes provides some good information, but he contradicts himself all the time on his recommendations. I think you are right that he provides some good information on general topics, but I would never listen to his specific stock recommendations. Did you ever see the John Stewart videos on Cramer. Here is one of them. Watch them all if you want a really good laugh.


https://www.youtube.com/watch?v=NkytKDzCEeU

[WSSix]

I said when I started this thread that I'd keep people updated on my progress or lack there of. So today I point to Whole Foods. I've had it for a couple years now, and I'm long on it. If you look at the chart for just this year you can see it took a huge dive. I said it a few pages back that I considered it noise because nothing at WFM had changed to cause the drop. All that happened was the traders, people trying to get rich, didn't like that WFM didn't make as much money as they projected they would. So WFM revised it's projections for the rest of the year and promised to meet those numbers. They beat their projections for the quarter and now have posted a 10% gain as I type this and they are raising the dividend another penny. I'm back to the break even point I believe. I'll see when I get home and access my account.

My point is that you have to be patient and ignore the noise if you're trying to invest. I had no problems leaving my money in WFM and riding the slump out, or selling it if it some how appeared to not recover which is something I was not at all worried about. Hell, if I had this outside of my Roth I would have bought more shares but I max that out at the beginning of each year. So just be patient, invest in quality names that you trust, and ignore the traders.

[captainofiron]

Just got my first 2 dividend payments this week.

Feels pretty good.

Thanks everybody!

[WSSix]

Woot! Congrats Captain!