Investing 102

[SSLance]

My portfolio has been interesting to watch the past week, as I'm sure yours has been as well. Looks like to me certain groups sold off their dividend income stocks to raise cash to buy treasuries after the election. I kept my powder dry while watching and now finally today, it appears that the sell off has stopped and dividend income stocks are gaining ground again. Another added plus was the tick up in all of my remaining oil related stocks.

In years past in other investing strategies, moves like this would have spooked me a bit but I wasn't concerned at all now.

[Vegas69]

I'm not concerned about my stock holdings as I'm holding long term. I just feel there are new opportunities for growth outside of stocks in a fearful market or next cycle. While the stocks take a hit, I'd like to try to capitalize on something that thrives in a down cycle.

I'll be researching it and will share if I find some ideas.

"The money is made when the market is most pessimistic."

I don't recall where I saw this, but I think it holds the key.

[GregWeld]

Originally Posted by SSLance

My portfolio has been interesting to watch the past week, as I'm sure yours has been as well. Looks like to me certain groups sold off their dividend income stocks to raise cash to buy treasuries after the election. I kept my powder dry while watching and now finally today, it appears that the sell off has stopped and dividend income stocks are gaining ground again. Another added plus was the tick up in all of my remaining oil related stocks.

In years past in other investing strategies, moves like this would have spooked me a bit but I wasn't concerned at all now.

That will be the most valuable take-away for making you money. Doesn't say that there won't be long periods that will make you sick to your stomach -- but OVERALL -- LONG TERM -- you make money being in versus being out.

Originally Posted by Vegas69

I'm not concerned about my stock holdings as I'm holding long term. I just feel there are new opportunities for growth outside of stocks in a fearful market or next cycle. While the stocks take a hit, I'd like to try to capitalize on something that thrives in a down cycle.

I'll be researching it and will share if I find some ideas.

"The money is made when the market is most pessimistic."

I don't recall where I saw this, but I think it holds the key.

Wether you're buying cars, houses, or stocks..... the money is always made on the buy vs the sale. If you bought right - the gain will be far better than if you paid too much.

The problem is knowing (or guessing) when that point is reached.

When we're small time investors -- long term -- it won't make enough difference in our portfolios to change our goal much. When we're looking at PERCENTAGES rather than $$ -- the moves are so small as to be inconsequential at the amounts we're investing in the stock market.

In other words - if someone is buying 400 shares at $20 vs 400 shares at $22..... If they are sitting around waiting for just the right opportunity - they can move to $26 or perhaps they have a 10% sell off and move down to $18. I don't want to bend over to pick up pennies and leave dollars on the ground.

[Vegas69]

I found this analysis on how other asset classes performed during the last two bear markets.

I would think Reits will perform better this time around vs. during the real estate collapse 10 years ago.

[GregWeld]

Originally Posted by Vegas69

I found this analysis on how other asset classes performed during the last two bear markets.

I would think Reits will perform better this time around vs. during the real estate collapse 10 years ago.

I own a bunch ($ wise) of REITS.... they typically pay real decent dividends and are pretty steady price wise. However... everything that is interest rate sensitive will ease down IF rates rise too quickly. We shall see how this plays out.

[ErikLS2]

Originally Posted by GregWeld

I own a bunch ($ wise) of REITS.... they typically pay real decent dividends and are pretty steady price wise. However... everything that is interest rate sensitive will ease down IF rates rise too quickly. We shall see how this plays out.

Ever heard of NRZ? They're a mREIT (m for mortgage) that holds mostly floating rate securities, like commercial mortgages, which is mainly why they claim they will do better in a rising interest rate environment. They also do something with mortgage servicing rights, but I can't seem to get my mind around just how they make money doing it so I haven't invested yet.

Anyway, have any thoughts?

[XLexusTech]

Same boat... I have been here for a few years now... tried rentals... too much stress... tried peer to peer lending... in 3 years my Avg rate of return is 5.4% year over year.. beats a CD or a bank account but I keep looking at some of my holdings saying if I has put that peer to peer money in that one investment 3 years ago I would be way up...

So you learn.. you try things and you diversify..

Originally Posted by Vegas69

I'm not concerned about my stock holdings as I'm holding long term. I just feel there are new opportunities for growth outside of stocks in a fearful market or next cycle. While the stocks take a hit, I'd like to try to capitalize on something that thrives in a down cycle.

I'll be researching it and will share if I find some ideas.

"The money is made when the market is most pessimistic."

I don't recall where I saw this, but I think it holds the key.

[GregWeld]

Originally Posted by XLexusTech

Same boat... I have been here for a few years now... tried rentals... too much stress... tried peer to peer lending... in 3 years my Avg rate of return is 5.4% year over year.. beats a CD or a bank account but I keep looking at some of my holdings saying if I has put that peer to peer money in that one investment 3 years ago I would be way up...

So you learn.. you try things and you diversify..

EGG SACK LEE!


Regardless of what you're invested in -- the stuff MOVES AROUND!! Housing isn't always UP -- the market isn't always UP -- rentals aren't always profitable -- commercial can sit empty and require huge TI's (tenant improvements).

Oil has sucked -- okay --- if you BOUGHT oil when it sucked -- you're looking pretty smart right now..... if you bought rentals when the housing market sucked -- you're looking pretty smart right now..... if you bought stocks one or two years ago or even better - FIVE years ago.... you're looking pretty smart right now.

TIME will heal most things investment wise as long as they're not hemorrhaging cash... even better if they CREATE cash along the way.

What's my point? I don't know ---- maybe it's just that if you don't get in a play around ---- you'll NEVER get anywhere. And if you buy the wrong stuff and gamble --- you may never get anywhere. But if you buy good stuff and it pays you a dividend..... you may have a gain one day.


LOL


It's so simple. It truly is.

[Vegas69]

I get what you guys are saying and agree for the most part as I do have different buckets and timing things is difficult, especially with stocks. I just feel that there are indicators and people do make intelligent predictions and moves based on analysis. I can tell you that's how I've been successful in my real estate investments and business. Staying educated and adaptable.

I guess my point is, where's the best opportunity for growth in the short term.

We are 7 years into an escalating stock market and 5+ years into appreciating real estate in most markets. The tide always changes, I'm trying to figure out the best opportunities in the next cycle when stocks and housing aren't so robust. I suppose it may be a situation where you have to live it. I would think the past would leave clues, however.

[GregWeld]

Originally Posted by Vegas69

I get what you guys are saying and agree for the most part as I do have different buckets and timing things is difficult, especially with stocks. I just feel that there are indicators and people do make intelligent predictions and moves based on analysis. I can tell you that's how I've been successful in my real estate investments and business. Staying educated and adaptable.

I guess my point is, where's the best opportunity for growth in the short term.

We are 7 years into an escalating stock market and 5+ years into appreciating real estate in most markets. The tide always changes, I'm trying to figure out the best opportunities in the next cycle when stocks and housing aren't so robust. I suppose it may be a situation where you have to live it. I would think the past would leave clues, however.

I'd guess the reason there's not a lot of responses is...... because who knows?


I just keep doing things the way I've always done them --- when something - whatever that is -- looks to be cheap or beat up and I think I can make money on it IN THE FUTURE -- I'm a buyer.... if I view whatever it is as too expensive right now... then I don't buy. Or perhaps I "trim" and take a loss or a profit... but my BASIC premise of investing doesn't change. Buy good stuff.... that pays you to carry the costs (or almost)... and that you know and understand. Done.

By the way --- nothing goes straight up. They go up - but never in a straight line.


How hard is it to sell some young couple a house if you didn't think that eventually they'd be making a smart decision?? We are all mostly confident that EVENTUALLY our houses should be worth more than we paid. We figure TIME is what will fix that. No different than any other investment. Sure a guy can buy a bad house in a bad neighborhood - or maybe a guy is just a lousy manager etc... I'm speaking in broad general terms.