Investing 102

[GregWeld]

I would wait to buy == and don't get all nervous about less than 10%...


Summer is usually the time to buy... the old "sell in May and go away" usually plays out - and when they're sellin' you want to be buying'

[toy71camaro]

ok... that's a safe bet then...

I wasn't worried about being "down" 10%.. i was worried about do i go buy them when their on sale now.. or wait and see if they go on better sale later. lol

I think I'll hold off on any "on sale" purchases (unless it goes waaay down), and continue saving my 1k per buy (about every 2.5 months) and continue diversifying.

Although.. with such low trans fee's for Sharebuilder ($2/buy), i can stagger my buy every 2 weeks, and limp in to do a little better dollar cost averaging.. i dunno. we'll see. (normal buy is $7).

[GregWeld]

Patience --- save up some dough -- collect some dividends (they should be reinvested if you checked the right box) and averaging in over TIME -- is what get's 'er done.


So there is "averaging in" and there is "trying to catch a falling knife"... they're different and there's a lot of learning going on to know the difference.

The market has gone dang near straight up for 3 or 4 months.... it's UP what it should be up in a year.... and then there's this thing called "on average" --- so if the average ANNUAL increase in the market is 10% -- and we've done that all in the first quarter -- the next couple quarters might kick our butts to bring that average in line with what's norm.

Sometimes it's better to pause and "take stock" (had to throw that in there) of where we're headed and what's up next...

Remember this too... this is why we LOVE our dividends! Because I got three of them between yesterday and today... and that's real cash - regardless of what the stock price is.

[GregWeld]

So much for that buying on the dips!

HA!

I don't know about you guys - but I think this market is just going to take us along for the ride. Danged if I can guess what's it's going to.

Must be why I've fallen in love with getting dividends... they just keep coming regardless of the ups and downs.

[toy71camaro]

Originally Posted by GregWeld

So much for that buying on the dips!

HA!

I don't know about you guys - but I think this market is just going to take us along for the ride. Danged if I can guess what's it's going to.

Must be why I've fallen in love with getting dividends... they just keep coming regardless of the ups and downs.

lol. wasnt a long pullback... oh well. didnt affect me either way. I still got my MO dividend


Been sharing advice from here with a couple other people. Trying to get them on the right track as well.

on a down note.. i STILL havent figured out how to re-balance my 401k.. doh... I did print out every funds "report card" from schwab, to try and compare using their tools.. but, its a challenge.

[CRCRFT78]

I have a question about "The Asset Play". While reading Peter Lynchs book, One Up on Wall Street, he mentions looking at the the assets a company may have in its possession when researching stocks. One thing that comes to mind is the land owned by the military branches being turned back into civilian property. There are a lot of old bases being handed back to the surrounding communities to build houses on for residents of those cities, Concord California being an example of one. Are there possible investment opportunities in this in the form of government bonds, etc?

I understand we are trying to keep this Investing 102 but one constant I keep hearing when starting out is to look for the investment that is right in front of you that you normally may not consider. With the redevelopment of the bases back into civilian life, are there investment opportunities in this and what types?

[GregWeld]

Jose --

Kudos to you for keeping your eyes open - and your ear to the ground!


#1 - Let me address your "bond" question.... because that is a good Investing 102 subject.

None of you should be in any type of "bonds" at your ages... and even more important -- not inside of any retirement account.

If you can buy high grade CORPORATE BONDS -- just for the ultra high dividend some of them pay - that would be okay.... but (big butt in the room) what you're going to give up with BONDS is CAPITAL APPRECIATION! Very important part of investing is to get a dividend AND the capital appreciation over time.

I have bonds -- but I'm OLD (will be 59 this summer) and I'm retired... so bonds are okay for me - and I STILL DON'T LIKE THEM. They are a "vehicle" to keep my taxable income "down" (that's a laugh by the way)... but I will hold these bonds for 1 to 5 years and have absolutely ZERO capital growth.. so like most things, there's a trade off in here.

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


Okay -- Now on to the other question. I have no idea what is available to invest in regarding these properties. I know that Alameda County got the Alameda Naval Air Base back -- and there's been lots of discussions with what to do with it. There's waterfront - there's acreage galore... and as you all should know -- the county / city / state -- want these to become tax revenue not overhead.

Here's the caveat I'd use for all Investing 102 readers..... Generally when people get into investing trouble -- it's when they step into something they're not knowledgable about. Overreaching in any style/type of investment is a big mistake. So I'd just look to see if there is developments (not necessarily property development - but "developments" as in what's coming down the road). Let's say you operate a local gas station -- then you might want to see if there's going to be a location for one in the newly developed "area".

My "sage" advice however is to always remember -- when you invest with "others" ---- they're just people ---- and your investment is then with other people. They'll paint a rosy picture... and everyone will be all jacked up about the "can't lose" proposition... This is when you have to stick to your guns and only invest what you can lose... because more often than not -- it will be a loser. I've done enough of them that I can say that with certainty.

If you want to play "housing" development ---- the best way to do that is investing in an LLC = so just buying a share or two when the developer / owners make it available. Typically you need to be what's called an Accredited Investor -- with a sizable net worth -- in order to be legally allowed to invest in stuff like this... because they're highly illiquid... so they want to make sure you have "other money". But they spin off nice % of income and can have huge upside appreciation when the group decides to sell.

I would check with the building department to see what plans have been in the hopper --- and then just see what/who is doing them then make contact -- then REALLY REALLY check them out.

I've done lots of these kinds of investments as an investor (apartment LLC's) and they've been very lucrative. I invested in a 344 unit Class A apartment complex in Tucson, AZ and it returned 117% capital appreciation in 4 years! I'll take that kind of money any day!

But there's many ways to play real-estate --- and sometimes it's a lot less nerve wracking to just invest in one of the big publicly traded REITS (Real Estate Investment Trusts) that pay nice dividends and have upside potential as well. You can find lots of 'em searching Schwab etc. I have one now - called National Retail Properties (NNN).. that pays a great dividend (6+%).

Or if you think housing is ever going to come back -- now might be a good time to bottom feed on the big builders -- Lennar - Pulte - etc.... But do some good research and pay particular attention to WHERE they are building.

[CRCRFT78]

I'm not sure where I'm trying to go by asking that, its definately out of my investment range, both financially and based on my knowledge level. I'm really looking for that outside of the box type of investment. The problem I see with this is that the market adjusts almost instantly to any type of investment news. So unless I had some sort of insider information, I'm positive there are others thinking like me.

With that said, I'm comfortable applying what information I do have and putting that towards my retirement accounts. I'm now trying to think about those investments where I won't have to wait for retirement to enjoy. I'll be 35 in July and I would like to start enjoying my investments (granted they're positive) by 45 while gradually slowing down having to work for someone.

On another note, forgive me for drifting, when it comes to the redevelopments of these old bases or the building of new football stadiums (Santa Clara County), should I look at the developers and see if they are traded publicly or part of a REIT? Along with doing my homework to make sure they are worth investing in of course.

[Sieg]

Originally Posted by toy71camaro

I still got my MO dividend

+1 It was my first from MO.

[Sieg]

9:49 AM Ford (F +0.2%) and Dow Chemical (DOW +1.5%) announce a JV to explore better ways to use carbon fiber in car and truck components. The aim is to improve fuel efficiency by making vehicles lighter, with Ford aiming to cut between 250 and 750 pounds from the weight of its cars and trucks by 2020. (Read the comments on this)
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I believe some thanks goes out to the Formula One engineers for making this a possibility.