Investing 102

[toy71camaro]

Good update!

Id say, as for OXY, it seems that most the O&G companies are down. CVX was down 10% for me (and put me in the red overall too). So i feel its just the whole sector right now. In fact, i added another batch of shares while it was on sale @ aprox a 9% discount. So that put me at about a 6% "down" overall on CVX after.

I would also think expanding your sectors/diversify would be a wise choice. Dont leave out the ever popular "sin" stocks (Cigs/Alcohol), as they seem to be fairly well, telecom, consumer staples, health, etc.

Personally, my "investing 102" stocks are:
CVX
KO
KMB
T
ED
MO
MCD
NLY
and since I couldnt decide on a health one, i already had a bit of PFE, I grabbed the same amount or so of NVS. As they both seem to be the "best of the breed" in their sector.

All (except MCD, NVS, and PFE) were purchased with the same initial investment amount, so i am spread pretty much across the board evenly (MDC is 1/3 less than the rest, as i really bought that before i ran into investing 102, but was already starting down the dividend path on my own.)

[Bucketlist2012]

A lot has been down lately, so don't worry.

I knew May and the next few months are historically bad, but I don't "sell in May, and go away", I ride it out and collect dividends.

If it makes you feel any better, I am down a bunch recently, but I expected to be down.

I expect things to turn around and yes energy has been hammered lately, but in 6 months ? It should be back where it was..

So stay diversified and keep dollar cost averaging in..

When it is down, I just work on other projects , ect.. and I don't worry..

And I do not sell...If anything, I am buying on sale..

[GregWeld]

Originally Posted by BC69

Greg - I respect everything you got going on with this thread, but the FB and Gambling thing is unfair! What is really is, is investing 106 at work.



Facebook is a GREAT company! But the valuation is why the stock is moving down. If you applied the same peer multiples of earnings, operating income, or revenue to Apple, Apple would be a trillion dollar company. So it didn't take much analysis at all to realize it was over valued. But it also doesn't have another company remotely like to compare too. Myspace at its prime in 2005 was bough by News Corp for $500MM, so if thats the one marker, its not a good sign. The smart money (and you did it too!) was in and out the same day. The really smart money was in pre-IPO and out at IPO (The venture capital, the underwriters, Goldman, Microsoft, management). The mom's and pop's are now just going to have to enjoy the ride.

Second: Growth stocks do not pay dividends and should not. When a company pays a dividend it is a signal to the market that the yield the investor will get from the dividend is higher than what the company thinks they can get by reinvesting it into the business. FB profit grows at 100% a year, so clearly they can use the money better than an investor can. Apple, while still growing had $100bn in cash and no smart acquisition targets so it decided to give that back. A sign that the company is maturing.

I know this is 102, but if we are being fair - picking a dividend stock is just as much of a gamble as picking a growth stock. (I know! I know! I am going to get flack for that!) When this gets to 103,104,105,106 and beyond if when you can learn some basics to help figure out the best move.

Also, I say all of this, and come off defensive because for young people just starting out it is very commonly advised to have growth stocks as the largest portion of your portfolio. You have time on your side and can afford the risk. Its for older investors that the shift to dividends and bonds becomes heavier. So I don't only the word of the dividend being preached haha!

Somewhere in all your research you missed the TOTAL RETURN portion of investing. Growth --- Growth and Dividend --- or just plain old gambling... it's always the TOTAL RETURN number over a longer period (5 to 10) that I seek. NOT just a dividend.

[GregWeld]

Originally Posted by BC69

Greg - I respect everything you got going on with this thread,

Forgot to say -- THANK YOU! And I completely understand your sentiment.

As you know -- there is so much more to investing and making money etc... but for this thread - which seems to be more 401/IRA... long term retirement savings etc (at least from the 100's of PM's and emails I've gotten) so I've tried to skew my information towards that line.

If I started to tell people about every nuance of everything that I'm invested in - We'd have to start a whole new forum!

I figure -- that over time - there will be more and more info shared as people get the baby steps and begin to have some success etc. That's the way my friends have evolved... over time they begin to get it and want to branch out.

[Bucketlist2012]

Originally Posted by GregWeld

Forgot to say -- THANK YOU! And I completely understand your sentiment.

As you know -- there is so much more to investing and making money etc... but for this thread - which seems to be more 401/IRA... long term retirement savings etc (at least from the 100's of PM's and emails I've gotten) so I've tried to skew my information towards that line.

If I started to tell people about every nuance of everything that I'm invested in - We'd have to start a whole new forum!

I figure -- that over time - there will be more and more info shared as people get the baby steps and begin to have some success etc. That's the way my friends have evolved... over time they begin to get it and want to branch out.

Monaco Greg...Your new business should be charging for PM's..haha..

And yes, LONG term returns are the key.. I have too many family members looking for the quick fix...You wanna quick fix ? Buy a lotto ticket.

I explain that the formula is at 7% , it takes 10 years to double your money, or at 10% , it takes 7 years to double your money.

Also they need 11 times their yearly earnings to retire.. So 50K a year, you need at LEAST 550K invested to retire..

I have between 15 to 17 times mine because I am anal and want to start with more, plus my life style is not that high, less than 100K per year, but give me time, I am always working on a better lifestyle without risking my nest eggs..

So, I ain't done yet.

And if you want to keep the Principal, you can spend 4000 to maybe 7000 dollars a year per 100K..

They don't want to hear that...they want the ATM, or the Drive -thru burger, or the high speed internet Investment strategy..

They get all lemon faced and pouty lipped...WTF...This is long term Investing..To them, long term is tomorrow..

[GregWeld]

Originally Posted by Bucketlist2012

To them, long term is tomorrow..

To most --- they bought it -- so it should go straight up from then on.


People want instant gratification... and what they fail to see is that OVER TIME... getting a dividend or interest payment INSTEAD of paying one... is the real power of money.


Growth stocks are good -- I own them in different degrees in different accounts... But like owning an apartment house... the apartment house pays me when things are so not hot otherwise... and the people that live there are paying my mortgage too! So while sometimes the apartments are worth lots more -- it's when they AREN'T that I like the pay me strategy. Nothing beats a check coming in once in awhile...

The younger you are - the more powerful that becomes. The older you are the nicer to live by!

[Z10ROD]

have any of u guy's seen this newamerica16.com ? and have an opinion ?

[JKnight]

why do I feel like there's going to be a virus or trojan waiting for me at that URL....

[camcojb]

Originally Posted by Z10ROD

have any of u guy's seen this newamerica16.com ? and have an opinion ?

Originally Posted by JKnight

why do I feel like there's going to be a virus or trojan waiting for me at that URL....

they play the ad for that link on satellite channels a lot. It's about a guy predicting a major event this year, supposedly predicted some other collapses. The bottom line, he's trying to sell you something at the end I believe.

[JKnight]

Yeah.....I'll just have to live life not knowing then. Now where did I leave that Mayan calendar...