Investing 102

[GregWeld]

Originally Posted by Sieg

..........you went down and so did the market.

Waiting for buddy dive pics.

I've been an Advanced Open Water diver since 1989.... I quit taking pics long ago. Well.... That and there's nothing exciting about pics of a beached whale.

[WSSix]

Well, this was a good surprise in my otherwise poor portfolio.

http://www.imassera.com/whole-foods-...idend/2419145/

Nothing but a sea of red in my portfolio. Couple more days til I make my new purchases though. I'm hoping the clearance sales will still be going then. That's what all that red means, right

[GregWeld]

Originally Posted by WSSix

Well, this was a good surprise in my otherwise poor portfolio.

http://www.imassera.com/whole-foods-...idend/2419145/

Nothing but a sea of red in my portfolio. Couple more days til I make my new purchases though. I'm hoping the clearance sales will still be going then. That's what all that red means, right

Yes! End of year profit taking - the whole fiscal cliff debacle - and blah blah blah.... the world is not coming to an end. Buy LIGHTLY... the old scale in... 'cause it can always go lower... but LONG TERM things will prove to all that the world is fine. Especially when you get that dividend along the way!

[WSSix]

Well, my 2013 ROTH contribution is in my checking account. As soon as the new year starts and I finalize my selections, I'm going to buy my next round of stocks.

This is what I have and the sectors they are in
OXY (energy)
KO (Consumer beverage)
SO (Utilities- electric)
KMP (Utilities- natural gas)
WFM (Retail- specialty)

These are the new ones I am considering and their sectors
MCD (service- restaurants)
MO (Consumer- Tabacco)
CLX (Consumer- Household)
JNJ (Healthcare)
COST (Retail- specialty)

Since it's a ROTH, I have $5000 I can spend. I'm thinking I should go with five different stocks instead of four. That should diversify my portfolio more hopefully. I'm wondering though, if I add these five stocks listed, will I not be as diversified as I think? I would end up with three Consumer stocks and two retail. I think I will be fine because the three consumer stocks are in three entirely different sub-sectors. The two retails are both listed as specialty but have very different client bases and different products. Is this still ok or are they more closely linked than I think because of their major sector? Anyone have a sector suggestion for me to look into? I'm just looking at names I know and use so I'm limited in my thoughts.

Why these selections:

MCD because of the dividend and the fact that it's McDonalds. It's the same as KO for me.

MO because as Greg has mentioned and I've read elsewhere, MO itself is diversified. I was also looking at PM but they only have cigarettes as their product. MO makes its money elsewhere mainly. The other thing is MO costs less than half of what PM does. MO's dividend is slightly more than half of PM's. So given the same dollar value to spend, I'll own more than double the number of shares as I would with PM. When the dividend pays, it'll pay out more dollar wise than the PM will. I then in turn will buy more shares of MO with the slightly higher dividend payment as well.

CLX has the better dividend than CL or PG. I also like their past long term performance better. Hopefully, it's an good indication of the future too.

JNJ is the same as CLX. Just looking at steady stocks that pay good dividends and are solid companies.

COST is like WFM for me. I like the way they operate their business. Their attitude towards their employees and customers is what I like. I think more companies should follow their lead so I support them. For those that don't know, their cashiers earn enough to live on and are often there for a long time. They only have a 15% markup on anything they sale according to Clarke Howard. They also require their executives to go into the stores occasionally. Sure, that's more symbolic than anything but I think it matters. If you shop there, don't be surprised one day to learn that the person who greeted you or walked up to you and asked you some questions was a higher level executive and not just the store manager.

So those are my possible selections. I'm just trying to maintain my money and make it work for me with dividends. Anyone have any comments or suggestions for me. I'm always willing to listen.

Thanks

[GregWeld]

Trey -- That's a great looking portfolio and will serve you very well.

You're right -- buy 1K each of those names

Next year you can just add to each holding $500 each - 'cause I think you'll have 10 names total with this years buy.

Then you can start 2014 looking to add 5 new names - and so on - adding to positions and working your way to a total of about 20 names. Then you can feed them as you want to.

You'll retire to a nice life of leisure!

[WSSix]

Thanks, Greg. That's basically my plan. Slowly spread it out and build it up. I still have half of my ROTH in Vanguard's mutual fund and there's also my 401k with Fidelity. I guess I'm still not certain enough of myself to not have a portion of my funds in "professional hands". I need to check on the 401k but I've been pleased with the Vanguard fund so far this year. It paid me a descent dividend and has been weathering the recent turmoil well. We will see in a few years how it compares to my more diversified stock selections.

[WSSix]

Not sure how long this will last but go to google.com/finance and type in sell. Press enter and laugh.

[GregWeld]

Remember during this whole ridiculous "fiscal cliff" etc -- to go back and check out the longer term charts of the shares you own... it's somewhat soothing to see that line headed higher in the long term picture.

All the smoke and spillage in between is just a buying opportunity.

[GregWeld]

A stock I've been picking away at is American International Group (AIG) the big insurance conglomerate that got a bailout from "us". The treasury sold it's stake (and made a few billion in profit) so is finally out of the picture. This stock was a wildly profitable dividend payer until it got too big for it's britches and got into trouble. Hopefully the management learned their lesson!

I'm not pitching it -- just discussing for investing 102 -- as this is the kind of HISTORY that I look for. It USE to be a good dividend payer. That was all suspended during the debacle it got itself into. And what I'm hoping for is that the GROWTH returns -- and they go back to dividend payments. If so - buying in "early" will get me a nice total return.

I'm not putting much into it because buying this kind of stuff is speculative, i.e., gambling. But it's a good educated guess over an IPO. I have history to go off.

In '08 this was a $1200+ stock paying a $4 per quarter dividend.... of course it's an entirely different company now. But I'd love to catch a double or maybe even a triple from here.

[GregWeld]

Originally Posted by CRCRFT78

Lately Apple has been killing me with their decline in share price but I'm still in the positive at 28.46%. So I opened up the little tab showing me when I purchased the shares and notice that my last purchase is down 19.26% while the rest of the shares still have a positive percentage gain. Is there a way to sell off those shares and take the loss while maintaining the positive shares in my portfolio? I recall Greg mentioning something like this but I am not quite sure if I understood Greg correctly. I haven't lost faith in Apple yet to want to sell all the shares but eliminating the shares with a loss I think would be a smart move for now. ANy opinions on this?

Hopefully you haven't blown the Apple (AAPL) out yet -- 'cause just look at the nice move it's had today... Thus -- I'd continue to hold. After today - nobody will be selling in order to lock in the huge gains at LTCG's tax rate.