Investing 102

[GregWeld]

By the way -- just for the record.... I don't think ANY of you should probably be in Annaly Capital Management (NLY) unless you're just parking money temporarily or are just interested in the quarterly income.

We are going into a RISING interest rate market -- IMHO -- The FED has already told us that it's basing it's interest rate on the employment figures and even if you don't believe those figures THEY are still using them as a gauge. They seem to be getting "better" as does the economy.

Please be very careful about investing in things you don't understand - and or don't pay attention to. This is NOT a buy and hold investment... I use it as an example but it is NOT a recommendation (I don't recommend ANYTHING). And please don't feel comfortable with "Greg's in it" so it must be okay. My investing is COMPLETELY different than for most of you. I pay attention -- I have much more to risk - my numbers and your numbers are (I'm guessing) are completely unrealistic - and my investments are for MY purposes... and you need to tailor your investments for YOUR purposes.

[sik68]

Thanks Greg. I heeded your warnings this past week on NLY. I realized it wasn't for me, and given that interest rates are being held down artifically by the fed, I felt like it is time to get out before the stampede. For 3 years now, it baffles me that people are continuing to get cheaper and cheaper loans...it makes no sense so I'm out.

As for paper Christmas cards, you're impression is totally right. E-cards are getting popular, and there's an equally popular counter-movement going on. High-end paper stationery is booming. Check out minted.com (shameless plug, ran by a friend), whose business is doing very well catering to those that appreciate the sentiment of receiving something physical.

I got my IRA disbursement January 1st, putting me at 80% invested and 20% cash. Logic says to me that impending (imminent) rate hikes will damage the market, but I don't know if this is a 2013 issue or longer term. I am 80% confident the market will rise for a while, so being 80% in feels okay. I'm not out to time the market...but I do think there's a big trough coming when reality resets again.



Greg, what are your thoughts on being invested in general in 2013?

Thanks!

[GregWeld]

Steven --

#1 -- in an IRA/ROTH type account I'd always be 100% invested -- since these type accounts are purely retirement and as such are super long term... there's no reason to not be 100% invested.

Remember that you don't just retire at 65 or whatever age - and suddenly withdraw all your money! You're going to take a small percentage of it out annually - for the next 20 or 30 years to retire on.... so you have to ADD that term to the term before you're even eligible to start withdrawals... for most here -- that's a very long time.


I really don't do annual look aheads to figure out where I should be - or not. I INVEST for far longer term than that. However, I live off my investments -- and keep cash in shares that create income - and deploy those funds from time to time if there's a big dip in the market etc - but they're ALWAYS "invested". I don't keep any cash in money market type accounts etc. They earn NOTHING. I'm not rich enough (or is that stupid enough? ) to want to only earn .25% on my money. Thus - I keep "cash" in NLY and JNK and HYG.... that money IS subject to capital depreciation - but I don't sell in down markets unless I thought the 'loss' in the current holding would more than be made up for in the new investment.... and even then I'd scale in and scale out.

Right now I have pretty large positions in NLY ($437K) and JNK ($2.5MM).... but that's because I took some nice long term capital gains leading up to the end of the year - and parked that money in those two names. So far - they've made me even more money - so for right now I'm happy just leaving it there.... but I'm VERY VERY watchful! If I sold now - I'd have SHORT TERM CAPITAL GAINS and I hate paying the gov 40%... but I also doubt I'll leave it in for the "year and one day" that it takes to get to the new 20% Long Term Capital Gains tax rate... so we'll just see what comes along that's interesting.

Personally I'd like to put another 1 or 2MM into apartments or commercial real estate. I like the long term prospects of low cost money and long term appreciation. But the bulk of my money is in equities. Always has been and always will be. Good market or bad.

[GregWeld]

Originally Posted by GregWeld

I had a funny thought this morning -- partly because of Mikes question about income vs appreciation... and partly because I got my Annaly Capital Management (NLY) dividend this morning.

Most of you guys own houses.... I think a "jumbo" mortgage is $417 grand in most states...

I have about that much invested in NLY ($437 grand) -- but instead of paying someone -- IT pays me... $13,500 per quarter or $54,000 per year.

That is INCOME investing...


Side note --- AT&T is trading "ex" dividend today - so part of the price drop this morning is "market" and part is the "ex" dividend trade.

I went back and looked at the numbers and I'd posted them incorrectly -- the correct numbers are now in BOLD

[bdahlg68]

Ford gave out a 100% pay raise. Can't complain about that! I bought in at about $9.85, so the new dividend is about a 4% yield on my initial investment which is pretty darn good!

[GregWeld]

Originally Posted by bdahlg68

Ford gave out a 100% pay raise. Can't complain about that! I bought in at about $9.85, so the new dividend is about a 4% yield on my initial investment which is pretty darn good!

Don't ya just love it!!


Now -- my guess is that the shares will rise which will bring that % dividend down a little - but remember! What we L O V E is TOTAL RETURN.... and this is the way it gets done!

[avewhtboy]

I sold T pre ex div day and bought back $1 cheaper the next day

Anyone interested in investing or even daytrading should check this out

www.daytradingradio.com

Just a fan no personal affiliation

[WSSix]

Finally bought my next round of stocks today. Now it's just a matter of watching what happens with them throughout the year. Here's hoping they grow as well as pay me a dividend.

[GregWeld]

Originally Posted by avewhtboy

I sold T pre ex div day and bought back $1 cheaper the next day

Anyone interested in investing or even daytrading should check this out

www.daytradingradio.com

Just a fan no personal affiliation

Investing and day trading shouldn't be used in the same sentence.

[avewhtboy]

Originally Posted by GregWeld

Investing and day trading shouldn't be used in the same sentence.

Maybe so but I am firm believer in being an active investor, meaning follow your investments diligently, which can lead to daytrading...