Investing 102

[GregWeld]

Yesterday I said I was picking away at adding to some positions because I wanted to be buying down a buck or so if I could. That doesn't sound like much does it.... I mean really? Down a buck? Whoo hoo....

Here's the PROPER way to look at this though.


When you're buying 4 or 5 or 10 THOUSAND shares at a time like I do... Down a buck is 4 or 5 or 10 Thousand DOLLARS.

I also always look at PERCENTAGES... so if something is off 2 or 3 PERCENT... and I'm only trying to make 5 percent for the year - well (hopefully) I have a good leg up on that 5% when the market snaps back!


Here's a snap shot of one of the orders I placed yesterday. I placed two separate orders as the day went on -- one for 2000 shares and another one for another 2000 shares as the price fell a little more. I always do LIMIT orders -- so I pick a price I want to pay and when shares are for sale at that price - then the computers buy them. Thus the multiple fill of the orders.



300 $39.679 $11,903.70
Commission: $1.34
$11,905.04
1,700 $39.678 $67,452.60
Commission: $7.61
$67,460.21
159 $39.60 $6,296.40
Commission: $0.71
$6,297.11
1,241 $39.60 $49,143.60
Commission: $5.55
$49,149.15
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
400 $39.599 $15,839.60
Commission: $1.79
$15,841.39



Now --- here's why I'm writing about this today. BUYING ON THE DIPS --- makes you FEEL BETTER. When you buy a little here and there -- and the price a few days or weeks later is MORE than you paid -- YOU FEEL BETTER. Does it make a huge difference 10 years down the road? Probably not really... but for those 10 years... I'll think I was pretty dang smart.

Does this kind of investing make a difference in a portfolio where someone is buying 50 or 100 shares... Not really... BUT YOU'LL FEEL BETTER!!!

Note that I was ADDING to an already established position. I've been asked a zillion times about "should I wait to get in"? The usual answer is no. While you're waiting -- you're losing time -- and will probably wait until just after the "X" date of a dividend payment -- and then will have to go for 3 more months before you get paid a dividend etc. And maybe you missed the 3 day selloff -- and now the shares have not only rebounded but they've jumped 4%. In the long run -- 3 - 5 - 10 - 15 years -- just buy when you have the money ready and are ready to make a pick. TIME is your friend.... not the .50 per share dip you waited for.

If you're pretty sophisticated and are aware of all the little nuances of the market - you know the X date - and on and on - and you're placing orders for 500 shares at a time etc -- okay -- then maybe you can wait a couple weeks or a month or two for a dip like I do.

[GregWeld]

Looks like I should have waited another day or two!!! LOL


You can never pick the bottom -- or sell at the top... Just get over it.

[GregWeld]

This is a good article and everyone should read it -- it's short - but long on ideas and values to be remembered. The values are that it really doesn't take that much per year or that long - to accumulate some meaningful funds.

The strategy is that investing is not about getting rich quick - but rather - time is the wealth creator... the sooner someone gets started the better. The author uses 12 years to show money growth. If money doubles every 10 years - then the 167K is going to be 330K and the author is assuming that you quit saving after just 12 years. Of course he's not writing about that - but I'm taking his example just a bit further.

Now imagine - that if a person really said to themselves... RETIREMENT should be fun - and fun costs money. And then saved accordingly. To me - I think if someone is making 100K a year... they should easily be putting away 1K PER MONTH... which would double all the authors results.

http://seekingalpha.com/article/1460...g_income&ifp=0

[glassman]

I thought you smoke'd tires and drank gas? goodyear and chevron lol

But seriously, Greg you've said so much just right there. That is why i keep refering friends and family to this thread, the old sales motto, kiss=keep it simple stupid!!

Steve, i'm kinda in the same boat as you, mid 40's, and about 15 years left.

Think about that, its halftime in our careers, 3rd quarter, hows your game doin?

Have a great Memorial Day everybody!!! AND REMEMBER TO THANK OR HUG A VET!!!! (not a corvette, you can hug that some other time,,,)

[glassman]

sorry, i missed this last page, was referring to right after Steve's post....

[Bucketlist2012]

Hey Guys..

My thought for the day is just remember that health is a HUGE factor in your Numbers..

You can plan and then wham....You are not working anymore due to Health..

My numbers had me working 10 more years, but due to major health issues I can no longer work..

So overestimate what you will need and shoot for that.. Also have the Will/Trust in place...I don't think you want your Family in probate after you are gone...Keep the Government out of your pockets...

Life Insurance ? It depends...

Long Term Care....Another question...

Not things we like to talk about, but all your planning can go out the window in a flash

[glassman]

The old saying goes "if you've got your health, you've got your wealth"

I have many disabled clients, some from sickness, some from age, none of them can "spend"....

[GregWeld]

Any of you newbs to investing making any money??

[toy71camaro]

No complaints here!!

ED Dropped back some over the past week. Seems the news article about them charging the highest rate for Electricity in the US didnt help me any. lol.



Here's a question however...

back long before my Investing 102 days I made a decent purchase ($ wise, not "smart" wise. lol)... (compared to what i have in my ROTH Investing 102 account that went belly up. Now its a "fraction of a penny" stock. lol. What's your thoughts on this one? My thought, is that its so low, it will cost me more to sell it than what its worth (ouch). So holding it is costing me nothing, other than seeing the lower overal % growth being true for my account. I figured since it doesnt cost me, perhaps i should just hold onto it, and maybe one day in the far far future they come back.. lol. The stock was Storm Cat Energy, who went bankrupt not to long after my purchase (relatively speaking. It now goes by the ticket SCUEF, and is no longer listed on the normal stock exchange (which not sure if i could even sell it if i wanted). The original $ amount makes up about 4% of my total "ROTH" account. So that obviously takes a hit on my Gains/Losses column.

This is in a ROTH Account. So no tax benefits either way...

[glassman]

Well with the Roth you dont get taxed as earned income when you take it out, course there has to be something there to take out lol, dont get me started on the entitlements.....