Investing 102

[GregWeld]

Originally Posted by CRCRFT78

I also jumped on the Roth IRA bandwagon today. Now I've got to get these accounts stuffed with some money and look towards acquiring some other assets that pay. Made a couple of stock moves (sell the duds and picked up some new ones) also. Looking forward to a financially fit 2012. We'll see where its at this time next year.

That's what I'm talkin' 'bout!! Good for you Jose!



I had an opportunity to spend some time with my kids while we were down in Scottsdale this last week -- Alex's GF's Dad is a broker - owns his own financial firm....(has no money and went broke recently because he gives advice but doesn't follow his own - the dumbass!) and I had the paperwork with me from just having closed on a commercial building for my Brother in law (I'm the banker, not the buyer). So we got talking over breakfast about "her" wanting to buy a new car etc. Her car is already a newer 2006 Mustang with low milage - SO I'm saying "why"? Why don't you SAVE those payments (her's in going to be paid off next month) for the next three years and pay cash for a car when you're ready. So the "payments" talk came up -- and I whipped out my amortization schedule for this building - and showed her (and Alex) HOW MUCH INTEREST I'M GOING TO COLLECT OVER THE NEXT FIVE YEARS! They were shocked (they're only 25 year old) - and when they saw page after page of large monthly payments, and the breakdown of how much each month was interest, and HOW LITTLE was paying towards principal -- I think it woke them both up!

She's already a "saver" -- but I was trying to show that if they put new cars off now - and saved instead -- that they could buy all kinds of cars LATER when it really matters more.

[GregWeld]

This is just a coincidence but I saw this article this afternoon - using APPLE and McDonalds as it's subjects - and happens to use these two to make the very same "argument" that I had posted earlier about APPLE VS ANNALY CAPITAL MANAGEMENT... just pointing out that the dividend was a "sure thing" vs the possible capital growth...

Not saying ANY of this is RIGHT OR WRONG - just pointing out the THINKING that goes into investing... and I think that's what we are using this thread for...



http://seekingalpha.com/article/3172...-apple-in-2012

BTW -- I read all of these kinds of articles just for "thinking" -- I don't use ANYBODY else's reasoning or stock tips etc to make up my own mind. I just try to find things to think about and keep in mind when I'm making CHOICES because that's really what stock picking is all about - choices... And trying the best we can to make "informed" choices and understand those choices.

[asifnyc]

hey Greg,

I opened a T Rowe Price account 5 years ago. It's one of those accounts that automatically deducts money from your checking account every month to invest in mutual funds. I have 2 funds. A domestic eqty index and an international eqty index. after 5 years they are flat (with todays near 200pt gain they are just slightly above my contribution).

I think I want to dump them and put the money in a few individual stocks as we've been discussing. The current account I have with T Rowe doesn't enable me to trade individual stocks. I have to open a brokerage account for that. No biggie but my question is, should I open the brokerage account with T Rowe for stocks or should I go with someone else?

thanks!

[GregWeld]

Originally Posted by asifnyc

hey Greg,

I opened a T Rowe Price account 5 years ago. It's one of those accounts that automatically deducts money from your checking account every month to invest in mutual funds. I have 2 funds. A domestic eqty index and an international eqty index. after 5 years they are flat (with todays near 200pt gain they are just slightly above my contribution).

I think I want to dump them and put the money in a few individual stocks as we've been discussing. The current account I have with T Rowe doesn't enable me to trade individual stocks. I have to open a brokerage account for that. No biggie but my question is, should I open the brokerage account with T Rowe for stocks or should I go with someone else?

thanks!

Your story is repeated all too often - and is the #1 reason I detest Mutual Funds... they draw people into believing that they're "well invested"...

RE Brokerage -- as long as it's a low cost brokerage and you can invest on line etc -- I'm not a fan of one over the other. It's a very competitive arena out there and most play follow the leader. I use Schwab for some of my accounts just because there's one just down the street.

It might be easier for you to do T Rowe -- and if one department talks to the other - they might allow you to just have your work withdrawals go into a "sweep account" (cash) and then allow you to transfer from time to time into your other account... but be very careful in how this is handled. IRA's and 401's etc must STAY within a IRA or 401 account...

[billscamaros]

Here's a tidbit that I'll toss out ..... it doesn't have anything to do with the overall thread topic - Investing 102 - but it is relative to this thread and it's timing in my world ......

I mentioned in my first post in this thread that the topic has motivated me to look at my retirement accounts. I had an IRA account with some dollars that were sitting in "cash reserve", and so I used the theory of this thread to move that cash into several stocks. Then, I looked at my current 401K and rebalanced those funds so that hopefully this coming year I'll see some growth there, other than my contribution.

Since I was on a roll, I decided to contact two previous employers concerning any pension benefits that I may have. I had rolled my retirement account dollars from one employer to the next as I moved thru my career, but I hadn't thought about much beyond that. So I contacted my employer from the 1989 thru 2000 timeframe and asked about any pension benefits, beyond my 401K. Lo and behold, when I retire at 65, I'll receive a small pension from them! Feeling good, I called my 1983 thru 1989 employer ... yep, pension cash from them also once I retire.

Although I'm only 52 and don't plan to retire until my mid-60's .... I'll pull in close to $800/month more than I had anticipated. All due to the energy around this thread!!!!

Now for that old man I cut grass for when I was in elementary school ......

[GregWeld]

Originally Posted by billscamaros

Here's a tidbit that I'll toss out ..... it doesn't have anything to do with the overall thread topic - Investing 102 - but it is relative to this thread and it's timing in my world ......

I mentioned in my first post in this thread that the topic has motivated me to look at my retirement accounts. I had an IRA account with some dollars that were sitting in "cash reserve", and so I used the theory of this thread to move that cash into several stocks. Then, I looked at my current 401K and rebalanced those funds so that hopefully this coming year I'll see some growth there, other than my contribution.

Since I was on a roll, I decided to contact two previous employers concerning any pension benefits that I may have. I had rolled my retirement account dollars from one employer to the next as I moved thru my career, but I hadn't thought about much beyond that. So I contacted my employer from the 1989 thru 2000 timeframe and asked about any pension benefits, beyond my 401K. Lo and behold, when I retire at 65, I'll receive a small pension from them! Feeling good, I called my 1983 thru 1989 employer ... yep, pension cash from them also once I retire.

Although I'm only 52 and don't plan to retire until my mid-60's .... I'll pull in close to $800/month more than I had anticipated. All due to the energy around this thread!!!!

Now for that old man I cut grass for when I was in elementary school ......

That is the best friggin' news I've heard all year! Good for you Bill!

Funny how we ALL somehow manage to kind of "disassociate" ourselves from our retirement and the funds etc. Yet - it is one of the most important things that we can, and should, manage to the best of our abilities!

Simple functions such as just being AWARE of what the money is doing - or not doing - and then spending as little as a couple of hours here and there a YEAR - to make sure there is something there when you'll really want it. All to often people start to take control AFTER they have retired. WTF - the time to do that is NOW -- when most have TIME on their sides to make hay while the sun shines....

[GregWeld]

On another note --- Way back up in the thread - someone asked me about a couple of stocks -- that were "defense" related... I don't remember the names or who it was that asked - but my thought was to be careful with this sector because I think with a couple wars winding down and the budget cuts coming - that defense spending is most likely going DOWN not up.... And todays news confirms that...

That is news that needs to be "traded" --- because you can't sit on your hands for 10 years or so while a company shrinks... So if you own "defense" related stocks -- I'd be getting out of those. Boeing has commercial aircraft and hopefully their sales overall can continue to grow.

Boeing and other defense companies face shrinking Pentagon budgets. The Defense Department is currently trimming some $450 billion over the next decade, and cuts could go deeper.

[GregWeld]

So here's something that "newbs" to investing 102 might not understand --

You get up one morning and your stock is "down" for the day -- and everything else you have is UP... WTF? What's wrong with that stock?

Dividend paying stocks go "ex" dividend on a particular date - it's well known - and is announced in advance.... and once they pay the dividend - the stock goes down because many dividend players just want to pick up the dividend and then sell the shares... AND the company has just paid out CASH so that affects the balance sheet.

I'll use AT&T as an example - since it went "ex dividend" today and it's down .50 this morning.... Here's what the notice looks like.


Regular Dividend of $0.44 went Ex: T began trading ex-dividend today, payable to shareholders of record as of 01/10/2012.

[CRCRFT78]

Since you brought up dividends, is there a time frame of when you'll start to receive them if you own some shares of that stock? If you bought Monday and Friday they're paying dividends, will you receive that? Lastly, is there a schedule when dividends are paid?

[James OLC]

Originally Posted by CRCRFT78

Since you brought up dividends, is there a time frame of when you'll start to receive them if you own some shares of that stock? If you bought Monday and Friday they're paying dividends, will you receive that? Lastly, is there a schedule when dividends are paid?

The Ex-Dividend date is a declared date which you must purchase the shares on or before. It's a couple of days prior to the technical date of record to receive the dividend (to allow for processing, etc.) Most (or probably all) dividend paying companies press release the declared dividends that will be and the ex-dividend date. I am not sure if all have fixed schedules (or if there is some latitiude allowed to ex-dividend dates) but all of mine are the same month-to-month or quarter-to-quarter.