Investing 102

[GregWeld]

Originally Posted by 96z28ss

Who can live to see an investment 80 years? isn't that too long of a period to compare?? shouldn't a 50 year span be a better comparison?

Agree.... 80 years is a pretty long time. But if you started to invest like you should have -- at 21 --- and you retired at 65 -- and you lived until you're 90... that's 69 years... so we'll split the difference between 50 and 80 year terms and stick to 69 year terms from now on.

[Vortech404]

haha Greg I knew you were going to say that.

My other stocks are PG,MO,PFE,NU,VZ and UPS. So if I do MCD,KO and HD
I hit almost all sectors. It just fells better mentally to see 150 stares of a stock vs 20, 50, 25 lol I just got to get over that.

This is in a 401k so I'm in these for the long haul.

Thanks again

[GregWeld]

Originally Posted by Vortech404

haha Greg I knew you were going to say that.

My other stocks are PG,MO,PFE,NU,VZ and UPS. So if I do MCD,KO and HD
I hit almost all sectors. It just fells better mentally to see 150 stares of a stock vs 20, 50, 25 lol I just got to get over that.

This is in a 401k so I'm in these for the long haul.

Thanks again

Oh I totally get it.... I like stocks in big numbers and I tend to concentrate... but I'm not building a portfolio... I've already got it! HA!!

Okay - split the difference and buy TWO... 3K each name.

Nice portfolio by the way. You're doing really nice job.

My thoughts then on Home Depot (HD). I heard the CEO say they would only build 3 stores in the US this year --- the days of adding 500 stores is over. So this is a mature company that will do well if building is good and home sales are good.


McDonalds (MCD) -- stable -- asian growth... a history of raising the dividend payout. Did I mention stable? That's why I own it. It pays a paltry dividend - so I offset that with higher payers - but you guys shouldn't be trying to do this YET.... so just get your portfolios balanced and you'll be fine. I'd buy MCD on the dips -- it's range bound between low 90's -- and high 90's... buy when it's down 94 or so.


Coke (KO) -- The WORLD drinks Coke.... Warren Buffet gets a dividend from Coke annually that equals his original investment! Wouldn't we all like to be in that position?? Coke for me is like MikeyD's.... it's stable... and makes me sleep well at night... and I know my money is going to "be there". I like that.


Thus ---- the real question? How could you go wrong regardless of picking one - two or all three of these great companies? And if you don't buy one of them this year - buy it next year or the year after!

[Vegas69]

Originally Posted by Woody

You have over-looked the primary benefit of investing in real estate: Leverage. If I use your numbers of $7,800 in 1930 and assume a 20% down payment, the initial investment is $1,560. If the current value is $212,000, your return would be 6.3% annualized. The dow index in 1930 was 198 and as of today is 15,484. That equates to a return of 5.6% per year. The return on the real estate assumes that on average you break even on your rental income less expenses over 80 years. I would argue that on average over an 80 year holding period you would have a substantial positive cash flow, especially after the mortgage was paid off in 30 years. I also realize there would be dividends from the stock investment as well. It is really tough to make like comparisons with all of the variables that come into play, but my point is that the returns from both investments are pretty close.

I'll give you that in an investment scenario. The big factor is compound interest with stocks. That's what makes it a landslide for stocks.

[Vegas69]

Originally Posted by GregWeld

Just wanted to personally thank Todd for investing in the stock market and killing us all in the process!! HAHAHAHAHAHAHAHAHA



Welcome to learning about the little man on Wall Street Todd!!

100% Personal Responsibility.. See my healthy 101 thread for details. ha ha ha

[Vortech404]

Question about limit orders?

Are you guy's putting in the last traded price? How much below? %

Let's say I'm interested in purchasing 75 shares of KO. The last trade price was $39.40. What would you put your limit price at $38.89 because that was the after hour price?

Thanks
John

[GregWeld]

Originally Posted by Vortech404

Question about limit orders?

Are you guy's putting in the last traded price? How much below? %

Let's say I'm interested in purchasing 75 shares of KO. The last trade price was $39.40. What would you put your limit price at $38.89 because that was the after hour price?

Thanks
John

Okay -- so this will not be easy to say so that you "get it" but I'll try - just don't take offense because in order to make it NICE -- would take a page of explanation.

It just doesn't make a hill of beans doing a limit order for 75 shares --- when you do the math --- if you save 10 cents --- you're talking 7.50 total on the buy.... in the long run --- that's just not what is going to make or break an investment.

I'm buying 20 to 50 THOUSAND shares --- limit orders are then "real money" when you do that 10 cent math....

Having said that --- I'll answer your question --- I put in the lowest price of the day -- and do a day only trade. So if it's not filled - I can redo it the next day.

[Vortech404]

Hey Greg,
Thanks for your reply. I know my purchases are really small compared to yours. I thought I read on another page to always use a limit order and I was curious to how people came up with what they wanted to bid.

I guess if you are buying in small quanities to just buy at market price and get the shares.

At least now I know later when I'm buying 20-50 thousand shares to use limit order with the lowest price of the day!!

Thanks for all your help

[GregWeld]

Originally Posted by Vortech404

Hey Greg,
Thanks for your reply. I know my purchases are really small compared to yours. I thought I read on another page to always use a limit order and I was curious to how people came up with what they wanted to bid.

I guess if you are buying in small quanities to just buy at market price and get the shares.

At least now I know later when I'm buying 20-50 thousand shares to use limit order with the lowest price of the day!!

Thanks for all your help

My point wasn't to brag about the size of mine versus yours -- it was merely a reference of when a limit order is important and why they're used. There's real money to be saved when you're upping the ante a bit -- and on something in the 100 share range it's just really not very important and I feel that what IS important is just to get going and investing.... because most people don't have the time to be chasing shares daily etc. That one day - when you don't get your order filled --- and the next day the shares run a buck a piece! Now what did you "save" -- you just cost yourself a buck a share by trying to be "cute" and save 10 cents a share. Of course it goes the other way too -- but you get my point.

The other thing that people do is try to "time" the "EX" date of a dividend paying stock because the shares generally trade down the amount of the dividend being paid... thus you effectively pick up the dividend by just getting the discounted price that day ---- the problem with this is A) you have to wait for that date --- and in the meantime the shares may have run more than you're trying to "save" --- and B) once again - do you really have the time to spend chasing this small amount (in total dollars). If you're trading big blocks of shares 1000 or so per - then maybe - but not on 100 or 200 shares...

[GregWeld]

So since we were discussing real estate investing --- I view this "news" both great but also really worrying. Demand for any product - regardless of what that is - has a ripple effect.... Housing demand will make us feel good IF we already own a house... but will also lead to higher interest rates... Which is good if you're already retired... and not so good if you want to buy something with borrowed money. LOL


http://www.bloomberg.com/news/2013-0...ven-years.html