Investing 102

[GregWeld]

I feel like the "old man" here... trying to use my experience to herd cats...


I'd love to see a show of hands of how many felt "fear" yesterday with a measly down 300 day... vs how many saw a buying opportunity... vs how many said "ho hum" this is just the way the market works - pay no attention to it.

I bought a couple new positions in a different account yesterday. I'm not even going to say what they were because it doesn't really matter. What does matter is that I only bought part of a position. I nibbled. I expect to get another opportunity to add to my position and I actually hope to be able to average them down not up.

We need MORE earnings reports to see how the economy is going. I think it's going "okay" but I also feel it's still rather fragile. Just "okay" isn't where we need to be - we need to really get the engine humming again. It's so much more fun when things are smoking along at a good clip. STABLE is what I'd like to see -- not on top of the fence trying to balance.

Interesting by the way -- was the talking heads discussing FUNDAMENTAL changes in eating habits ---- regarding the big earnings beat by Chipotle Mexican Grill (CMG) vs the earnings "miss" by McDonalds (MCD). Is there a shift in eating by the younger generation -- to healthier "real foods"? It's something to pay attention to...

[GregWeld]

And here's another reason why DIVIDENDS actually COUNT! It's REAL MONEY!

While the market was dropping yesterday (and might again)... you're still getting paid to own this stuff! Gotta love that!

Wouldn't you love to build a PT car -- and at the same time have that car paying you while you enjoy it - drive it - wash it... all the time it's sending you a check? LOL




02/03/2014 Qualified Dividend T
A T & T INC NEW
$13,800.00

[SSLance]

It was an interesting feeling for me yesterday... When I was fully invested before, days like yesterday and the past week would have ate at me... Was pretty difficult for me to turn the PC off and go skiing. I'd be downloading my quotes into Quicken 3 or 4 times a day looking for the daily losses or gains total.

Yesterday though, I couldn't wait to get my new accounts set up and get them funded. I also spent quite a bit of time researching and formulating a plan.

Remains to be seen how I'll react to up or down days once I'm back in in one form or another though. That is actually a large part of how I'm trying to set this up...how to basically try to set it and forget it so that I don't dwell on the ups and downs.

Read this morning that we are basically at a 7% dip...not quite a 10% correction...yet.

[GregWeld]

Originally Posted by SSLance

It was an interesting feeling for me yesterday... When I was fully invested before, days like yesterday and the past week would have ate at me... Was pretty difficult for me to turn the PC off and go skiing. I'd be downloading my quotes into Quicken 3 or 4 times a day looking for the daily losses or gains total.

Yesterday though, I couldn't wait to get my new accounts set up and get them funded. I also spent quite a bit of time researching and formulating a plan.

Remains to be seen how I'll react to up or down days once I'm back in in one form or another though. That is actually a large part of how I'm trying to set this up...how to basically try to set it and forget it so that I don't dwell on the ups and downs.

Read this morning that we are basically at a 7% dip...not quite a 10% correction...yet.

Yeah --- It's also one thing to be on the sidelines and not actually have real money (skin) in the game. But that is an interesting observation on your part.

I expect more volatility going forward... We're just not going to have a market like 2013... that was like shooting fish in a barrel.

The reason (and remember that this is Investing 102) that I continue to urge folks to invest in the very best names --- and ones that pay dividends --- is because for the most part the dividend payers are buffered somewhat. And you can go to sleep knowing they're not going out of business... and when you see (read my post above showing my AT&T (T) dividends coming quarter after quarter it really helps to stay in the market.

I'd be freaked out if I was invested in pure growth stocks... and nothing else.

[toy71camaro]

The past week or to for me has just been a "aw, its bout time" sorta thing. I have no new cash to put to work right now, as I just finished my emergency fund. This year its back to investing for retirement (last year was purchase a house and rebuild emergency fund, but i already had my div stocks from an early 2013 ROTH purchase). So i got to watch my purchases and my Feb 2013 restructure of my 401k "ride the wave".

I feel tho, its just "part of the market". If i had money to put to work, i'd be looking at it a little different. But for now, i'm just holding tight.

On a side note, I keep a spreadsheet that automatically calculates the current +/- of my stocks, PLUS a separate column that automatically tracks my TOTAL RETURN. Thus, when I see stock XYZ down 3% today, I look a column over and see I'm still up 35% total return. So then its just a "sweet, maybe my next div check for that stock will purchase a few cents worth of more shares than last time." lol

[gearheads78]

I waited for a pullback for almost 3 months and just watched the train get farther and farther out of site without me on it. I finally got on board and of course had I waited maybe 2 more weeks would be in better shape. I am not scared of going down just wish I started from a lower platform to fall from. LOL
I did sell one of my 3 growth stocks FB today and bought something else I want to hold long term. I was up 19% on my FB and never intended to keep it long term so I let it go.

[GregWeld]

Originally Posted by gearheads78

I waited for a pullback for almost 3 months and just watched the train get farther and farther out of site without me on it. I finally got on board and of course had I waited maybe 2 more weeks would be in better shape. I am not scared of going down just wish I started from a lower platform to fall from. LOL
I did sell one of my 3 growth stocks FB today and bought something else I want to hold long term. I was up 19% on my FB and never intended to keep it long term so I let it go.

That's EXACTLY what happens.... the longer you wait -- the market goes against you... the minute you buy -- the little man on Wall Street yells "TAKE 'ER DOWN"!!! Happens every time... I don't care who you are or how much you've invested.

The KEY is ---- to go back 10 years -- 15 years --- 5 years --- and see that the charts are GENERALLY lower on the left and higher on the right ---- and that's what you need to "invest" in. This week - next month -- tomorrow.... is just a blip in time. It's like buying a house.... you MUST believe that down the road it will be worth more regardless of what it sold for last time or next week.

At least Stocks are LIQUID if you need the dough.... good luck getting any dough out of your house if you need it next Monday! LOL

[gearheads78]

Originally Posted by GregWeld

At least Stocks are LIQUID if you need the dough.... good luck getting any dough out of your house if you need it next Monday! LOL

Not mine (so far...) just working with my 401K rollover IRA

[GregWeld]

Originally Posted by gearheads78

Not mine (so far...) just working with my 401K rollover IRA

True.

[SSLance]

Tell me if you see any holes in my theory here please...

What I did first was pick out 30 dividend paying stocks based on what I've read here and a few other places, I then built a model portfolio by taking 10% of the total amount I want to invest and buying however many shares I could of each of the 30 stocks. I then took the last 12 months of dividend payments for each individual stock, multiplied it by the number of shares I purchased thereby simulating what my dividend income would have been off of each stock had I owned it the past 12 months.

I then took the 10 highest performers to model my portfolio after...

I know it's looking back instead of looking forward, but it was an interesting calculation and I now have a much better idea of what I can expect from each stock and the total portfolio.

What I plan to do is to buy 25% of the total number of shares of each of the 10 stocks...every 2-3 weeks until I've got them all.