Investing 102

[sik68]

I am fortunate my company disburses SEP IRA checks each year. Each year I would make all my stock purchases in a single day. This year, if for no other reason than to practice 'scaling in' I plan to buy over a 6 month period, having some money on the sidelines for a while. The impending rate-rise seems to loom over the market, so I would like to have some cash ready when the market reacts.

[WSSix]

The last two years, I have put my money into my Roth very early in January so it can start earning money. Both years the market went down right after. I think I'm going to wait a couple weeks with some of the stocks and see what happens this year. I'll have it all in by the end of January though.

[GregWeld]

This is the type of news I was referring to in my earlier post about OIL companies cutting dividends... So even if the share price right now looks like a bargain - they could fall further when the dividend payout doesn't provide support like it can and does many times.




Linn Energy LLC (LINE:US), the oil and natural gas partnership that’s lost almost 70 percent of its value in six months, cut its investor payout and production budget by more than half amid a rout in crude prices.

The company and its affiliate LinnCo. LLC will lower the annual payout by 57 percent to $1.25 a share or unit, Houston-based Linn said in a statement today. Production spending will drop 53 percent from last year, to $730 million. Internal cash is expected to cover both, Linn said.

[chichirone]

Greg, wondering if you can simply explain a master limited partnership (MLP). They seem to be a discount (falling), as is the entire oil/gas market, but how do these differ from a stock such as KMI? Is it an alternative tool or how does it complement a dividend investing strategy? Just curious on your thoughts as I feel I am over-analyzing the tool.

I have looked at: Alerian MLP (AMLP) or Kayne Anderson (KYN)

[GregWeld]

Originally Posted by chichirone

Greg, wondering if you can simply explain a master limited partnership (MLP). They seem to be a discount (falling), as is the entire oil/gas market, but how do these differ from a stock such as KMI? Is it an alternative tool or how does it complement a dividend investing strategy? Just curious on your thoughts as I feel I am over-analyzing the tool.

I have looked at: Alerian MLP (AMLP) or Kayne Anderson (KYN)

Master Limited Partnerships (MLP's) "dividend" is actually structured as a "return of capital" rather than a dividend or interest. Therefore the taxes on the "dividend" which is really a return of your capital is treated differently ---- UNTIL YOU SELL!! Of course this is over simplified...

90% of the income of an MLP by definition must be derived from REAL ESTATE - or NATURAL RESOURCES or COMMODITIES. Thus there is no "bank" MLP etc.


The two you mentioned are not themselves MLP's but rather ETF's (exchange traded funds) that INVEST in MLPS to drive their own income and thus declare a dividend to the shareholders.


Of the two mentioned - I'd personally invest in KYN (Kayne Anderson) over Alerian (neither of these are actually MLP's - they derive their income from MLP's).

It's important to note AND UNDERSTAND an MLP (where you are not a shareholder but rather - you are a PARTNER) versus being a STOCKHOLDER in a publicly traded company... So I'd direct anyone interested in these (MLP'S) to go here and make sure you "get it".



http://www.naptp.org/PTP101/Print/Ba...Principles.pdf

[GregWeld]

SO --- many of you guys have now been invested for a year or more.

What I'd love to ask you to do is to review your FEELINGS about being invested and more importantly.... HOW MANY OF YOU WOULD HAVE BEEN FREAKING OUT with the market this last week? How many of you would have panicked and punched the SELL button? Versus - sitting back and saying - Hmmmmmmmm I see some stuff to buy.


Interesting to review your mental status and see what you have or haven't learned with time.

[Payton King]

I know this is a little off track, but consider it company research. My step dad just sent me this video of the Tesla factory. Talk about cutting edge technology and cubic bucks spent on the factory. I was impressed.

https://www.youtube.com/embed/8_lfxPI5ObM?rel=0

[SSLance]

I've said just recently how much different I look at the market and my investments now as compared to in the past...thanks mainly to this thread.

The main difference for me is things are scaled way down with only a handful of really stable companies in my portfolio. This lets me be clearer with things going on, keep a closer eye on things, and more importantly the quality companies in my portfolio do not take the wild up and down swings with the DOW that the investments I held before used to take. This is comforting and exciting to me. I do look for down spots to invest more as I'm still less than a third reinvested, thankfully though, all of my companies are still up over where I originally bought them starting early last year. XOM is toeing the line but with dividends is still in the green.

Many thanks to Greg Weld and the rest of you touting this thread over the years, it has made a difference in my life and many others I'm certain.

[Vegas69]

The biggest difference for me is taking on more responsibility for my retirement. I had a little to much faith in my buddy which is my advisor and that's a poor excuse. I've analyzed all those moves and made adjustments and like the self managed stocks as part of the pot.

[captainofiron]

oil stuff and ATT has me feeling uneasy, but the others arent too bad. I guess that means I picked well

Unfortunately I lost my job right before Christmas, so no more investing for the time being.

I did get my 401k rolled over and bought some Conoco to bring down my cost basis on that one, actually its the first time I have used the limit function. I put it like 1.50 less than it was trading in the morning and amazingly (or not) it filled later in the day.