Investing 102

[CornHusker4Life]

Originally Posted by GregWeld

Jarrod ---- The 5% per investment is a "goal" -- this goal is very hard to obtain until you're at about $100,000 total invested. At that point - 20 stocks with about $5,000 gets you there.

Now --- Everyone needs to remember that this investment goal can include more than just stocks -- because what it's really trying to say to people is that you don't want to have too much RISK in any one thing that could possibly do real damage to your investments. If one 5% investment went to ZERO -- it's really not a huge loss -- versus if you had 35% in one thing... so it's really nothing more than a guiding point.

That is what I was thinking. I did not want to own 20 stocks with $33,000 in the market just to get to the 5% goal. Time to max out my wife and Is Roths for the year. Thanks Fellas

[GregWeld]

Originally Posted by SSLance

I'm in a bit of a quandary here... I have 11 holdings (12 if you count cash). Each of my 11 are currently valued at around 5% of my total except for 3 which are 2.5-3% of my total. As you can imagine, those 3 are oil related stocks.

So while looking to step in the market a bit more today, and balance the portfolio out...numbers say to pick up more of those 3 stocks.

Should I pay more attention to balancing my holdings back out...or add to those stocks that haven't got as beat up as the others? I still like and am holding XOM, ETP and KMI, I'm just not as enamored with them to keep on adding to them as much as I have already done during this slide.

I'm leaning toward adding 1% to the other 8 winners instead.

A very common dilemma!!! Most tend to want to pile into the winners... and loathe putting more money into "bad" investments (the losers). What I want to do is what feels right at the time.... and what my thinking is about how long the losers are going to maybe be losers... and whether or not they're going to be down long enough for me to put money in later rather than be "early" and have 'em sit and be sad sacks.

Right now the market is just a disaster - which is a good opportunity to buy some things at LOWER PRICES than they've been at. Lower prices does NOT mean they're at their lows... they're just lower than where they were or have been.

So -- do what you feel right about... and give some thought to what your time frame is for when you think the losers might begin some recovery. If they're oil related - my sense is you have a year or so maybe less... So there's plenty of time to wait on the side until you have confirmation these are coming back. If they're just market losers because the whole market is down - then those should come back when the market turns back.

You also may want to look at this in another way -- i.e., look at what percentage each name is down -- and then see which name(s) could be invested in to average your yield up and your cost down.... so maybe it's only 2 or 3 names that are down just a few percentage points - and buying more shares of them would raise your yield half or more points.

[GregWeld]

Originally Posted by slow4dr

It always seems like you're speaking directly to me. I moved funds to my just opened Roth IRA this week. I've been watching every single one of my stock picks go down each day this week so I've been hesitant to pull the trigger. These are going to be long term holdings and I chose them specifically with that intent so I just need to sack up and jump in.

Without divulging how much you have to invest -- remember that you don't need to buy an entire position all at once... and you don't need to invest 100% of the funds you have all at once. If you have $4,000 ---- try to identify what it is you want to buy - and how many shares total - and then just invest $1,000 and wait - see where we're going - up or down - and put some more to work. Or if you want to own 20 shares of X -- just buy 10 now - and wait and so on.

[slow4dr]

Originally Posted by GregWeld

Without divulging how much you have to invest -- remember that you don't need to buy an entire position all at once... and you don't need to invest 100% of the funds you have all at once. If you have $4,000 ---- try to identify what it is you want to buy - and how many shares total - and then just invest $1,000 and wait - see where we're going - up or down - and put some more to work. Or if you want to own 20 shares of X -- just buy 10 now - and wait and so on.

Like you've said before....."Scale in" ........

That actually brings up a question. The law says I have until Tax day 2016 for the 2015 IRA investment year. Do the funds just have to be placed into the account before Tax day to count for 2015? Or do I have to actually invest said funds before Tax day?

[SSLance]

Originally Posted by GregWeld

You also may want to look at this in another way -- i.e., look at what percentage each name is down -- and then see which name(s) could be invested in to average your yield up and your cost down.... so maybe it's only 2 or 3 names that are down just a few percentage points - and buying more shares of them would raise your yield half or more points.

Yeah, that's what I started working on today...checking and calculating the yields out. That makes good sense. BTW, the freaking ETP yield is 14% right now... I also looked at which of my stocks are paying dividends soon...

[SSLance]

Originally Posted by slow4dr

Like you've said before....."Scale in" ........

That actually brings up a question. The law says I have until Tax day 2016 for the 2015 IRA investment year. Do the funds just have to be placed into the account before Tax day to count for 2015? Or do I have to actually invest said funds before Tax day?

You just have to have the funds into the account... It can sit there in cash all it wants too...

[GregWeld]

Originally Posted by slow4dr

Like you've said before....."Scale in" ........

That actually brings up a question. The law says I have until Tax day 2016 for the 2015 IRA investment year. Do the funds just have to be placed into the account before Tax day to count for 2015? Or do I have to actually invest said funds before Tax day?

Just funded. Nothing says you can't hold cash in an account. So you're good to go.

[Vince@Meanstreets]

Thats why I love to stash in KO.... that stock just sits flat no matter what is going on with the market. And its a divi stock. win win

[GregWeld]

Originally Posted by Vince@MSperfab

Thats why I love to stash in KO.... that stock just sits flat no matter what is going on with the market. And its a divi stock. win win

All accounts NEED "steady Eddies". People get upset when the market is going up and their steady eddies just kinda plod along. They think they're "losing out" on all the big gains. But man are they happy owning them when the market is crappy and the old steady eddy is holding up their entire account.

That's the thing about investing - and everything we've discussed for the last half a zillion pages....

Don't get greedy
own some steady eddies
own dividend stocks - so you're earning while things are flat or down
own the best of the best - so you feel good about what you own
be patient
buy when things are "on sale"
don't load the boat with too much of any one thing - the 5% rule
scale in
scale out
watch for fundamental changes - they can go either way

[GregWeld]

Boy is this market poopie....

I remember discussing many of the Wall Street darlings - IPO's of late - late being within the last couple years.... since there were so many big ones that came to market.

Just noticed GoPro (GPRO) which many of us use to capture our track events etc.... has just absolutely tanked since hitting it's euphoric high of $65... They just announced layoffs (they coat it in PC speak of realigning with the needs of the company. LOL)... and it's now trading at $14.61

JUST OUCH -- even if you managed to buy on the first day.

I have some "oil and related" that are just as bad. Not picking on GoPro.... just saying - sometimes these IPO's don't pan out with the hype they come on the market with.