Investing 102

[Bucketlist2012]

Just gotta love making money..

I was going to mention on the thought of not watching the balance and focus on the income stream..

And as greg just mentioned about having some high yielders for some money parking, along with your mix of steddie eddies..

i just parked in a fund that i knew was undervalued, getting hammered , and i knew that it would rebound and go back up..High dividend payer no matter what the balance..

Since timing the market is useless, you time as close as you can..

So i bought it, and it kept falling...2 grand later, still falling...Paying a double digit dividend while waiting...

Then boom, it starts to rise.., but I made the money back, and now it is moving the right direction , and it will settle much higher and continue to grow, but man....patience and research..all while getting paid 14%....HELLO... sweet deal..

Also i just got more dividends in, while i played in the garage.. 400 bucks, but again, when you have 17 of these, this all adds up..

i may never know what shorting a stock is, or stop loss, or any of that...

But by using the basics, i don't need to know that voodoo mumbo jumbo...

The EDIT, is my investment that turned around is up again 500 dollars so far this morning and it still has 50% to go to get back where it was... a 14K investment...

These are small, very small plays in the portfolio, and NOT a steady eddie.

But money in cash is for rainy days and daily expenses..

I have also down sized my emergency cash, since all my assets are liquid , except the 401K.

Before I needed a 6 month wad to sleep...When bank rates are high again, i will do it, but for now, it is working to fight Inflation..

ALL other employees must be working ,here or abroad, or they are fired...

Your money sits in the bank........crushed by Inflation, or it is at work battling for you while you work, sleep, play, type...

[GregWeld]

Yep -- I love dividends...

Got up this morning to two dividends -- HYG paid me $3295 and PFF paid me $1053

[Bucketlist2012]

Originally Posted by GregWeld

Yep -- I love dividends...

Got up this morning to two dividends -- HYG paid me $3295 and PFF paid me $1053

Very nice...

I try to give the troops some of my info to give a smaller perspective. 400 dollars overnight. One fund out of 11.

Sorry before I said 17, but 11 are dividend payers..

Still, enough wealth at work, that took decades to earn, let alone SAVE.

Cause we all know , "it isn't what you earn, but what you keep", and "It isn't what you have, but what you own/Worth"..

But you always get me jacked and excited.

Because I get to feeling smart and powerful, and then i realize that I am just a puppy in this game.

All be it, a very Lucky and Smart Puppy, but I tell my Wife, "you just wait".. Because I am going one direction..Up..

I have been poor, and rich, and then poor and then rich(rich to me),..I think I have enough smarts now to stay in the right direction..

But more learning is on my List for 2012...As it has been for many years..

Keep up the Great work Greg, i am here to rally the troops , and to chime in with specifics on occasion..

P.S. I did manage to change my 401K to now yield 9.5%... I am working with limited choices, but hey, I will keep an eye on it.

It only holds 10% of the total portfolio due to mumbo jumbo and fees that are written in mandarin Chinese.. The Schwab account is crystal clear.

Also due to heart and brain problems 2 years ago, i had to retire from working.. To what ?? The greatest time in our history for making money.Talk about luck.

[JKnight]

Originally Posted by GregWeld

so while I certainly understand them and will explain them here I don't think they're a good strategy for Investors 102...

I completely agree with the risks of setting a stop on your Steady Eddy dividend paying stocks. You are correct that getting stopped out would not be beneficial to the long term strategy.

Going back to the quote I highlighted earlier, there are certain stocks (NLY) with a known potential catalyst (rising interest rates) that you would want to bail out of before you take a 50% (or whatever % you choose to be tolerant of) hair cut. These stops do not have to be kept "tight", within 5% of current market value. My view is that this could allow me to notbe the guy watching the market all day every day because I know that if things get rough, I've got a standing order to get me out.

Which leads to my next thought. I can use a trailing stop (set at any amount below current MV according to my individual risk tolerance) on my more speculative plays to "lock in" a profit as discussed in your tax post a couple days ago. Profits are good, so if things get rough, I can take my profit and retrain those soldiers. If things continue to be good, my stop will increase accordingly to lock in more profit.

Again, these stops don't need to be set tight and I gain the freedom to not be watching the market all day to make this happen.

Edit: Personally, I will put a stop below where I deem the technical "support" level to be, so that if the bottom is falling out of a stock I can get out as well. Plus, nobody says I can't buy back in when the stock has found it's next support level. These may be the strategies of someone who is risk averse, but when you're playing with my bankroll, ya gotta be careful!!

[CRCRFT78]

For those that are new to investing and don't necessarily have a grip on it yet click the link below.
http://wharton.pearsoncmg.com/otis/

This is a stock investment simulator I've used in class. It cost $20 but it will allow you to trade, buy, sell and just get an understanding of the market without losing REAL money while learning. Just a thought for those of you still a little worried about losing your hard earned money.

[GregWeld]

Originally Posted by JKnight

I completely agree with the risks of setting a stop on your Steady Eddy dividend paying stocks. You are correct that getting stopped out would not be beneficial to the long term strategy.

Going back to the quote I highlighted earlier, there are certain stocks (NLY) with a known potential catalyst (rising interest rates) that you would want to bail out of before you take a 50% (or whatever % you choose to be tolerant of) hair cut. These stops do not have to be kept "tight", within 5% of current market value. My view is that this could allow me to notbe the guy watching the market all day every day because I know that if things get rough, I've got a standing order to get me out.

Which leads to my next thought. I can use a trailing stop (set at any amount below current MV according to my individual risk tolerance) on my more speculative plays to "lock in" a profit as discussed in your tax post a couple days ago. Profits are good, so if things get rough, I can take my profit and retrain those soldiers. If things continue to be good, my stop will increase accordingly to lock in more profit.

Again, these stops don't need to be set tight and I gain the freedom to not be watching the market all day to make this happen.

Edit: Personally, I will put a stop below where I deem the technical "support" level to be, so that if the bottom is falling out of a stock I can get out as well. Plus, nobody says I can't buy back in when the stock has found it's next support level. These may be the strategies of someone who is risk averse, but when you're playing with my bankroll, ya gotta be careful!!

These are good strategies Jeff... but are far more sophisticated than this thread was intended for. However... Personally I'm glad you brought them up because these are terms people hear about - and there's no reason to not discuss and learn about them. Perhaps someone doesn't use them now -- but knows about them and is willing to investigate them.

I forget that people don't start their day off with coffee at 6AM and then wait for the market to open to see what's happening. I've been doing this for 20+ years and I forget that other folks actually have lives...

[Bucketlist2012]

Ouch.

I think we have lives, we are just obsessed...

I SAY that the overall balance does not matter, and the Income Stream, and the Yield do..

Then why do I do the same thing, west coast time, and check the market, and the balances..

Because I am crazy, and I usually work on other things while I start the day..
Taxes, project outlines, ect..

but checking this thread is a daily stop...too much info to learn..

[Woody]

Greg,

I was wondering what your thoughts are about the NLY earnings report. Revenues increased on a year over year basis, but EPS declined. Also, the dividend for 2011 declined from 2010, which is the first decline since 2006.

Early warning signs to be on the lookout for or does this not concern you? I know they still pay a great dividend, but does the declining dividend worry you at all?

In general, how do you handle declines in revenues and/or EPS on a year over year basis. Does it take more than one yearly decline to cause concern.

[Bow Tie 67]

Total newbie here when it comes to making informed decisions on investing.

FYI called Schwab today to open an account. I have been with Scottrade for several years and they do NOT offer dividend reinvestment. Yes their trades are $7 compared to $8.95 but my thinking is the free reinvesting is well worth the difference. While talking with Schwab I was informed they are not in it for the fees. Sales talk? or not I'm moving to greener pastures as far as I'm concerned.

Greg the previous post about your thoughts with NLY has my attention.

Thanks guys for all you experience and time.

One last thought, I have been talking with my youngest, she is 18 and has 7k saved, I'm working on her to invest 5k of it in a Roth and forget about it. My thoughts are 5 Best of bread spread through the OIL, Retail, Food, Pharm, and Util sectors. .................. Thoughts? If she buys it, I'll even let her pic the stocks based on what she likes. LOL

[GregWeld]

Originally Posted by Bow Tie 67

Total newbie here when it comes to making informed decisions on investing.

FYI called Schwab today to open an account. I have been with Scottrade for several years and they do NOT offer dividend reinvestment. Yes their trades are $7 compared to $8.95 but my thinking is the free reinvesting is well worth the difference. While talking with Schwab I was informed they are not in it for the fees. Sales talk? or not I'm moving to greener pastures as far as I'm concerned.

Greg the previous post about your thoughts with NLY has my attention.

Thanks guys for all you experience and time.

One last thought, I have been talking with my youngest, she is 18 and has 7k saved, I'm working on her to invest 5k of it in a Roth and forget about it. My thoughts are 5 Best of bread spread through the OIL, Retail, Food, Pharm, and Util sectors. .................. Thoughts? If she buys it, I'll even let her pic the stocks based on what she likes. LOL

EXCELLENT!!

Happy to discuss anyones thoughts on stocks etc any time...