Investing 102

[CRCRFT78]

I've got what I consider to be a small but decent portfolio. As the money (dividends, gains) start to come in it will be reinvested and I will slowly add to it. KMP is one of my holdings.

[Bucketlist2012]

Originally Posted by CRCRFT78

I've got what I consider to be a small but decent portfolio. As the money (dividends, gains) start to come in it will be reinvested and I will slowly add to it. KMP is one of my holdings.

Very Nice.. You will profit greatly down the road, as I believe , even witht the lateast run up to 13,000, that in a longer span, things are still on sale...

and we get paid while they move around, and then up

[GregWeld]

Originally Posted by solarguy09

Like Greg said..

An example is KinderMorgan, Great 1 yr....Even better 3 and 5 year Total return , and up a buck a share today

So if you own________-shares of it....

a dollar and sixteen cents dividend per share coming tuesday..

I have limited skills, but skills... More skills to come..

6000 shares -- UP $74,070.00 -- and collecting those dividends on top of that...

[GregWeld]

Originally Posted by CRCRFT78

I'm debating on an iPhone also. I wish I was able to own more than the measely 6 shares I have now. They start paying a dividend and I might have to see if I can squeeze a couple more shares out of what little money I have.

It's all about the PERCENTAGE return on your money... doesn't make any difference what the share price is -- 10% growth is 10% growth...

Don't try to buy "more" just because they're winners now -- don't get led down that path... DIVERSIFY. Look at your gains -- kiss them - write 'em down on a piece of paper and sleep with them under your pillow... but don't let GREED talk you into more of a good thing... That strategy will turn around and bite you. You set your limits - and stick to them.

Repeat after me --- BALANCE.... it's all about BALANCE....

[Bucketlist2012]

Originally Posted by GregWeld

6000 shares -- UP $74,070.00 -- and collecting those dividends on top of that...

Ah Chichawa .

Told you folks.. Me...400 shares....So little guy pay attention...Up 400 dollars and waiting on the dividends...

35 grand making 400 dollars today, and dividends all the time..

Just to give the regular guy the idea of a much smaller scale for reference..

But spread it around like he says...We tend to want to buy more of the hot thing and we lose the safety /risk balance....

don't do it..

[GregWeld]

Originally Posted by solarguy09

Ah Chichawa .

Told you folks.. Me...400 shares....So little guy pay attention...Up 400 dollars and waiting on the dividends...

35 grand making 400 dollars today, and dividends all the time..

Just to give the regular guy the idea of a much smaller scale for reference..

But spread it around like he says...We tend to want to buy more of the hot thing and we lose the safety /risk balance....

don't do it..

Oh --- KMP was only up $6120.00 for me TODAY.... I was showing the unrealized gain on my current holdings.... Hey! $400 or $40 or $4000 it's GAINS... FREE MONEY!! I love free money!

[GregWeld]

Investing is all about PSYCHOLOGY....

Let me tell you right now - and you write this down... when the market is going UP -- you feel good! You feel SMART! You feel invincible!

Ditto that on your house value

Ditto that on your hot rod value

But there will be a day - weeks - months - maybe even a year or two - when the market goes DOWN -- it goes down and you're dying the death of a 1000 cuts... you WILL feel like selling everything - you'll feel STUPID for having invested in the first place - and even stupider for buying MORE of something "back when" just $5 below it's all time high...

That PSYCHOLOGY will eat away at you in a losing market. Please prepare yourself for this! Because that is when you should buy even more! Like buying a house right now -- low cost and lower rates! Or buying that $150K Camaro that sold at Barrett Jackson for $50K in 2009.... Remember those talking heads (idiots) on Speed TV saying over and over again ".... that was well bought..." Trust me - the people that were buying THEN -- they're the smart guys right now.

Get your heads around that "buy low"....

The problem is - NOBODY can tell you when this is going to happen -- so you must just keep a steady hand - and continue to plug away - good market or bad market... because we could be in a 10 year bull market or we could head south tomorrow. Nobody ever seems to see it coming... but this is why you need dividends -- and you need diversity -- and you need good stuff that you can live with.

Think about it this way...

A stock is like a house... let's say you buy a house and you just leave it empty and wait for the market to rise so you can make a return on your money.... OR you can buy that same house - and rent it out... collecting the income... and after 10 years the house should be worth more AND you got all that rent. In the mean time the house might have gone down in value and then even - and then up or even stayed down but the guy is still paying you rent. Which would you rather do??

[GregWeld]

Here's a very good explanation about what Annaly (NLY) and others like it do -- and what they're risks are... it also explains why they "missed" this quarter (someone asked about this in an earlier post).

This article is well written - and makes this "relatively" easy to understand.

http://seekingalpha.com/article/3554...ajor-new-risks

[GregWeld]

Again --- someone asked about how "I" know when to sell a stock...

Mostly what we've talked about is how to BUY - and why to buy - but it is just as important to know when to SELL...

I stumbled upon this fairly well written "opinion article" about how one fund manager makes this critical decisions... and it mirrors most of my thinking.

When the position is too big (has grown) - or when there is a fundamental change - good or bad... or sometimes when you were just "wrong" about how you thought the stock would act.

http://seekingalpha.com/article/3526...d-when-to-sell

[Bucketlist2012]

Originally Posted by GregWeld

Investing is all about PSYCHOLOGY....

Let me tell you right now - and you write this down... when the market is going UP -- you feel good! You feel SMART! You feel invincible!

Ditto that on your house value

Ditto that on your hot rod value

But there will be a day - weeks - months - maybe even a year or two - when the market goes DOWN -- it goes down and you're dying the death of a 1000 cuts... you WILL feel like selling everything - you'll feel STUPID for having invested in the first place - and even stupider for buying MORE of something "back when" just $5 below it's all time high...

That PSYCHOLOGY will eat away at you in a losing market. Please prepare yourself for this! Because that is when you should buy even more! Like buying a house right now -- low cost and lower rates! Or buying that $150K Camaro that sold at Barrett Jackson for $50K in 2009.... Remember those talking heads (idiots) on Speed TV saying over and over again ".... that was well bought..." Trust me - the people that were buying THEN -- they're the smart guys right now.

Get your heads around that "buy low"....

The problem is - NOBODY can tell you when this is going to happen -- so you must just keep a steady hand - and continue to plug away - good market or bad market... because we could be in a 10 year bull market or we could head south tomorrow. Nobody ever seems to see it coming... but this is why you need dividends -- and you need diversity -- and you need good stuff that you can live with.

Think about it this way...

A stock is like a house... let's say you buy a house and you just leave it empty and wait for the market to rise so you can make a return on your money.... OR you can buy that same house - and rent it out... collecting the income... and after 10 years the house should be worth more AND you got all that rent. In the mean time the house might have gone down in value and then even - and then up or even stayed down but the guy is still paying you rent. Which would you rather do??

If you were in the market this last year, and you stuck with it and did not panic, then you are on your way.. If you bought in the low areas in 2009, you are even farther..

Because the moments of 500 point up or down, do not matter...Sure, many days in a row are unsettling, but in the end you will come out on top..

After all the volatility of 2011, I stuck with my plan, took a monthly paycheck all year long, and still have more than I started with...

So again, the fluctuation in balance is not to be worried about..

Many I know cut and ran in 2008, and some this last year threw in the towel after 1000 point losses...

Some are talking under the Mattress...

You got to study enough to get passionate about it, and then make informed decisions...

The best ?? Probably not right out of the gate, but with info from this thread,WAY farther than most..

But don't put in money that you need now or soon...It will have to work overtime and will not be able to see you for a while..