Investing 102

[GregWeld]

Originally Posted by Vegas69

I found this analysis on how other asset classes performed during the last two bear markets.

I would think Reits will perform better this time around vs. during the real estate collapse 10 years ago.

I own a bunch ($ wise) of REITS.... they typically pay real decent dividends and are pretty steady price wise. However... everything that is interest rate sensitive will ease down IF rates rise too quickly. We shall see how this plays out.

[ErikLS2]

Originally Posted by GregWeld

I own a bunch ($ wise) of REITS.... they typically pay real decent dividends and are pretty steady price wise. However... everything that is interest rate sensitive will ease down IF rates rise too quickly. We shall see how this plays out.

Ever heard of NRZ? They're a mREIT (m for mortgage) that holds mostly floating rate securities, like commercial mortgages, which is mainly why they claim they will do better in a rising interest rate environment. They also do something with mortgage servicing rights, but I can't seem to get my mind around just how they make money doing it so I haven't invested yet.

Anyway, have any thoughts?

[AMSOILGUY]

Originally Posted by GregWeld

Gotta ask -----


How many guys(gals) are happy SO FAR - that they didn't panic and sell because of the election?

Panic to me happens when you get caught off guard. You made it very clear in the beginning not to invest in things you don't understand or can't see changes in. No gambling! Its weird to look at down times as buying opportunities. I actually get more excited about the down days then the up days.

Call it dumb luck or maybe I was just listening but I was looking at doing new construction of a commercial building. Lots of people I was talking to kept saying that steel prices were going up. I bought 40 shares of (X) 6/27/16 for 15 bucks and now its nearing 30. Not to mention a very talked about sector since the election, I'm actually up 90%. I never thought it was possible. All my childhood all I ever heard was I wish I would have invested in that when it started or something along those lines from family.

Now how do you decide when to sell? I haven't wrapped my head around that part yet.

[captainofiron]

Originally Posted by GregWeld

Gotta ask -----


How many guys(gals) are happy SO FAR - that they didn't panic and sell because of the election?

that first day I was mildly concerned, but just closed all my apps/news feeds for the market and thought What would Greg Do, haha

[GregWeld]

Originally Posted by AMSOILGUY

Panic to me happens when you get caught off guard. You made it very clear in the beginning not to invest in things you don't understand or can't see changes in. No gambling! Its weird to look at down times as buying opportunities. I actually get more excited about the down days then the up days.

Call it dumb luck or maybe I was just listening but I was looking at doing new construction of a commercial building. Lots of people I was talking to kept saying that steel prices were going up. I bought 40 shares of (X) 6/27/16 for 15 bucks and now its nearing 30. Not to mention a very talked about sector since the election, I'm actually up 90%. I never thought it was possible. All my childhood all I ever heard was I wish I would have invested in that when it started or something along those lines from family.

Now how do you decide when to sell? I haven't wrapped my head around that part yet.

********** WHEN TO SELL ?? ****************




I hope I'm awake enough to have this make sense. Selling is the hardest decision to make! Whether you're selling at a loss or trying to capture a profit (gain).

Many factors to think about here:

If you take the gain (loss) is there taxable consequences (Long term or short term gain - makes a HUGE difference in tax rate)

Taxable accounts or IRA?? Makes a big difference!

Do you no longer believe in the underlying reason you bought?

Have you identified what you plan to buy with the funds generated? What makes you think the new purchase will perform any better than what you're planning to sell?

Are you nervous because of the success? Or are you nervous because you have plans to spend the profit and don't want to lose it? Do you need to diversify still - in other words - taking some gain will allow you to spread your wings a bit more.

Is there a dividend about to be paid or going "ex date"?? Don't shoot yourself in the foot and miss a dividend payment!!


These are not argumentative questions! They're just stuff to ask yourself.


Number one question is really -- If you are feeling that you should take some gain -- then DO IT. It's just that simple. You never should feel nervous about your investments

Rarely do I sell all -- I "trim" -- because when I dump the name - the next day it'll open UP $10..... So I drip out - just like I usually drip in.

[GregWeld]

Originally Posted by captainofiron

that first day I was mildly concerned, but just closed all my apps/news feeds for the market and thought What would Greg Do, haha

Answer:

Quietly crap yourself while hoping for the very best outcome! LOL

Truthfully -- THIS is when you really need to ask yourself if you're long term or a short timer. I fully expected to open up DOWN hard and go down for days if not weeks. I was looking to BUY on that kind of market not sell.

I'm still waiting for some shoe to drop... so I'm not fully committed YET... (rarely do I ever feel that confident - and cash is king in my world) but I have a THIRD of the cash I had pre election.

[GregWeld]

By the way --- Someone came in recently and asked about buying GOLD



I've always felt Gold is gambling. Why? Because the basic premise for owning gold is that it's a "hedge" against something going really wrong with the world. It's a fear trade. Unless you use the stuff to make something - what are you going to do with it? It doesn't pay a dividend to hold it. It goes up and down like a yoyo and I've never figured out WHY except for fear. I don't want to own fear. I want to own the FUTURE and PROFITS and DIVIDEND (cash stream).

Add to that -- who actually is holding your gold? Will they have cash when you want to sell and cash out? Or did the world market crash wipe them out too? Something to consider. This - of course - holds true for ANY investment - but I'm not buying stuff because I think the world is going to hell.

The Gold ETF (GLD) is DOWN 31% over the last 5 years.... while Altria (MO) is UP 126% in share price and has paid almost $10 in cash dividends on a $34 purchase price (back in November 2011).

[Vegas69]

Seems like it may be a good time to buy GLD.

I've also been seeing that mining companies of precious metals can be strong in bear markets. They look really volatile, but timing is everything.

I was up Elk hunting two weeks ago near a major Nevada gold mine. My friend builds drilling sites and reclamation. He's been crazy busy this year working for the mine. They are moving some serious dirt up there and drilling for new mines constantly!

I like what Buffet says, don't ever lose money. If we put ourselves in a comfortable position, many times, we can wait for the right timing. It can take 20 years, but... And I think that's been what you are trying to express all along.

I like some buckets that flourish when the market sucks. I have a majority of $ on the flip side. My whole premise here is to be prepared to find ways to take advantage when the tide goes out. Why not hedge some money on the down cycle? You know it's coming someday.

[GregWeld]

Originally Posted by Vegas69

Seems like it may be a good time to buy GLD.

I've also been seeing that mining companies of precious metals can be strong in bear markets. They look really volatile, but timing is everything.

I was up Elk hunting two weeks ago near a major Nevada gold mine. My friend builds drilling sites and reclamation. He's been crazy busy this year working for the mine. They are moving some serious dirt up there and drilling for new mines constantly!

I like what Buffet says, don't ever lose money. If we put ourselves in a comfortable position, many times, we can wait for the right timing. It can take 20 years, but... And I think that's been what you are trying to express all along.

I like some buckets that flourish when the market sucks. I have a majority of $ on the flip side. My whole premise here is to be prepared to find ways to take advantage when the tide goes out. Why not hedge some money on the down cycle? You know it's coming someday.

Okay --- so here's where we WANT to get to.....


Over time if the stocks you own and the houses you own are up lets say 50% over 5 years..... and they're paying you 5% average dividend.

When the market goes to crap -- you'll be DOWN 20%..... but your share or house value is UP far more than that IF you've owned the stuff for awhile.

Now on top of that -- you're collecting 5% cash all along the way... and you'll continue to get that until when? Until the market turns around and you're right back where you were and plus some. It's the way it's been working since the beginning.

So --- On just my WF account I collect over $400K a year in cash off of the dividends. Why would I sell that money maker because "MAYBE" the value of my holdings might go down temporarily? I don't run to sell my apartment buildings --- I bought them because they produce CASH -- and "eventually" we'll break even or sell for a gain I hope. We'll CHOOSE when to sell when the timing is right.

[Vegas69]

Happy Thanksgiving fellas!

What do you think? I ran across this ALL WEATHER portfolio by Ray Dalio in Tony's book. Seems like it could be a good strategy for those close to retirement if nothing else.
https://youtu.be/c0ARb1N-3kM