THEY MIGHT NOT MAKE MONEY BUT YOU STILL MIGHT HAVE TO PAY TAXES

Just finished reading a new prospectus from one of my former holdings, which only convinced me that I was right to get rid of my shares.  Prospectuses can be a slow read to say the least, but this one really took the cake.  It involved the same list of investment risks as other prospectuses normally contain, but was written in such a way as to imply the company has never really made any money,  they don't really try very hard to make shareholders any money, but you still may have to pay taxes on distributions as if you had made money.  Granted, paying taxes on some fund distributions even though you've actually suffered a loss, is not unheard of.  However, the blatant way in which these guys came right out and said they weren't really trying to make shareholders any money and were still going to charge a management fee, is either the height of honesty or audacity, I'm not sure which.  Glad it's no longer part of my investment portfolio. 

OFF TO A GOOD START

Well the week is off to a good start with the stock market closing slightly higher.  I suspect the higher close is mostly attributable to less than expected damage from hurricane Irene over the weekend.  Given that, and remarks from Bernanke on Friday of last week, I still wouldn't hold out much optimism for any major upward moves anytime soon.  Right now I'm sticking with the buy low strategy, adding to positions in some of my best holdings while the price is down.  If I'm right, it could be a big payoff somewhere down the road and in the mean time I'll collect more in dividends with the increase in number of shares in my portfolio.


Got some great deals over the weekend at Gerbes and Walgreens matching coupons with store sales.  Saved 40% on my grocery store purchases and closer to 70% from Walgreens.  Anybody not using coupons is passing up a great opportunity to save, save, save!!!

Got my sign-up paperwork back from Edward Jones for the company savings plan.  Kind of anxious for payday to see if they've started the witholdings.  If, as I suspect, the before tax witholdings have little effect on my take home pay, I'll most likely increase witholdings within the next month or two.  I'm not maxed out on matching contributions, so I could increase my own contributions as long as it doesn't cut me too short on cash flow.  Just have to wait and see...

Requested another check from SendEarnings.com.  This will be my third check from them.  I intend to use it to repurchase some UVE stock I sold in my taxable account.  Got the medical bills down from my heart attack and follow up care, so I'm really concentrating on rebuilding my investment and cash positions.  If my health and the economy holds out, at least as well as it has been going, I should be in pretty good shape by this time next year. 

COMPANY SPONSORED SAVINGS PLAN

Recently I was talking to one of the guys at work about signing up for the company sponsored savings program.  Although he is also eligible, he said he was probably not going to enroll.  Now our company, like many others now days, is a little tight fisted when it comes to giving raises.  They are few and far between and you're not going to get much of one regardless of performance.  The guy I was talking to is also one of those guys who are constantly complaining about not getting a raise.  Yeah, I like raises too, but there is something to be said about the number of people out of work right now and being thankful that you at least have a job.  That being said, why would you pass up an opportunity to help yourself to a raise.  Where we work, they might be stingy with raises, but their savings plan is quite generous, offering a dollar for dollar match of employee contributions.  For every dollar we put in, our employer contributes an equal amount, up to a certain percentage of our pay.  Why would you pass that up???  It's like they're offering you the opportunity to give yourself a raise.  I don't know about anybody else, but if the only thing I have to do is save a little money to get more money from work, I'm going all in.

I'm afraid he didn't see it that way.  He said he couldn't afford to defer any of his pay for savings, even though I explained to him that money withheld in "before tax" dollars would most likely make little if any difference in his take home pay.  This is something most people fail to realize.  If you're withholdings for savings are in "before tax" dollars, your taxable income is less and therefore you pay less in taxes on the remaining paycheck.  Which means that often times, your take home pay remains relatively unchanged.

As I've mentioned before, I have no real plans to continue working for my current employer until I retire.  However, why shouldn't I take full advantage of all the benefits they have to offer while I'm there?  No matter how much I end up saving, with employer matching contributions and more than 10 years before I plan to retire, it could definitely add up to a significant amount of money when I'm likely to need it most.

COUPONS, COUPONS, COUPONS!!!

Attention Couponers:

Sunday August 28, 2011;  There will be 3 coupon inserts in the Sunday paper.  One Proctor & Gamble, one Red Plum and one Smart Source.  Don't miss out on the chance to stock up on some great coupons!  A lot of my coupons expire August 31st, so it will be great to pick up new ones for more great deals on shopping.  This week I'm taking advantage of the buy 10 get $5 off and buy one steak get one free deals at my local Gerbes store.

MARK CUBAN VIDEO ON WSJ.COM

I enjoyed the "Big Interview" video with Mark Cuban on WSJ.com (click on title for link).  Especially liked what he had to say about diversification in today's stock market.  His comments about the best place for the average American to put their cash to work really hit home with me.  Especially the part about paying off credit card debt and stocking up on non-perishables for the home.  You're putting the money to good use by reducing high interest debt and protecting future purchasing power by stocking up for the home and avoiding future inflation.  Smart moves with much more potential for getting the most from your money in today's economy.

BUYING ON THE DOWNSIDE

We had a tumultuous week with the stock market to say the least.  However, I was able to take advantage of the lower stock prices to add to my positions in Clorox, EVEP, LGCY and SGU.  These are all long term holdings in my taxable portfolio.  I also managed to get things moving with work so I'll be able to take advantage of the generous 401k plan there.  They offer a dollar for dollar match up to 5% of my salary.  While I've always looked at my current job as a place to ride out the economic downturn, meaning I hope not to be there much longer, I figure I might as well take advantage of the opportunity to build on my investments while I'm there.  I can always do a rollover on the 401k when I leave.

I doubt we've seen the last of volatility in the market, so I'll be looking to add more to my current investments in the coming weeks and months.  As long as the market is down I'm looking at it as a sale on future dividend income.  So I'll be buying as much as I can afford.  Let's face it, volatile or not, with interest rates in the toilet for the foreseeable future, the stock market is still one of the best games going.

THE MARKET PLUNGES OVER 600 POINTS, OPPORTUNITY IS KNOCKING!

The market plunged over 600 points on the first day of trading after the S & P announced its' downgrade of U.S. debt from AAA to AA+.  While many are fleeing the market for the supposed "safety" of gold and bonds, I'm looking at things from a different perspective.  The U.S. stock market is having one hell of a sale!  Stocks which were valued at much higher prices just last week are down several dollars per share.  So I'm thinking it's time to pull out the stops and go all in.

I'm not recommended this for everyone else, it's what I personally have decided to do in response to the latest market reversal.  It worked out well for me in 2008 and 2009 and I'm looking to repeat the process.  So I've once again set all stocks in my investment portfolio to reinvest dividends, which I'll continue to do until we see some recovery in the market.  Right now I'm hoping that will be way down the road.  The longer I have to pour money in at the lower prices, the better it will be when the market recovers. 

In the mean time, I'll be satisfied knowing that I'm adding to my dividend portfolio at greatly reduced prices.  I'll also be boosting regular monthly investments to both portfolios for the foreseeable future. 

KRAFT SPLIT--GOOD OR BAD?

Kraft has announced plans to split in to two separate companies, spinning the second company off to shareholders by the end of 2012.  One will be a global snack business and the other a North American grocery business.  The grocery business, with revenues around $16 billion a year, would include its' U.S. beverages, cheese and convenience meals with brands like Maxwell House coffee and Jello.  The snacks company would include their high growth European and developing markets units along with their North American snacks and confectionery business, with annual revenues around $32 billion.  It would include brands such as Oreo cookies and Cadbury.

Krafts two largest investors, Warren Buffet (Berkshire Hathaway) and Nelson Peltz are both fine with the split.  Peltz pointed out that it was in the "best interest of shareholders" to separate the high growth snack business from the meat and cheese business.  Allowing investors to take advantage of both companies.  My only real concern is how debt will be divided between the two companies.  We'll just have to wait and see how that goes.  Otherwise, I'm thinking it's a good thing for shareholders.  I'll be adding to my position in Kraft (KFT:NYSE)  in the months before the split.

DOG DAYS OF SUMMER

Well here it is, August 2nd, central Missouri continues to suffocate under sweltering heat, I'll sure be glad when the heat wave is over.  The heat in Washington saw some relief with the deal to raise the debt ceiling, although I wouldn't say it was a victory for either side or for the U.S. economy for that matter.  Be that at is may, most seasoned investors know that adverse market reactions to bad economic news make for great times to pick up bargains on good stocks.  So I'll be concentrating on adding to some of my positions while prices are down and looking for bargains on new additions to my portfolio.  I think I made a good decision to sell some stock last month and pay off high interest debt.  Not only did I free up cash flow, but I got out of the stocks before further declines and put the money to good use.

Collected some great dividend payments at the end of July and the first part of August, so I'm pretty happy about that.  My investment company added an FDIC insured account for parking cash as an option to their traditional money market account.  With the interest on the FDIC account being .5% compared to .01% for the money market account, I've moved my cash to the insured account to pick up some additional interest. 

While the stock market is not doing so well, I've been racking up bargains right and left with couponing.  Picked up $97 worth of merchandise at Walgreens Sunday for just $24 and saved another 67% on my weekly grocery shopping at Gerbes.  The only problem I'm having is finding anything I actually need.  I've built up such a stockpile of groceries, household and personal care items that my shopping lists are getting smaller and smaller.  The good thing about that is I'm able to wait for the very best deals.  Which means that my average savings are going up with each trip to the store.  When I started couponing, I was averaging a 20-25% savings each trip.  Now I routinely save 50-75% on my purchases, allowing me to keep more of my hard earned money.