It was a rough start to the work week for me, half our opening staff called in, so I was overloaded with work all morning. Had to take a nitro tablet to get rid of chest pains, so I decided it was best not to work an extended shift. It's really hard to read my employers' response to my health problems since the heart attack. On the one hand, if I just do my job, I work circles around most of the other workers, but on the other hand I'm not quite as capable of doing all the extra work I used to do. So I'm never really sure where I stand with them, even though they are currently short on help and my medical problems hasn't cost them anything, since I'm not covered under their insurance program. I sometimes get the feeling they would just as soon be rid of me all the same. You'd think my boss would be a little more sensitive given that her husband suffered a heart attack around the same time I did. But who knows???
Anyway, the stock market ended its' 5 day rally, closing down today. So maybe I'll still have a chance to pick up some bargains over the summer. Just have to wait and see what happens with the jobs report later this week. If the numbers are good I'd expect to see more upward movement in the market.
I read an article yesterday about a money management company who moved their clients out of stocks entirely, thinking that the efforts to forestall default in Greece is simply a stall tactic. While cash isn't a bad thing, I'm not so sure I'd expect the bond market to perform much better than stocks for the remainder of the year. With interest rates so low and governments scrambling to come up with the money to pay their debts, I'm thinking it's just as iffy a proposition either way. I'd prefer to stick to dividend stocks myself. Still no guarantees there, but I'd choose a well managed corporation paying out dividends to government bonds any day. I figure anything politicians have their hand in is not a very safe place for your money.
Showing posts with label bargain stocks. Show all posts
Showing posts with label bargain stocks. Show all posts
Tuesday, July 5, 2011
Tuesday, May 31, 2011
IN MAY GO AWAY???
There is an old saying in the investment world, "In May, go away," meaning cut back on stock investing in the month of May and look towards the fall for things to pick up. While that may seem, at first blush, to be good advice, since historically the stock market tends to under perform from May through October, to me it seems a bit counter intuitive. If you know ahead of time the stock market tends to lag during 5 months of the year, in this case June through October, wouldn't that be just the time to make or add to your long term investments? While you may not make any quick gains from price movements, in the long run you should do well. At least that's my theory. I've been taking advantage of the summer months, to add to my long term dividend stocks, for quite a few years now and it has always worked out well for me.
There have been years when this strategy was ineffective, since on occasion the market has continued to rise after the month of May all the way through October, so it's not a fool proof plan. At the same time, when the market does lag, you still have to do your research and buy quality stocks if you hope to benefit when things pick up in the fall/winter season. Either way, if you're buying stocks at a price your comfortable with, you should come out O.K. in the end. So rather than follow the "in May, go away" train of thought, this is when I start looking for bargains in the stock market. With a little luck and a lot of research, sometimes you find some big winners! (Post #350)
There have been years when this strategy was ineffective, since on occasion the market has continued to rise after the month of May all the way through October, so it's not a fool proof plan. At the same time, when the market does lag, you still have to do your research and buy quality stocks if you hope to benefit when things pick up in the fall/winter season. Either way, if you're buying stocks at a price your comfortable with, you should come out O.K. in the end. So rather than follow the "in May, go away" train of thought, this is when I start looking for bargains in the stock market. With a little luck and a lot of research, sometimes you find some big winners! (Post #350)
Wednesday, March 16, 2011
UNREST IN THE MIDDLE EAST, DISASTER IN JAPAN, STOCK PLUNGE
One of the guys I work with is convinced the world is coming to an end. With political upheaval in the middle east, earthquake and tsunami disasters in Japan, he's saying it's just what the Bible predicted for the end of times. Whether it is the end of the world is not really for us to decide. My bet would lean toward the world still be around for a few more years, don't really put much stock in the whole 2012 thing.
One thing I am sure of, the latest plunge in the stock market related to all the bad news from Japan and the middle east, is sure to bring about some great stock buying opportunities. I've been building my cash reserves to take advantage of summer pullbacks in the market, but with everything that's going on right now, I may be on another buying binge sooner than I thought. Have to get a little better idea of where things are headed first. Most recently I've put in an order to purchase Merck (MRK:NYSE) for my taxable portfolio and Kraft (KFT:NYSE) for my IRA account.
One thing I am sure of, the latest plunge in the stock market related to all the bad news from Japan and the middle east, is sure to bring about some great stock buying opportunities. I've been building my cash reserves to take advantage of summer pullbacks in the market, but with everything that's going on right now, I may be on another buying binge sooner than I thought. Have to get a little better idea of where things are headed first. Most recently I've put in an order to purchase Merck (MRK:NYSE) for my taxable portfolio and Kraft (KFT:NYSE) for my IRA account.
Saturday, February 12, 2011
MORE GOOD NEWS FOR MY STOCKS
Wednesday, February 2, 2011
I SURVIVED THE BLIZZARD OF 2011
Tuesday's rally in the stock market was good to see, but I'll be looking to pick up shares during dips in the market. While I'm in the rebuilding stage of my portfolio, I'll be concentrating on increasing stakes in quality stocks and avoid more speculative issues. Will most likely add more to AT&T, Philip Morris and my drug stocks like Bristol Myers and Merck.
For February I'll be concentrating on my tax returns for 2010. I should get a small refund, which I plan on putting to work in a good dividend paying stock. Want to build cash flow as rapidly as possible to help cover any future medical costs related to follow visits with my cardiologist.
My new computer equipment is great!!! Glad I went with used equipment. It's super fast and I got a great deal buying off of Ebay. My computer and monitor cost a grand total of $208, much less expensive than new and it's way more than adequate for my current needs. I'm sure I'll more than get my moneys worth by the time I need to upgrade again.
Still loving the ipod touch! Now I understand why Apple has done so well, although I'll probably never own shares directly. They have some great products and the quality can't be beat. I'll definitely consider purchasing an ipad when my laptop finally craps out.
Wednesday, July 21, 2010
THE SMALL INVESTOR BY JIM GARD
I've been reading a great book for people who are new to investing. It's not a new book, but it does a great job of covering all the basics of investing in stocks, bonds and mutual funds. It is very well written and easy for anyone to understand. The book is titled, "The Small Investor" and is written by author Jim Gard. I'm reading the second edition which I picked up at a used book store, but I'm sure it's still available through Amazon or Barnes and Noble.
Along with covering all the basics of investing, the book also explains why the small investor actually has an advantage in some ways in the marketplace. It tells you how to work with professionals such as investment counselors, brokers, money managers, and others whose services you may or may not need. It's not a get rich quick scheme, but it can help you make a personal plan that gives you your best shot at a reliable return on your investments, with manageable risks.
I highly recommend the book for beginning investors.
Along with covering all the basics of investing, the book also explains why the small investor actually has an advantage in some ways in the marketplace. It tells you how to work with professionals such as investment counselors, brokers, money managers, and others whose services you may or may not need. It's not a get rich quick scheme, but it can help you make a personal plan that gives you your best shot at a reliable return on your investments, with manageable risks.
I highly recommend the book for beginning investors.
Saturday, July 3, 2010
HAPPY INDEPENDENCE DAY!
Wanted to wish everyone a happy Independence Day! In keeping with the theme, part of my celebration included placing an order to purchase more share of General Mills (GIS). While celebrating America's Independence I'm also working toward my goal of financial independence. Stocks are down, but far from out, so I figure now is a good time to pick up additional shares in some quality corporations.
Friday, May 14, 2010
AS STOCK PRICES FALL, THE YIELD ALSO RISES
As much as I hate to see the balances in my investment accounts drop when stock prices decline, I always try to keep in mind that yields on dividend paying stocks go up as their prices fall. Some say this is only a temporary slow down and the market will take off again soon, while others are predicting another 50% drop in stocks. Either way, it could present level headed dividend investors with great opportunities to pick up bargain priced shares and increase their overall dividend yields.
Say for example you have a $20 stock paying a dividend of $1 per year, that works out to a 5% return on your investment. Not bad really, but if that stock drops in price by 50%, or to $10 per share and still maintains the same $1 dividend, then the dividend yield jumps to 10%! This actually happened to one of my stocks during the last downturn and I was quick to take advantage of the lower stock price to double the number of shares I owned. The greatest thing about that is, now that the share price has returned to near it's former high, I'm still earning a 10% return on the shares I purchased at the lower price, not to mention a sizable unrealized capital gain.
This time around I'm in a lot better position to take advantage of another downturn than I was in 2007 and 2008. While my income is lower, I do have a job with a steady income. My personal debt is nearly all paid off and I've managed to build up a cash surplus. So when opportunities present themselves, I'll be able to move quickly a pick up some terrific deals on solid dividend stocks for both my investment accounts.
For my most recent moves, I'm adding RAI to my regular stock account and JNJ to my IRA account. Reynolds American Inc (RAI) carries a dividend of $3.60 per share which represents a yield of 6.74% on their closing share price of $53.40. Johnson & Johnson (JNJ) currently pays a dividend of $2.16 per share, for a yield of 3.38%. Both companies have more than sufficient earnings to maintain their current dividend payouts and should make great additions to my investment accounts going forward. I'll definitely be looking to add additional shares of both stocks should their share prices drop with the rest of the stock market.
Say for example you have a $20 stock paying a dividend of $1 per year, that works out to a 5% return on your investment. Not bad really, but if that stock drops in price by 50%, or to $10 per share and still maintains the same $1 dividend, then the dividend yield jumps to 10%! This actually happened to one of my stocks during the last downturn and I was quick to take advantage of the lower stock price to double the number of shares I owned. The greatest thing about that is, now that the share price has returned to near it's former high, I'm still earning a 10% return on the shares I purchased at the lower price, not to mention a sizable unrealized capital gain.
This time around I'm in a lot better position to take advantage of another downturn than I was in 2007 and 2008. While my income is lower, I do have a job with a steady income. My personal debt is nearly all paid off and I've managed to build up a cash surplus. So when opportunities present themselves, I'll be able to move quickly a pick up some terrific deals on solid dividend stocks for both my investment accounts.
For my most recent moves, I'm adding RAI to my regular stock account and JNJ to my IRA account. Reynolds American Inc (RAI) carries a dividend of $3.60 per share which represents a yield of 6.74% on their closing share price of $53.40. Johnson & Johnson (JNJ) currently pays a dividend of $2.16 per share, for a yield of 3.38%. Both companies have more than sufficient earnings to maintain their current dividend payouts and should make great additions to my investment accounts going forward. I'll definitely be looking to add additional shares of both stocks should their share prices drop with the rest of the stock market.
Wednesday, March 17, 2010
QUANTUM LEAP INVESTING
When I did my taxes this year, I came across something that I hadn't noticed before. I knew the value of my investments had increased dramatically, but given the fact that I was busy looking for work and preoccupied with trying to get by on unemployment, I really didn't give it too much thought. While preparing my taxes I noticed something that made me realize how truly amazing the past year was, when it came to my investments.
When I went through my records and figured my total stock sales for last year, I was amazed to find, the amount I sold, was almost twice the value of my total portfolio at its lowest point last year. What I found even more amazing is, the current value of my investments is 203% greater than the lowest value during the recession and is more than 50% above the highest balance I'd ever held in my accounts. All of this occurred during a year when the country was faced with the worst economic downturn in decades and at a time when I experienced some of the harshest financial setbacks of my entire life.
So I found myself asking how this could have happened, when I knew that I hadn't invested much in additional funds. Of course I know about the changes I made in my investments and I did make small monthly deposits to my IRA. I guess I just never realized at the time, how effective those changes were. It reminded me of something I read in one of my investment books. The author of the book had a theory that people who actively manage their cash flow, and invest in income producing investments, sometimes benefit from sudden quantum leaps in their level of wealth. I'm not sure what his idea of a quantum leap in wealth is, but to my way of thinking, anytime your total investments increase 203% in a little over a year that's quite a jump!
While I think it's doubtful that I'll see such an increase again anytime soon, I do think it's worthwhile for me to go back and take a closer look at what I did during the past year. After all, if there is such a thing as quantum leap investing, then I'd like to know how to repeat the process if at all possible.
230
When I went through my records and figured my total stock sales for last year, I was amazed to find, the amount I sold, was almost twice the value of my total portfolio at its lowest point last year. What I found even more amazing is, the current value of my investments is 203% greater than the lowest value during the recession and is more than 50% above the highest balance I'd ever held in my accounts. All of this occurred during a year when the country was faced with the worst economic downturn in decades and at a time when I experienced some of the harshest financial setbacks of my entire life.
So I found myself asking how this could have happened, when I knew that I hadn't invested much in additional funds. Of course I know about the changes I made in my investments and I did make small monthly deposits to my IRA. I guess I just never realized at the time, how effective those changes were. It reminded me of something I read in one of my investment books. The author of the book had a theory that people who actively manage their cash flow, and invest in income producing investments, sometimes benefit from sudden quantum leaps in their level of wealth. I'm not sure what his idea of a quantum leap in wealth is, but to my way of thinking, anytime your total investments increase 203% in a little over a year that's quite a jump!
While I think it's doubtful that I'll see such an increase again anytime soon, I do think it's worthwhile for me to go back and take a closer look at what I did during the past year. After all, if there is such a thing as quantum leap investing, then I'd like to know how to repeat the process if at all possible.
230
Sunday, January 24, 2010
RIDE OUT STOCK MARKETS UPS AND DOWNS ON A WAVE OF DIVIDENDS!
Last week's lackluster performance of the overall stock market convinced me more than ever of the wisdom of investing for dividend income, rather than potential capital gains. I've been investing for quite a few years now and I've had my share of terrific gains, buying low and selling high. But when I decided to redirect my investments towards only dividend paying stocks, I've seen a steady increase in my investment income.
When the market took such a tremendous dive in 2008 and early 2009, I was as concerned as anyone else. However, when I realized that the dividend income was only minimally affected by the drop in stock prices, the whole situation came into perspective. What I also realized was that I had been presented with a wonderful opportunity to increase my holdings at greatly reduced prices, which is exactly what I did. At one point during the recession, the value of my total holdings was down nearly 50%. During that time I added to my investments as much as my budget would allow. Now my stock portfolio and IRA have recovered dramatically and since I bought more during the worst of the recession, my personal stock portfolio is worth more than it ever has been.
The real thing to keep in mind here, when you're investing for dividends the ups and downs of the market become almost irrelevant. As a bonus of this type of investment strategy, companies who have a long history of rewarding shareholders through steady dividend payments also tend to do well as far as gains in stock price. Who says you can't have your cake and eat it too.
When the market took such a tremendous dive in 2008 and early 2009, I was as concerned as anyone else. However, when I realized that the dividend income was only minimally affected by the drop in stock prices, the whole situation came into perspective. What I also realized was that I had been presented with a wonderful opportunity to increase my holdings at greatly reduced prices, which is exactly what I did. At one point during the recession, the value of my total holdings was down nearly 50%. During that time I added to my investments as much as my budget would allow. Now my stock portfolio and IRA have recovered dramatically and since I bought more during the worst of the recession, my personal stock portfolio is worth more than it ever has been.
The real thing to keep in mind here, when you're investing for dividends the ups and downs of the market become almost irrelevant. As a bonus of this type of investment strategy, companies who have a long history of rewarding shareholders through steady dividend payments also tend to do well as far as gains in stock price. Who says you can't have your cake and eat it too.
Sunday, September 27, 2009
Time To Get Back Into Shipping Stocks?
I've been a big fan of shipping stocks in the past because of their high dividend payouts. However, I sold off some shares during the downturn in the economy and have not added to any of my current positions in quite some time. My current holdings include Euroseas LTD (ESEA) and General Maritime Corp. (GMR), with dividend yields of 9.30% and 25.10% respectively. While current earnings do not support such high payouts, world trade appears to be picking up, so shipping should gain ground along with improvements in trade.
According to the statistics issued by the Bureau for Economic Policy, research showed the volume of world trade rising 3.5% in July after a revised increase of 1.6% in June. Decrease in the world trade was caused by the decrease in demand; but, the increasing trade ties among countries can play an important role in stabilizing the world economy. The rise in volumes was the steepest since December 2003.
With share prices of shipping companies being so cheap and trade volumes on the rise, is now the time to buy into shipping? I tend to think so. While some companies may be forced to lower dividend payments, their future prospects look quite good. Given the fact that their stock prices are at extreme lows, now might be the perfect time to make a long term investment.
With this in mind, I intend to either add to my current positions in ESEA and GMR or purchase shares in another company whose financials are a little better positioned. I'll have to do more research before I make a final decision.
According to the statistics issued by the Bureau for Economic Policy, research showed the volume of world trade rising 3.5% in July after a revised increase of 1.6% in June. Decrease in the world trade was caused by the decrease in demand; but, the increasing trade ties among countries can play an important role in stabilizing the world economy. The rise in volumes was the steepest since December 2003.
With share prices of shipping companies being so cheap and trade volumes on the rise, is now the time to buy into shipping? I tend to think so. While some companies may be forced to lower dividend payments, their future prospects look quite good. Given the fact that their stock prices are at extreme lows, now might be the perfect time to make a long term investment.
With this in mind, I intend to either add to my current positions in ESEA and GMR or purchase shares in another company whose financials are a little better positioned. I'll have to do more research before I make a final decision.
Friday, September 25, 2009
Week In Review
At this point, it looks like both my stock portfolios will end down for the week. Although I'm still up quite a bit for the year on my IRA, I haven't quite regained all I lost on my taxable stock portfolio. Even though the total dollar value is 40% higher than last year, the increased value represents profits from stock trades since the first of this year, and extra cash added to my stock account.
The biggest change I've made in the past 30 days would be to add a shares of a Canadian Energy trust and a Real Estate investment trust, both of which pay dividends on a monthly instead of quarterly basis. Both appear to be solid companies and I think they'll work well towards reaching my goal of boosting monthly cash flows from dividends. I've noticed a lot of getting ahead in investing is all about cash flow. How quickly you turn over your money. When you pay out your cash to purchase shares of an investment, the quicker you get your money back, the better. That's why I love dividend stocks, because as long as the company is solid, you can look forward to a steady stream of dividend income for years and years to come. I could be perfectly satisfied with holding my stocks till the day I die, as long as the dividends keep rolling in.
Looking ahead, for the next couple of months, I'll be adding to my AT&T and BP stakes in my IRA account and will probably purchase more shares of PGH for my taxable portfolio. Nothing new on the job front, but I have been getting more responses to applications, so that's encouraging. Still working on eliminating my remaining credit card debt. Because of increased interest rates, I have canceled all but 2 of my credit cards and don't intend to take out any new ones. I think the credit card companies have all lost their minds recently and until I see some better offers, I'm avoiding using them all together.
I'm beginning to believe things are picking up with the economy, more in spite of, rather than because of recent government efforts. In the end, I believe legislation passed since the first of this year will ultimately lead to higher taxes than we've ever seen and create a tremendous drag on the economy. Just have to wait and see how it all plays out.
The biggest change I've made in the past 30 days would be to add a shares of a Canadian Energy trust and a Real Estate investment trust, both of which pay dividends on a monthly instead of quarterly basis. Both appear to be solid companies and I think they'll work well towards reaching my goal of boosting monthly cash flows from dividends. I've noticed a lot of getting ahead in investing is all about cash flow. How quickly you turn over your money. When you pay out your cash to purchase shares of an investment, the quicker you get your money back, the better. That's why I love dividend stocks, because as long as the company is solid, you can look forward to a steady stream of dividend income for years and years to come. I could be perfectly satisfied with holding my stocks till the day I die, as long as the dividends keep rolling in.
Looking ahead, for the next couple of months, I'll be adding to my AT&T and BP stakes in my IRA account and will probably purchase more shares of PGH for my taxable portfolio. Nothing new on the job front, but I have been getting more responses to applications, so that's encouraging. Still working on eliminating my remaining credit card debt. Because of increased interest rates, I have canceled all but 2 of my credit cards and don't intend to take out any new ones. I think the credit card companies have all lost their minds recently and until I see some better offers, I'm avoiding using them all together.
I'm beginning to believe things are picking up with the economy, more in spite of, rather than because of recent government efforts. In the end, I believe legislation passed since the first of this year will ultimately lead to higher taxes than we've ever seen and create a tremendous drag on the economy. Just have to wait and see how it all plays out.
Friday, July 10, 2009
Merck and Schering Plough Merger
It has been an uneventful week in the stock market. Although I'm pretty pleased with the merger agreement going forward with Merck and Schering Plough. I own shares in both companies and stand to get some cash, $10.50 per share plus .5767 shares of the New Merck for each share of Schering Plough I own. I like the mergers where I get cash, cash is almost always good. Since I bought both stocks when prices were low, I should come out ahead on the deal. Plus the new company anticipates continuing Merck's current dividend payout. So that's the bright spot for the week.
Made some changes to the appearance of my blog, trying to encourage more visitors, I think it's a big improvement. Be the first to sign up as a follower of my blog!!!
News affecting the economy was not particularly good this week. Obama's approval rating is slipping over bailout programs and lack of results. Warren Buffett thinks we need another stimulus package, although I'm a huge fan, I disagree with him on that one. And the jobless rate continues to rise. While it all seems a little overwhelming at times, we just have to keep in mind it won't last forever. Things will eventually gravitate back towards the norm.
Made some changes to the appearance of my blog, trying to encourage more visitors, I think it's a big improvement. Be the first to sign up as a follower of my blog!!!
News affecting the economy was not particularly good this week. Obama's approval rating is slipping over bailout programs and lack of results. Warren Buffett thinks we need another stimulus package, although I'm a huge fan, I disagree with him on that one. And the jobless rate continues to rise. While it all seems a little overwhelming at times, we just have to keep in mind it won't last forever. Things will eventually gravitate back towards the norm.
Monday, June 8, 2009
Stock Market Takes a Break
Stocks opened lower today and are expected to level off for the next 1 or 2 months. Bob Parker of Credit Suisse says to look for the bull market to return by August. (See his comment and link to video interview at:
http://www.cnbc.com/id/31168544
Frankly I'm kind of glad for a break in the run we've been having. Gives me time to pick up more stock at bargain prices. I've taken some profits lately and am looking to position myself for the next leg of the bull market. Technically we are still in a bear market, but there are always bullish periods within bear markets. Since the economy is not expected to fully recover from recession until the final half of 2010, it's likely that there will be volatility and a continued bear market until then. Gives forward thinkers plenty of time to position themselves for a true bull market at the end of 2010 or beginning of 2011. In the mean time, why not take advantage of the current market by buying on the dips and selling on the highs.
http://www.cnbc.com/id/31168544
Frankly I'm kind of glad for a break in the run we've been having. Gives me time to pick up more stock at bargain prices. I've taken some profits lately and am looking to position myself for the next leg of the bull market. Technically we are still in a bear market, but there are always bullish periods within bear markets. Since the economy is not expected to fully recover from recession until the final half of 2010, it's likely that there will be volatility and a continued bear market until then. Gives forward thinkers plenty of time to position themselves for a true bull market at the end of 2010 or beginning of 2011. In the mean time, why not take advantage of the current market by buying on the dips and selling on the highs.
Sunday, June 7, 2009
Payday Loans
It has always been my policy to stay away from payday loans. Until recently, even a cash advance on one of my credit cards would have been preferable to borrowing money from cash advance, title loan or payday loan companies. That being said, if a person has no other recourse and they are absolutely sure they can pay the money back, as agreed, then I could see using them, but only as a last resort.
Needless to say, not everyone agrees with me. Which really has worked out good for me in the sense that I've been able to make some tidy profits trading their company stocks. My most recent trade (AEA) netted me a near 100% gain in just a few short months. I've recently purchased more shares of AEA (Advance America Cash Advance Centers) on a pull back in price. Even if I don't make a quick gain like last time, they are paying an attractive dividend and from their earnings, it looks to be sustainable. So either way, short trade or long term investment, it should work out pretty well.
As a rule though, I would still advocate avoiding payday loans if at all possible.
Needless to say, not everyone agrees with me. Which really has worked out good for me in the sense that I've been able to make some tidy profits trading their company stocks. My most recent trade (AEA) netted me a near 100% gain in just a few short months. I've recently purchased more shares of AEA (Advance America Cash Advance Centers) on a pull back in price. Even if I don't make a quick gain like last time, they are paying an attractive dividend and from their earnings, it looks to be sustainable. So either way, short trade or long term investment, it should work out pretty well.
As a rule though, I would still advocate avoiding payday loans if at all possible.
Thursday, May 28, 2009
Stock Portfolio Update
With such a crazy market since the first of the year, it's easy to just sit on the sidelines and wait for more stability. Always the bull, when it comes to the stock market, I can't help but see opportunity everywhere! My IRA account, which I opened in December, is up 14.5% for the year. AFLAC (AFL) was my best purchase for this account, up an astonishing 67% since my original purchase. I think it will go even higher. Advance America Cash Advance (AEA) earned me a whopping 97% gain for my regular investment account.
So even though it's been a rough ride for the first five months of the year, as far as I'm concerned, it has presented us with a very rare opportunity to make some marvelous short term trades and fantastic long term investments.
I don't want anyone to get the idea that my life has been smooth sailing through this economy. My job shut down on January 10th and I'm still looking for work. I've had to cut back on the amount of money set aside for investing and I've practically stopped buying anything aside from the basic necessities. But I've been through much worse and this too will pass.
So even though it's been a rough ride for the first five months of the year, as far as I'm concerned, it has presented us with a very rare opportunity to make some marvelous short term trades and fantastic long term investments.
I don't want anyone to get the idea that my life has been smooth sailing through this economy. My job shut down on January 10th and I'm still looking for work. I've had to cut back on the amount of money set aside for investing and I've practically stopped buying anything aside from the basic necessities. But I've been through much worse and this too will pass.
Thursday, October 16, 2008
Buying Stock For the Dividends
As anyone who has read my previous posts can attest, I've always promoted buying stocks based on dividend payouts and the companies' ability to continue paying the dividends. It is interesting to note that the "experts" are starting to give this same advice. Check out this article on CNBC:
Cramer: Buy Dividends on This Dow Drop
http://www.cnbc.com/id/27205368
While Cramer makes some good points about dividends being a cushion in the market downturn and yields rising as prices fall, I have always advocated buying investments that provide current income, i.e. dividends, as well as having strong possibility of future capital gains. All of the stocks recommended in Cramer's article are good stocks, but with a little effort it's possible to find much better yields than mentioned here.
Cramer: Buy Dividends on This Dow Drop
http://www.cnbc.com/id/27205368
While Cramer makes some good points about dividends being a cushion in the market downturn and yields rising as prices fall, I have always advocated buying investments that provide current income, i.e. dividends, as well as having strong possibility of future capital gains. All of the stocks recommended in Cramer's article are good stocks, but with a little effort it's possible to find much better yields than mentioned here.
Crisis Or Opportunity of A Lifetime?
With all the negative news on the economy, the stock market crash and the chaotic actions of our national leaders, one has to wonder when or if this "crisis" will ever end. I may be viewed as the perennial bull for saying this, but what I see right now is the opportunity of a lifetime! Stock prices have plunged, everybody is bailing out and parking their money in low interest cash accounts. I think now is the time to make the real money in the stock market. We may or may not be at the bottom of the market cycle, but I haven't seen such bargains in the stock market in years!
My personal stock account has suffered along with everyone else's, however, instead of panic selling, I've been on a personal buying spree. My biggest fear at this point is that the "crisis" will end before I'm able to accumulate all of the shares I'd like to own. You might think I'm crazy for taking this point of view, but just look at what is really going on. Warren Buffett, undeniably one of the most brilliant investors of all time, is investing billions of dollars. Is he trying to prop up the U.S. stock market single handed? I doubt it. I think he recognises the situation as an opportunity for building his tremendous wealth even further. Gas and oil prices are plummeting, leaving more discretionary income in the hands of consumers. What do consumers usually do when they have more discretionary income? They spend it on goods and services. When they spend, business begin to grow earnings, which in turn leads to more jobs and a healthier economy. This may sound a little simplistic, but that is the way a market economy operates. How soon will all these things come about? Your guess is as good as mine, but I don't think it will take as long as all the experts seem to think.
I'm not a believer in bailouts, I think they are mostly a political ploy and will only lead to job destroying higher taxes. But I am a firm believer in the power of the free market economy to overcome tremendous adversity. I can't help but think that a few years down the road a lot of people are going to be saying, "We had nothing to fear but fear itself."
My personal stock account has suffered along with everyone else's, however, instead of panic selling, I've been on a personal buying spree. My biggest fear at this point is that the "crisis" will end before I'm able to accumulate all of the shares I'd like to own. You might think I'm crazy for taking this point of view, but just look at what is really going on. Warren Buffett, undeniably one of the most brilliant investors of all time, is investing billions of dollars. Is he trying to prop up the U.S. stock market single handed? I doubt it. I think he recognises the situation as an opportunity for building his tremendous wealth even further. Gas and oil prices are plummeting, leaving more discretionary income in the hands of consumers. What do consumers usually do when they have more discretionary income? They spend it on goods and services. When they spend, business begin to grow earnings, which in turn leads to more jobs and a healthier economy. This may sound a little simplistic, but that is the way a market economy operates. How soon will all these things come about? Your guess is as good as mine, but I don't think it will take as long as all the experts seem to think.
I'm not a believer in bailouts, I think they are mostly a political ploy and will only lead to job destroying higher taxes. But I am a firm believer in the power of the free market economy to overcome tremendous adversity. I can't help but think that a few years down the road a lot of people are going to be saying, "We had nothing to fear but fear itself."
Wednesday, July 23, 2008
Don't Take My Word For It
O.K., so I've been writing since January about how this is the perfect time to get in to the stock market, albeit on a very selective basis. I always search for investments that provide current cash flow and the possibility of future capital gains. For anyone who thought that I couldn't possibly know what I was talking about, check out this article from the Rich Dad Blog by Robert Kyosaki:
When Pessimism Prevails, It's Time to Get Rich
If you go back and read some of my articles for this past year, you'll see that I've been saying basically the same thing Mr. Kyosaki is talking about in this article. I've read most of his books and he is by far my favorite author when it comes to investing, so I was pleased to see that his most recent post is validating a lot of the things I've been writing about. So, don't take my word for it, read what someone who's already made millions has to say.
When Pessimism Prevails, It's Time to Get Rich
If you go back and read some of my articles for this past year, you'll see that I've been saying basically the same thing Mr. Kyosaki is talking about in this article. I've read most of his books and he is by far my favorite author when it comes to investing, so I was pleased to see that his most recent post is validating a lot of the things I've been writing about. So, don't take my word for it, read what someone who's already made millions has to say.
Monday, May 26, 2008
Summer Cost Cutters For My Investments
For traders in the stock market, summer is usually a time for laying low. "In May, go away" as the saying goes. For my personal investments it is usually a time to re-evaluate my plan and assess changes that will improve my portfolio performance. I also think of it as a good time to pick up stock in some of the big blue chip companies while prices are down. As an example, I sold my AT&T stock in early spring of last year, while I had a nice price gain and bought the company's stock back in late summer when the prices were down. From the profit I made in the spring, I was able to purchase more shares of this great company when I bought back in at the lower prices. It has performed quite well since.
As for improving performance of my portfolio, this year I have decided to increase the dollar amount of each of my investments and purchase larger blocks of stock each time. While I'm building up cash for stock purchases, the money is parked in my money market account where it earns a nice interest rate. By increasing the size of my investments each time, I will save on brokerage fees. I don't think anyone would consider the amount I pay in brokerage fees to be extreme, but every dollar you save is like earning two, since the saved dollar has already had the taxes taken out. So I'm looking to save every way I can on investment related costs.
The biggest threat to my portfolio this year is high gasoline prices. Not only does this have a negative affect on the economy overall and on the cost of doing business for a lot of the companies I invest in, it drastically reduces the amount of discretionary income I am able to devote to my investment plan. I believe we will see a break in gasoline prices soon. I just don't think it's possible for the average working person in the U.S. to continue paying ever increasing gasoline prices. People have already started to make drastic changes, replacing larger vehicles with smaller ones, riding bikes to work or taking public transportation, in many cases they never would have considered these things before. As for me, I simply don't drive any more than I absolutely have to. All these things add up and when the demand falls, so will gasoline prices. My plan B, you should always have a plan B, is to change jobs and reduce my commute or to relocate closer to my work place. For now I'm cutting back and waiting for a price break. I would much rather be putting this money towards building investment income rather than burning it up in my car.
As for improving performance of my portfolio, this year I have decided to increase the dollar amount of each of my investments and purchase larger blocks of stock each time. While I'm building up cash for stock purchases, the money is parked in my money market account where it earns a nice interest rate. By increasing the size of my investments each time, I will save on brokerage fees. I don't think anyone would consider the amount I pay in brokerage fees to be extreme, but every dollar you save is like earning two, since the saved dollar has already had the taxes taken out. So I'm looking to save every way I can on investment related costs.
The biggest threat to my portfolio this year is high gasoline prices. Not only does this have a negative affect on the economy overall and on the cost of doing business for a lot of the companies I invest in, it drastically reduces the amount of discretionary income I am able to devote to my investment plan. I believe we will see a break in gasoline prices soon. I just don't think it's possible for the average working person in the U.S. to continue paying ever increasing gasoline prices. People have already started to make drastic changes, replacing larger vehicles with smaller ones, riding bikes to work or taking public transportation, in many cases they never would have considered these things before. As for me, I simply don't drive any more than I absolutely have to. All these things add up and when the demand falls, so will gasoline prices. My plan B, you should always have a plan B, is to change jobs and reduce my commute or to relocate closer to my work place. For now I'm cutting back and waiting for a price break. I would much rather be putting this money towards building investment income rather than burning it up in my car.
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