LATEST ADDITIONS TO MY IRA ACCOUNT

Finalized my purchases of AWF and ERF for my IRA account today.  Locked in an 8.11% dividend yield on AWF which should start paying monthly dividends to my account in May.  With the small price drop since my last post, was able to get a final dividend yield of 10.97% on my shares of ERF.  The completion of these purchases add a total of 16 payments a year to my "dividend a day" plan. 

Since AWF is a high yield global bond fund, it also means I'll be investing in bonds for the first time.  While I'm a firm believer that stocks outperform bonds over the long haul, I figure at my age it doesn't hurt to have some exposure to bonds and a small amount invested in a fund like AWF has little change of adversely affecting my portfolio in any way.  I definitely like their monthly payments :0). 

LATEST ADDITIONS TO MY PORTFOLIO

Added shares of telecom Windstream Corporation (WIN:NASDAQ) to my taxable stock account.  It's been a great performer for my portfolio and I like the dividend (currently 8.06% on their recent share price of $12.39).  Windstream is one of my long term holdings. 

For my IRA account I purchased shares of Credit Suisse Group (CS:NYSE).  They currently pay a dividend of $1.78 which represents a yield of 3.84% on their recent share price of $46.66.  While it's not the highest yield, I think they have good prospects for increasing dividends in years to come.  CS is one of my long term holdings for my IRA account. 

I'm happy with the way the markets have been moving of late, although I'm not too optimistic that the upward trend will continue.  I'm thinking a lot hinges on the direction of the November elections.  Should the Democrats retain control of both houses, which seems unlikely, I'd expect a prolonged drop in equities.  If the GOP manages to rest control of both the House and the Senate, I expect the stock market to react quite favorably, at least through the first part of 2011.  Aside from the above scenarios, the only real market mover that I foresee would be a dramatic increase in new jobs, which I believe is highly unlikely.  Should the jobs situation get worse, it would present another tremendous buying opportunity when equities bottom out.  At least for those who still have money and the courage to invest in stocks.

ANOTHER CHECK FROM SENDEARNINGS!!!

Just earned another check from SendEarnings (see banner ad this page).  What a great deal!  This check is for $42 and some change.  Not a lot, but I'll be transferring it from the bank to my money market account and will use it to purchase a few shares of dividend paying stock.  Keep the money moving and growing :0)

Also been doing some carpet cleaning jobs on the side with my new carpet machine.  I've earned enough to reimburse me for 1/6th of the purchase price of the machine.  In addition I have three other carpet jobs lined up, whenever I get time to do them.  At this rate it won't take long to earn back the entire purchase price and I can start using the money to retire what little debt I have left and build my investment account even more.

Speaking of investments, I'm looking at the current downturn in the market as a buying opportunity.  Looking to add additional shares to some of my quality stock holdings.  Have reduced investment costs to my IRA by changing my investment schedule from monthly to quarterly.  Instead of paying a commission each month, I'm only paying 4 times per year, reducing my commission expenses from $48 to $16.  Would rather have the money go towards purchasing more shares than fattening the brokers.

MAKING MONEY AS THE MARKET TUMBLES

Contrary to what we saw last year, it looks as though most investors are following the old adage, "In May, go away." With market experts predicting a 15% to 20% correction, many are fleeing stocks in favor of cash. While I'm not selling and have no plans to sell anything anytime soon, I am letting my cash from dividends build up in my money market accounts. It does seem to help you keep your nerves to have some cash on hand when the market goes into free fall.

This is one of those times I like to be in the position to buy. When the market finishes its' tumble and begins to level off, I like to jump in and pick up shares of companies that I believe are normally out of my price range, but would otherwise love to own. You don't have to pick the exact bottom to make money, you just come in as near the bottom as possible. This puts you in a great position for capital gains as the market begins to recover. As a bonus, if you're a dividend investor, you get to earn cash while you wait for stock prices to go back up. This time around, I'll be looking to up my stakes in Johnson & Johnson, Clorox and Campbell's Soup Co.. I may come up with some additional stocks that I'd like to get in on, but for now I'll be concentrating on these three.

Since starting my new job, I've managed to cut my expenses to the bone and am finding it easy to set aside extra money for cash savings as well as continued investments in my regular stock portfolio and my IRA. It strikes me as really odd that I make so much less than I used to, but I'm saving as much or more. I guess when you finally get the hang of managing your cash flow, it's almost irrelevant how much you make. You always manage to pay yourself first and keep right on building wealth. It's taken me a lot of years to get to this point. Sure wish our school systems had provided financial education when I was growing up. Could have saved me a lot of time and a great deal of money.

STOCK MARKET DROP, DISASTER OR OPPORTUNITY?

We had a wild ride in the stock market last week, to say the least. While the U.S. government and others try to figure out exactly what caused the big plunge on Thursday, investors are left to wonder whether they should stick with stocks or sell, sell, sell. My personal investments ended the week down by 10%. While I don't like to see lower balances in my investment accounts, I do like to see lower stock prices on some of my favorite dividend stocks. So I'm looking for buying opportunities.

I've put in orders to buy more shares of AFLAC (AFL) and Astrazeneca (AZN) for my IRA account. Also put in an order to buy more shares of AZN for my regular investment account. I currently hold 27 different dividend paying stocks in my regular investment account and am looking to take that back up to 30. Haven't found any new stocks that I'm interested in yet, but when I do, I'll be sure to keep my readers informed.

Got a great dividend payout from CPL the Brazilian utility company! Will probably add to my stake in this great company. I've done very well with them since my initial investment. Also looking forward to the big payout this coming week from my holdings in energy limited partnerships. Haven't decided what to do with the money yet, so I'll leave it in my money market account for the time being.

Had dinner at my favorite Chinese restaurant the other night and my fortune cookie said, "You can look forward to many rich rewards in the coming year." I took it as a sign, I'm looking forward to a prosperous year ahead.

ASTRAZENECA P L C MY LATEST STOCK PURCHASE

Yesterday was a good day for the market and a good day for shopping for a new addition to my investment portfolios. I've decided to add shares of drug maker AstraZeneca P L C (AZN:NYSE) to my regular investment portfolio and as a long term holding in my IRA account. AZN has earnings per share of $5.19 with a dividend payout of $3.42, which represents a 7.80% return on their recent share price of $43.94. Their ROE is 35.10% and they have $5.38 per share in cash. They have great profit margins and an acceptable level of debt. As a dividend investment, I'm thinking I will do quite well with AZN.

AstraZeneca PLC is focused on the discover, development, manufacturing and marketing of prescription pharmaceuticals and biological products for important areas of healthcare: Cardiovascular, Gastrointestinal, Infection, Neuroscience, Oncology, and Respiratory and Inflammation. Its primary products include Arimidex for hormonal breast cancer, Crestor that provides treatment for managing cholesterol levels, Nexium for acid-related diseases, Seroquel an atypical anti-psychotic therapy for treating schizophrenia and bipolar mania and Symbicort for the treatment of asthma patients. The company is active in over 100 countries with a growing presence in important emerging markets including China, corporate office in London, UK and major R&D sites in Sweden, the UK and the U.S.. The company owns and operates numerous R&D, production and marketing facilities worldwide. It has over 25 manufacturing sites in over 15 countries. It operates a small number of sites for the manufacture of active ingredients in the UK, Sweden and France, complemented byefficient use of outsourcing.

BRISTOL-MYERS SQUIBB CO.

With the market down, I decided to pick up some shares of BMY for my regular investment portfolio and my IRA. Bristol-Myers has a dividend payout of 5.30% and cash per share of $3.21. Their return on equity is 26.50% with a profit margin of 63.10%. Their earnings per share of $1.63 along with available cash makes the dividend payout of $1.28 per share seem secure. I think BMY will be a great addition to my dividend and retirement portfolio.

Bristol-Myers Squibb Company was incorporated under the laws of the State of Delaware in August 1933 under the name Bristol-Myers Company, as successor to a New York business started in 1887. In 1989, Bristol-Myers Company changed its name to Bristol-Myers Squibb Company as a result of a merger. It is a global biopharmaceutical and related health care products company whose mission is to extend and enhance human life by providing the highest quality pharmaceutical and related health care products. The Company, through its divisions and subsidiaries, is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of pharmaceutical and nutritional products. The Company reports financial and operating information in two segments, Pharmaceuticals and Nutritionals. The Nutritionals segment is operated through the Company's subsidiary Mead Johnson Nutrition Company. The Nutritionals segment, through Mead Johnson, manufactures, markets, distributes and sells infant formulas and other nutritional products, including the entire line of ENFAMIL products. The ENFAMIL LIPIL product is the first infant formula in the U.S. to contain the nutrients docosahexaenoic acid and arachidonic acid. The Pharmaceuticals segment competes with other worldwide research-based drug companies, smaller research companies and generic drug manufacturers. These products are sold worldwide, mainly to wholesalers, retail pharmacies, hospitals, government entities and the medical profession. The Pharmaceuticals segment is comprised of the global pharmaceutical and international consumer medicines businesses. The products comprises of cardiovascular; virology, including human immunodeficiency virus infection; oncology; affective and other disorders; and immunoscience. The Company promotes its products in medical journals and directly to health care providers such as doctors, nurse practitioners, physician assistants, pharmacists, technologists, hospitals, Pharmacy Benefit Managers, Managed Care Organizations and government agencies. The markets in which the Company competes are generally broad-based and highly competitive. The Company is subject to global regulation by regional, country, state and local agencies.

France Telecom ADS

In keeping with my plan to diversify my dividend portfolio to include investments outside the United States, I've decided to add France Telecom ADS (FTE) to my IRA investment portfolio. The Group's principal activity is to provide telecommunications services to residential, personal and large businesses. The Group offers services through six segments which are Orange, Wanadoo, Equant, TP Group, Other big operators and International providers. Major lines of business include providing public fixed-line voiced telephone services, videoconferencing, mobile telecommunication services, broadcasting services and Internet and wireless applications. Their clients are service providers, system integrators and operators. The Group operates in France, the United Kindom, Spain, Poland and Latin America, Asia, Middle East and parts of Europe.

With current earnings per share of $2.70 and a dividend payout of $1.68 per share, their current dividend yield of 6.43% makes them an attractive buy for my IRA account. Their recent share price of $26.09 and a price to earnings of 9.7 also makes for an attractive investment opportunity. Add to this their recent announcement that they will soon be offering the popular iPhone in Britain and their future prospects seem quite attractive. Overall I believe they will make a very good addition to my portfolio.

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.

This Week's Trades

Decided to take advantage of Universal Insurance (UVE) 11% dividend yield and pick up some more shares for my taxable portfolio. UVE is a long term holding in my regular portfolio and my IRA. Also decided it might be time to have a look at REITs again. With real estate turning around and several companies gearing up to pick up distressed real estate investments, thought it might be good to shop around. I've decided on Capstead Mortgage (CMO), one of the real estate trusts that has survived the turmoil of the past few years and seems to be on track for recovery. Their dividend yield is currently 16.30%, which is enticing in its' own right, but I chose them mainly for their experience. They've been in business for quite some time and I figure if they could survive the past year and keep their dividend intact, then they're likely a pretty good bet going forward.

Still building cash, but things are looking up on the job front, so I may soon be deploying excess cash in my stock portfolios. Even though I'm not happy with things on the political front, I believe that the stock market and the American economy can overcome a lot of idiotic moves by our nations politicians. And there's always the hope that they'll be voted out and replaced with people who have show a little more fiscal responsibility.

The Week Ahead in Stocks

The stock market ended up for the week, after a better-than-expected jobs report fueled hopes of an economic recovery and provided solid footing for the recent market run-up.

The Labor Department said U.S. employers cut 247,000 non-farm jobs in July, far less than the 320,000 expected and the smallest decline in a year, suggesting the recession was abating. Also, the July unemployment rate eased to 9.4 percent in the prior month, the first time the rate has fallen since April 2008.

Treasurys came under selling pressure, driving yields higher, and the dollar finished the week firmer. In the week ahead, investor focus will be on the Treasury market and dollar as much as the Fed's 2 day meeting midweek and a heavy calendar of economic reports. Retail sales are released Thursday, and there are just a few major earnings reports, including Wal-Mart and several other chain stores.

Although there has been a lot of talk about all the money waiting on the sidelines, possibly coming in to stocks and driving the markets higher, I would expect some kind of pull back before that would happen. There is current speculation that the market could return to 12,000 but I wouldn't expect that to happen until sometime next year at the earliest.

For the coming week, I'll be buying shares of MLP, Markwest Energy Partners LP (MWE) for their 11%+ yield and adding to my stake in AT&T (T) in my IRA account.

Update on Personal Financial Situation

The stock market took a breather today, both of my accounts are down just a bit. Not really a bad thing as far as I'm concerned, since I'm still in the buying phase. I'd like to see the market level off or even drop back down a bit, so I could add to my holdings at the lower prices.

My IRA is set up for automatic investments each month. On the second Tuesday of every month I purchase more shares of stock for my retirement portfolio. This month I will be adding to my AT&T holdings. I own shares of AT&T in both of my accounts. I think their dividend is stable and I'm with them for the long haul.

Other investments in my IRA include British Petroleum (BP), Universal Insurance (UVE), AFLAC (AFL), Great Plains Energy (GXP), S&P 500 Index SPDR (SPY). Since opening the account in December of 2008, my holdings are up by 23.39%. Not a bad return! Just wish I could say the same for my taxable investment account. Still down some on that account, although the total dollar amount has increased. I've actually surpassed my investment goal for the year, so I've had to set the bar a little higher.

I've also been holding extra cash while continuing my job search, just in case I would need it for some reason. I've been able to accumulate the cash by cutting spending to the bare necessities. It's worked so well, I'm thinking that I may just keep it up when I return to work, just to build my investments more rapidly.

My total credit balances continue to decrease. I cancelled 2 of my credit cards to avoid extreme increases in the interest rates. Will probably cancel at least one more as soon as it's paid off. I've decided I really don't need more than 2 credit cards and plan on using them sparingly when the balances are paid. I really haven't been using my cards at all since being off work, just keep paying down the balances and paying cash for everything.

Given the crazy market and economic situation for the first half of 2009, I very happy with my finances right now. If the market continues to improve during the second half of the year, I should be in pretty good standing by the start of 2010.

IRA's, 401k's and Mutual Funds Revisited

On February 25th of this year, I wrote an entry in my blog explaining why I don't invest in mutual funds.

http://thebluecollarinvestor.blogspot.com/2008/02/why-i-dont-invest-in-mutual-funds.html

On November 14th, 2007 I also wrote an entry concerning my views on IRA and 401k retirement accounts.

http://thebluecollarinvestor.blogspot.com/2007/11/iras-and-401ks-and-lions-and-tigers-and.html

Needless to say, my views are not extremely popular. I'm sure that, due to these two articles, a lot of readers and so called "investment professionals" would question my credibility as an investor. However, I'm not exactly writing to give investment advice to anyone. I'm writing about what I personally am doing to build my investment portfolio, it's up to the reader to make up their own mind about what's right for them.

Having said all that, I thoroughly enjoyed reading Robert Kiyosaki's latest post on the Rich Dad blog, "Playing the Mutual Fund Lottery." I came to many of the same conclusions expressed in this article after my experience with mutual fund investments and after reviewing both IRA's and 401k's and deciding against investing in them for retirement. Robert Kiyosaki's credibility, as a successful investor and best-selling author, is unimpeachable. Read what he has to say on the subject of mutual funds and retirement accounts at:

http://richdadblog.blogspot.com/2008/05/playing-mutual-fund-lottery.html