# Investment Strategies



## Wake

I'm 26, and use Scottrade to invest. It'd be accurate to say I'm an amateur investor. 

Currently the only stock I own is GRHpC, and I've been wary since then. That stock is a preferred stock, giving dividends, and the overall value increased quite a bit since half a year ago. That's just being fortunate; there's a reason I haven't bought up more stocks. I fear I'd lose money on bad investments.

So, I'm thinking. It's tough trying to think of stable investments. *What I'd like to do is start a dividend reinvestment program utilizing preferred stocks that pay high monthly dividends.* The dividends I would have received are instead automatically used to buy even more of that same stock. That way my stocks will keep buying more of themselves, and then, when it's switched back to normal dividend payout, the reward will be greater. The risk in doing that, however, is constantly buying more stocks automatically in a company that eventually goes bankrupt.

Since I'm young, and am considering the odds, should I instead buy 5 preferred stocks at $300 each, and wrap each one into a DRIP? That way even if one or two go belly up the others would succeed. My knowledge in investing is little. More than some reading this not only have more knowledge, but valuable experience, too. 

What do you reckon would be wise here?


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## sameech

Wake said:


> I'm 26, and use Scottrade to invest. It'd be accurate to say I'm an amateur investor.
> 
> Currently the only stock I own is GRHpC, and I've been wary since then. That stock is a preferred stock, giving dividends, and the overall value increased quite a bit since half a year ago. That's just being fortunate; there's a reason I haven't bought up more stocks. I fear I'd lose money on bad investments.
> 
> So, I'm thinking. It's tough trying to think of stable investments. *What I'd like to do is start a dividend reinvestment program utilizing preferred stocks that pay high monthly dividends.* The dividends I would have received are instead automatically used to buy even more of that same stock. That way my stocks will keep buying more of themselves, and then, when it's switched back to normal dividend payout, the reward will be greater. The risk in doing that, however, is constantly buying more stocks automatically in a company that eventually goes bankrupt.
> 
> Since I'm young, and am considering the odds, should I instead buy 5 preferred stocks at $300 each, and wrap each one into a DRIP? That way even if one or two go belly up the others would succeed. My knowledge in investing is little. More than some reading this not only have more knowledge, but valuable experience, too.
> 
> What do you reckon would be wise here?



You won't make money just off dividends.  You need to look for stocks with growth (or keeping ahead of inflation) potential.  If nothing else, pile your money into your savings, wait until a solid company that will be around forever has some bad news that drives its price down, and then leap on its stock for awhile until it recovers.  I personally like stocks that have a lot of tangible assetts behind them like buildings, equipment, etc, as opposed to them making their money off somebody else making money (i.e. financials)


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## SteadyMercury

sameech said:


> wait until a solid company that will be around forever has some bad news that drives its price down, and then leap on its stock for awhile until it recovers.


This is easier said than done, nobody knows when the bottom of a company's stock price is and nobody knows if it will ever recover. Many once solid companies that were a staple of the US economy in their day have either gone bankrupt (GM, American Airlines, etc.) or seem to be on slow death march to it like Sears.


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## sameech

SteadyMercury said:


> sameech said:
> 
> 
> 
> wait until a solid company that will be around forever has some bad news that drives its price down, and then leap on its stock for awhile until it recovers.
> 
> 
> 
> This is easier said than done, nobody knows when the bottom of a company's stock price is and nobody knows if it will ever recover. Many once solid companies that were a staple of the US economy in their day have either gone bankrupt (GM, American Airlines, etc.) or seem to be on slow death march to it like Sears.
Click to expand...


Investment in any stock involves risk of loss.  That is just how the market works.  It goes to your tolerance level.  For instance, a friend of mine has made a boatload of money daytrading stocks that are teetering on bankruptcy.  A few cents gain on a lot of shares of a $6 stock offers a better ROI than one can get off a comparable gain in Google of Apple.  I don't have the guts for that kind of investing (and I am a cheapskate because I don't like paying fees to trade and don't trade huge volumes to make that a negligible cost)


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## Wake

I've been reading more into investing, and four things grab my attention.

1) Allot a few thousand or so towards DRIPs. Especially those that pay every month.

2) As Sameech said, wait for companies that have been around forever to suffer a blow that brings down their stock value a bit, then load up on it while it's cheap. Chaos creates opportunity.

3) Get into index funds. I'm looking at health care, real estate, and scientific research index funds. I want to diversify, and I'm feeling confident that, with an increasing population, health care stocks will continue to increase in value. Of course, I'm no financial master.

4) Buy up preferred stocks in real estate that have an APY of 10%-13%+. Maybe. I don't know. RE seems stable... I think. I'm thinking of putting $600 towards that with time and further reading. 




I have another $850 sitting in my Scottrade account, and am unsure whether to invest or withdraw it. Fretting and sweating with worry over any accidents like a transmission going out. Tortured myself a bit last night watching "Bizarre ER" videos on YouTube, too, so worrying a bit more than usual. People aren't nearly as durable as they think they are.


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## fiza200

Well, these strategies are useful for people to invest money in business.


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## Wake

I've considered mutual funds, but it's been said that the costs involved in paying the mutual fund manager are a detriment to one's investment over time. Index funds, however, have less cost associated with upkeep, because a machine keeps track of the changes in the whole index instead. 

Currently the only stock I own has gone up 38% since last December. However, this probably doesn't mean anything, because it can change abruptly. I'd like to dabble in various index funds, and pt some high-integrity (solid) stocks into a Dividend Re-Investment Plan (DRIP). Later this week I'll be searching through whatever Scottrade offers for index funds.


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## Pennywise

Get Jim Cramer's book. You need to diversify your investments, not only by company but by sector.


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## Pennywise

And Scottrade is an awesome investment tool. I use them as well.


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## Moonglow

Long term investments in power companies, food and water are good investments with lower risks..


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## Wake

Absolutely. I want to invest in various sectors when it comes to index funds. Start with $1000 in a health care index, one in utility, one in real estate, and one in scientific research (the latter option being riskier). It would probably be wise to start up a Traditional IRA while I'm a young 26, and sock away $5G each year, too. Currently I've paid off $6,000 in school debts with my own work, and am angling to pay off the remaining $7,000 soon; I want to be debt-free before I get heavy into investments. Otherwise the interest on those debts would eat me alive.


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## boedicca

Suggest you check out Vanguard funds.  They have various index funds and are no load.    Putting all your money in one stock is generally not a good idea.


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## Wake

I've heard about Vanguard, but I am inexperienced when it comes to using multiple online investment tools. I'm ignorant of what "no load" means. The goal is to put chunks of money into various sectors. Never all in one, because that basket could spill and my future omelette ruined. I would rather put $1G in four different index fund sector, than 10+ different stock types, because Scottrade's cost of $7 each and every time you purchase or sell a stock will eat into my finances. Rebalancing index fund stocks is another idea on the mind, bt going about it raises questions...


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## boedicca

No load means that you aren't paying someone a couple of points to manage your money.

Vanguard has a great deal of information at their website; you can search through funds based on risk tolerance, etc.


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## sameech

Wake said:


> I've heard about Vanguard, but I am inexperienced when it comes to using multiple online investment tools. I'm ignorant of what "no load" means. The goal is to put chunks of money into various sectors. Never all in one, because that basket could spill and my future omelette ruined. I would rather put $1G in four different index fund sector, than 10+ different stock types, because Scottrade's cost of $7 each and every time you purchase or sell a stock will eat into my finances. Rebalancing index fund stocks is another idea on the mind, bt going about it raises questions...



Depends on how long you want to hold the stocks.  Most funds have fees whether they are trading fees or not.  T. Rowe Price used to eat me alive with monthly management fees when I spread my money into different funds.


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## MHunterB

Wake, do you have a 401K available through your workplace?  If so, I suggest you try to put in the maximum the company will match - even while you're still paying off that 7K in debt.  

The magic of compound interest is best seen through time.  If you had 10K invested already, in another 40 years you'd have close to a million even if you never added another cent of contributions.  I know that sounds impossible but check it out:   Compounding

That's the argument to do it now.  Most of us earn more year by year, and so can afford to contribute more in later years - but then you're also likely to acquire more financial obligations with time.  The longer you wait, the more per month you've got to shovel into savings to catch up.

We are currently shoveling in every last penny we're allowed to into our 401 K - but that's only 22.5 K a year.  Oh, it sounds like a lot, but not if you're expecting to retire in only 3 more years.   We probably have enough to retire on right now - but another $100K or so couldn't hurt!  

We have been extremely lucky:  husband got hired the last 2-3 months before each company stopped giving pensions!  Otherwise we'd need a hell of a lot more in our nest egg:  it takes roughly $300K in assets to produce $1K/month of income (at 4% which is about what a 'guaranteed' rate of return tends to be).   

If I were starting now, I'd look for a 'no load' mutual fund from someone like Fidelity that was aimed for people retiring in about 35-40 years from now.  That's one way to get a pretty diversified investment base when you've got a very tiny portfolio.  You've got DECADES:  you can afford to make a few mistakes and you'll have time to make up for them.

  Oh, very important detail:  FEED THE SAVINGS FIRST!  Every raise, bonus, or windfall should increase your savings.  It's like 'found' money when you get a raise:  if you put half of that into savings of some form or another, you'll never have a chance to miss it.  We used to do US savings bonds because you had to wait 6 months to cash 'em in and you could buy one for $12.50......  

In a few years, re-evaluate your situation:  How secure is your employment, are your savings on track for your goal, what major expenses will there be in the next year or so.  OH, and that's AFTER you've stashed 3-6 months of living expenses somewhere fairly liquid.....  Do NOT!!! buy life insurance unless someone else is depending on your income.  And when you DO buy, buy term and invest the difference. (And the one area of car insurance to 'splurge' on is......medical payments.)

Now, if you've got some assets from raises, bonuses, windfalls - that's when you pick a stock and buy a block (100 shares) if you can.  You buy it for the DRIPs and to hold.......forever.  We're the third generation to enjoy ownership of a lot of Niagara-Mohawk and Proctor & Gamble - and we hope to pass that on to our son.

If you've met your regular investment goals, there's nothing wrong with getting a little wild 'n' crazy with a couple of penny stocks or whatever - just don't get too greedy or quit your day job : ))

There are a lot of 'automated' programs available to assess your risk tolerance and your goals and point you towards a good mix for your particular style and situation.  We've used the 'Motley Fool' one and also 'Financial Engines'.....  any of them can give you some general idea of what might be appropriate for you now : ))


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## DriftingSand

Wake said:


> I'm 26, and use Scottrade to invest. It'd be accurate to say I'm an amateur investor.
> 
> Currently the only stock I own is GRHpC, and I've been wary since then. That stock is a preferred stock, giving dividends, and the overall value increased quite a bit since half a year ago. That's just being fortunate; there's a reason I haven't bought up more stocks. I fear I'd lose money on bad investments.
> 
> So, I'm thinking. It's tough trying to think of stable investments. *What I'd like to do is start a dividend reinvestment program utilizing preferred stocks that pay high monthly dividends.* The dividends I would have received are instead automatically used to buy even more of that same stock. That way my stocks will keep buying more of themselves, and then, when it's switched back to normal dividend payout, the reward will be greater. The risk in doing that, however, is constantly buying more stocks automatically in a company that eventually goes bankrupt.
> 
> Since I'm young, and am considering the odds, should I instead buy 5 preferred stocks at $300 each, and wrap each one into a DRIP? That way even if one or two go belly up the others would succeed. My knowledge in investing is little. More than some reading this not only have more knowledge, but valuable experience, too.
> 
> What do you reckon would be wise here?



I'm sorry to say that I had a 401k with lots of money in it at the end of 2008.  When the economy began to crash in early 2009 my 401k steadily dropped in value until I panicked and removed what I had left. I had to pay substantial fees and penalties for early withdrawal and ended up losing about $25,000.00 when it was all said and done.  As a result, I no longer trust the stock market.  Others have fared much better than I so you probably don't want to take advice from me.

I recently decided to open another 401k but very tentatively. After a few months I started getting checks from the investment firm who handled the account.  I had no idea why they were sending me checks when I hadn't requested it. I contacted my human resources department and they didn't have any answers either.  So ... instead of messing with it I cancelled any further deposits/investments out of pure distrust of the system.  I now take a portion of my check and put it into a safe and I buy silver when I can.  The majority of investment gurus would tell me that I can't possibly save up enough for retirement but retirement doesn't sound that exciting to me anyway.  If I'm fortunate, I will die of a heart attack before wasting away in an old folks home.


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## SteadyMercury

DriftingSand said:


> I'm sorry to say that I had a 401k with lots of money in it at the end of 2008.  When the economy began to crash in early 2009 my 401k steadily dropped in value until I panicked and removed what I had left. I had to pay substantial fees and penalties for early withdrawal and ended up losing about $25,000.00 when it was all said and done.  As a result, I no longer trust the stock market.


I don't understand why you didn't just learn from your lessons of what you did wrong and be a smarter investor instead of just saying never again. I also don't understand why you removed your money, almost every 401k has some sort of stable value fund that doesn't return much but is very low risk.

Either way lesson learned = don't sell low.




DriftingSand said:


> I now take a portion of my check and put it into a safe and I buy silver when I can.  The majority of investment gurus would tell me that I can't possibly save up enough for retirement but retirement doesn't sound that exciting to me anyway.  If I'm fortunate, I will die of a heart attack before wasting away in an old folks home.


Having 100% of your retirement funds in a single precious metal commodity is far more volatile than when you were just tossing it into your 401k.


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## SteadyMercury

Wake said:


> I've heard about Vanguard, but I am inexperienced when it comes to using multiple online investment tools.


Vanguard is just an very low cost investment management company, it isn't so much about online investment tools as it is a company with a wide selection of mutual funds across all asset classes with no load and low expense ratios.

They aren't the only one, Fidelity, Schwab, etc. fees for ETFs and mutual funds are quite low today compared to 20 years ago you really can't go wrong with any of the large discount firms.

Good luck.


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## DriftingSand

SteadyMercury said:


> DriftingSand said:
> 
> 
> 
> I'm sorry to say that I had a 401k with lots of money in it at the end of 2008.  When the economy began to crash in early 2009 my 401k steadily dropped in value until I panicked and removed what I had left. I had to pay substantial fees and penalties for early withdrawal and ended up losing about $25,000.00 when it was all said and done.  As a result, I no longer trust the stock market.
> 
> 
> 
> I don't understand why you didn't just learn from your lessons of what you did wrong and be a smarter investor instead of just saying never again. I also don't understand why you removed your money, almost every 401k has some sort of stable value fund that doesn't return much but is very low risk.
> 
> Either way lesson learned = don't sell low.
> 
> 
> 
> 
> DriftingSand said:
> 
> 
> 
> I now take a portion of my check and put it into a safe and I buy silver when I can.  The majority of investment gurus would tell me that I can't possibly save up enough for retirement but retirement doesn't sound that exciting to me anyway.  If I'm fortunate, I will die of a heart attack before wasting away in an old folks home.
> 
> Click to expand...
> 
> Having 100% of your retirement funds in a single precious metal commodity is far more volatile than when you were just tossing it into your 401k.
Click to expand...


At this point in my life?  I just don't care.  Whatever will be will be.  Many of the investment funds these days are being invested in foreign interests (China, India, etc.) so it doesn't bother me that I'm not helping America's financial adversaries.


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## SteadyMercury

I don't understand the "at this point in your life" I don't think there is ever a point in one's life where correctly managing your personal finances becomes less relevant.


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## MHunterB

SM, there is a LOT more emotional stuff attached to how most of us see our money than one might expect....  I think every one of us has made errors which cost us hundreds, if not thousands of dollars.

When we were very young and poor and very first married, the husband signed up for a correspondence-type course in computers.  He was in the military, but teaching at the Signal Corps school, and didn't realize that once he changed duty stations a few months later he wouldn't have the kind of time he needed to invest in the course to be successful.  And of course it never occurred to him to try to renege on any commitment.  (He later learned to not OVER-commit his energy so drastically).

So that course mistake cost us $1500.....seems like small potatoes, no?  Except that was nearly 40 years ago, and we were making about $7,000 or so a year in those days (I still have the 1981 tax form where we paid taxes on just over $10K of income).    We paid it off for several years at $25/month (our car payment was $47/month and rent was $130 - $180)  ..... while putting $25/month into savings bonds.

I get queasy thinking about what that $1500 would've give n us now if we'd put it into savings : (( - but to be honest, I think we'd have spent most of it.  Not on anything incredibly frivolous, just maybe a color TV set, or we'd have replaced the furniture the 'low-bid' moving company wrecked for us a few years sooner......

Oh, and I think that was the LAST financial decision the husband made without conferring with me, LOL.  

BOTH our fathers had told him "Give her the paycheck, take your allowance, and don't ask questions".......he didn't realize he'd violated a Prime Directive until afterwards.  Yes, if all 4 parents gave the same answer/advice, it was a 'PD'.  I can't think of more than once or twice when they were all wrong together, curse them!


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## MHunterB

DS - I don't understand your POV either, but that doesn't mean you're wrong.  It isn't what I'd do, but each of us should do what lets us sleep at night.

We've been very lucky:  the husband was unemployed or underemployed for five years running ('02-'06) and we had to pay ALL our medical insurance on our own for most of that time.  We were very reluctant to go without insurance, considering that the husband had his first angioplasty in '94 and we knew he'd be needing more with time (he's only had one more round so far).  And whenever he's got chest pain, it's an ER/hospital visit for about 10K worth of tests to make sure it's not a $50 K heart attack.  Not to mention I'd get an ulcer worrying about how we'd pay for things......  

So there were 5 years when we were unable to contribute ANYTHING to our 401K, and we were just thankful we didn't have to deplete it.  Instead, we refinanced the house - twice - so we could keep going and pay for the son to go to college (as it was, the kid owes about $25K even though we helped, he worked and he had scholarships) - which is why we'll need that big withdrawal from the 401K.   We owe something like $167 K on the house, which doesn't leave near enough equity to buy even a small condo.


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## Wake

Mhunter, I'd like to try some compounding. My employer does offer it, but my paycheck doesn't really give me leeway to start doing that just yet. I've been getting ready to start seeking a second job, and should I be successful I'll definitely start putting more money into it. 

I'd like to open up a traditional IRA, but I don't know if those compound, too..

Definitely want to make and sock more money away, and I just got a small raise so that helps a bit. I just took $2700 out of my savings to pay off a student loan whose interest increased to 6.8%. It was probably reckless, but I was very scared that the interest would eat me alive, especially if I lost my job. Now my hours have been reduced down to 24 per week, so I've been trying to take on more shifts, and my employers have been trying to hand me some high profile cases, but the families of those clients keep changing their minds at the very last minute. The last one would have had me working 100 hours a week, so now I've had it and am now on the job-seeking war-path. I need job security, where I know I'll have reliable hours that don't constantly fluctuate. Now my mom is asking for help with her dental bill (repairing an old crown), so I will take care of that $970 bill, which is going to hurt like hell.

I can't even begin to think about insurance yet. Hopefully if I get a job at a hospital they'll give me insurance. I definitely want to do DRIPs, and get that snowballing while I'm young, but I need to bust my hump and earn more money. I want to sock the max limit in a traditional IRA every chance I get, and look into a 401K and DRIPs. Some preferred stocks and index funds that'll shower me with dividends would help, too. I was looking at a money market account at the bank, because I thought that if I had $2500 in it they'd pay me $17.50 per month in interest, but I later learned that was PER YEAR, which sucks! If it were per month that'd be pretty nifty.

One thing I've been doing is shedding most of my material possessions. If it can all fit in 1-3 plastic bins, besides my car, I'm good. Also I'm not wanting to buy a big, beautiful house when I'm older because of the property taxes. They scare me. One of my  clients with ALS owns a beautiful house, but his property taxes are $6,500 PER MONTH. That's not including all the medical expenses regarding ALS, which isn't cheap, especially when you consider insurance, hospice, and the costs of the home care agency.

If I can just make a portfolio where I'm getting cash pouring in from dividends into my investment account, while snowballing other stocks and stuff with compound interest and market appreciation, I'd be pretty happy. That feeling of raking in $400+ in dividends would take a lot of stress out of my life. Currently my one stock, GRHpC, only nets me $7.50 each month, and has appreciated by about 35%. I did have ADKpC, but I was stupid and inexperienced and pulled out before it shot up in value. Dehaeir Medical was another good one that soared upwards, but I was jumpy and never put in while there were signs it was going to skyrocket. Bah, I just want to be set so my wife and I aren't struggling like some of the people I've been caring for.


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## sjay

Wake if you don't even know what  compounding means,you really need to learn a lot more  before you invest on your own.Also indexing is primarily done with indices such as the SP500 not with sectors.Right now your odds are no better than going to a casino.


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## finebead

I primarily trade with the Exchange Traded Fund (ETF) called "SPY", which is basically buying the S&P 500 large cap index.  The ETF trades like a stock, it is more flexible than using a mutual fund, it is cheaper as the fees are very low for the industry, and you get automatic diversification across industries.  It pays out its dividend at the end of each quarter, about 2% annually currently, but you get growth potential with the dividend.

Studies show that VERY FEW mutual fund managers beat the return on the S&P over a 10 year period.  If that's true, why pay the higher fees to a fund manager, when you can just but SPY?


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## Mac1958

Wake, I'm an advisor, and I probably shouldn't get too far into this, but some completely random thoughts (yeah, I can't help myself, I love this stuff):

... MHunterB is exactly right, first place to look is an employer 401K plan.  Most will match your contributions by 3% to 6% of your gross income - think of that, free money.  If you're contributing 3% and they contribute 3%, that's 100% on your money before growth, assuming that you stay long enough with your employer to become vested in their matching dollars.  Then that money grows tax deferred, love it.

... Next look at an IRA, either traditional or Roth.  More tax deferral, and you can open it up online with Vanguard (although I Iike T Rowe Price better).

... I don't like this idea of you taking income from your investments at such a young age, so the whole dividends thing bugs me.  You need your money to compound over time, and it won't do that as long as you're siphoning off cash.  Plus, don't forget, you'll be taxed on that income.  I'd love to see you get away from that whole idea ASAP.

... Over the last 20 years, the average active investor (those who think they can predict and/or time the market and keep moving around) has made only a 3.49% annualized return (DALBAR study).  That's less than half the market.  Sure, your friends will tell you about their big gains in a stock, but they somehow forget to mention all the dogs they bought.

... Want some free advice?  Unless you absolutely have to draw income, invest in an aggressive portfolio (aggressive is fine at your age, you have plenty of time to recover from shit storms) of ETF's that lean towards mid cap and small cap stocks, which outperform the market by quite a bit over time.  Then just _leave them the hell alone_ and keep contributing every freaking month.

... I think you're over-thinking this, and that's a very normal thing.  Many, many people do that.  Don't chase gains, let them come to you naturally using TIME.

... Just for fun, look into the following portfolio:  20% each of IJH, IJR, IVV, IWC.  10% each of CVY, HGI.  If you told me you were pouring after-401K money into that portfolio on a monthly basis, I'd slap you on the back and say, "holy crap, that's aggressive, but you're gonna be very happy later."  To be even more aggressive, increase IVV to 30% and drop CVY and HGI to 5% apiece.

My two cents, worth every penny.

No pun intended.

.


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## candycorn

I recommend you attend Financial Peace University through Dave Ramsey.  I disagree with Dave on a few points though. 

His advice is to own 4 mutual funds, on Large Cap, One Growth fund, one other stock fund and one international fund (it's been a few years--don't remember all the details).  I rejected the last two and doubled up on the large cap and took the International Fund and invested in a fund that had a mix of bonds and stocks.  

These are designed (in the pan) to be held for 5+ years.  I have funds with Vanguard, Fidelity, and another company.  

The second way I disagree with Dave is to "NEVER" own individual stocks.  I own a large chunk of a stock that pays $0.60-$0.70 per quarter so every 3 months from that company, I get a check for a few hundred dollars.  A second company is set up similarly but is on a "different clock" and it pays every 3 months as well but on different months. So, in September, company A will pay off and in November, company B will pay off.  

So I can take a mini vacation just about every 3 months.  Sometimes, I re-invest the dividends, sometimes not. 

A third way I disagree is with his wanting 15% of your earnings into IRAs.  I was vested from my public health days so I'm a bit insulated by my pension.  Even if I wasn't, I would not put that much into the IRA.  My family has a history of dying early so I don't put that much interest into retiring gracefully.  Never quite understood why people would wait until they are immobile and of poor eyesight to travel and see the sights.  I'm seeing what I can see NOW!!!

There is a bunch of religious stuff in FPU as well.  I think it's best ignored although I do follow his advice about giving regularly.


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## sjay

candycorn said:


> I recommend you attend Financial Peace University through Dave Ramsey.  I disagree with Dave on a few points though.
> 
> His advice is to own 4 mutual funds, on Large Cap, One Growth fund, one other stock fund and one international fund (it's been a few years--don't remember all the details).  I rejected the last two and doubled up on the large cap and took the International Fund and invested in a fund that had a mix of bonds and stocks.
> 
> These are designed (in the pan) to be held for 5+ years.  I have funds with Vanguard, Fidelity, and another company.
> 
> The second way I disagree with Dave is to "NEVER" own individual stocks.  I own a large chunk of a stock that pays $0.60-$0.70 per quarter so every 3 months from that company, I get a check for a few hundred dollars.  A second company is set up similarly but is on a "different clock" and it pays every 3 months as well but on different months. So, in September, company A will pay off and in November, company B will pay off.
> 
> So I can take a mini vacation just about every 3 months.  Sometimes, I re-invest the dividends, sometimes not.
> 
> A third way I disagree is with his wanting 15% of your earnings into IRAs.  I was vested from my public health days so I'm a bit insulated by my pension.  Even if I wasn't, I would not put that much into the IRA.  My family has a history of dying early so I don't put that much interest into retiring gracefully.  Never quite understood why people would wait until they are immobile and of poor eyesight to travel and see the sights.  I'm seeing what I can see NOW!!!
> 
> There is a bunch of religious stuff in FPU as well.  I think it's best ignored although I do follow his advice about giving regularly.


 
Get back on your meds as soon as possible.


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## Wake

I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments. 

Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,

Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen. 

I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.


----------



## candycorn

Wake said:


> I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments.
> 
> Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,
> 
> Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen.
> 
> I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.



Are you *totally* out of debt with the exception of your housing? If the answer is "no", aside from retirement planning, you shouldn't be investing in anything.


----------



## sameech

candycorn said:


> Wake said:
> 
> 
> 
> I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments.
> 
> Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,
> 
> Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen.
> 
> I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.
> 
> 
> 
> 
> 
> Are you *totally* out of debt with the exception of your housing? If the answer is "no", aside from retirement planning, you shouldn't be investing in anything.
Click to expand...



Yeah that is bad advice.  If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.  debt is usually dischargeable in bankruptcy so acquiring assets should not take back seat usually unless you are paying loan shark interest rates.  Besides, people need to do that which makes them feel the most comfortable.


----------



## SteadyMercury

sameech said:


> If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.


How will he know what his returns will be to make this decision? That is why it isn't an apples to apples comparison, you can't compare the known interest rate of debt to a potential return (or loss).


----------



## SteadyMercury

Mac1958 said:


> Sure, your friends will tell you about their big gains in a stock, but they somehow forget to mention all the dogs they bought.


Same friends always win in Vegas too.


----------



## SteadyMercury

candycorn said:


> The second way I disagree with Dave is to "NEVER" own individual stocks.  I own a large chunk of a stock that pays $0.60-$0.70 per quarter so every 3 months from that company, I get a check for a few hundred dollars.  A second company is set up similarly but is on a "different clock" and it pays every 3 months as well but on different months. So, in September, company A will pay off and in November, company B will pay off.


You know stock mutual funds throw off dividends every quarter too right?



candycorn said:


> I would not put that much into the IRA.  My family has a history of dying early so I don't put that much interest into retiring gracefully.  Never quite understood why people would wait until they are immobile and of poor eyesight to travel and see the sights.  I'm seeing what I can see NOW!!!


Seeing things now isn't mutually exclusive to using tax advantaged retirement savings vehicles.


----------



## sameech

SteadyMercury said:


> sameech said:
> 
> 
> 
> If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.
> 
> 
> 
> How will he know what his returns will be to make this decision? That is why it isn't an apples to apples comparison, you can't compare the known interest rate of debt to a potential return (or loss).
Click to expand...


doesn't matter.  if you put it all into debt and you lose your job, you have nothing but a smaller amount to discharge.  At least with investment you have a potential to have something to cash out and survive on.


----------



## SteadyMercury

sameech said:


> doesn't matter.  if you put it all into debt and you lose your job, you have nothing but a smaller amount to discharge.  At least with investment you have a potential to have something to cash out and survive on.


That is a completely different issue, he might already have an emergency fund parked in something safe. If he doesn't then we aren't talking about investing, we're talking about first building up an emergency fund in something like a savings or money market account, then looking to invest. He's talking about stock funds so we can assume he's investing.

And what are you talking about discharge?


----------



## sameech

SteadyMercury said:


> sameech said:
> 
> 
> 
> doesn't matter.  if you put it all into debt and you lose your job, you have nothing but a smaller amount to discharge.  At least with investment you have a potential to have something to cash out and survive on.
> 
> 
> 
> That is a completely different issue, he might already have an emergency fund parked in something safe. If he doesn't then we aren't talking about investing, we're talking about first building up an emergency fund in something like a savings or money market account, then looking to invest. He's talking about stock funds so we can assume he's investing.
> 
> And what are you talking about discharge?
Click to expand...


You have a couple assumptions there.  I can go on the interweb and put a sell order in and have my money in a few day.  That is emergency fund enough.  second, I already posted to him my strategy of buying individual stocks.  even if you buy steady stocks like MSFT that don't burn the doors down, you are going to be better off over time than putting the money in a .45%APR savings account.   If it works for him, great.  If it doesn't, so be it.  Different people have different tolerances for risk, goals, etc.


----------



## SteadyMercury

sameech said:


> I can go on the interweb and put a sell order in and have my money in a few day.  That is emergency fund enough.


No, it isn't. An emergency fund doesn't belong anywhere that can lose money.



sameech said:


> already posted to him my strategy of buying individual stocks.  even if you buy steady stocks like MSFT that don't burn the doors down, you are going to be better off over time than putting the money in a .45%APR savings account.


You clearly don't understand what an emergency fund is, it doesn't get invested in individual stocks.

MSFT steady? That is hilarious, steady except for those occasional > 50% drops:






There is a place for stock investing, but it sure as hell isn't individual tech stocks in an emergency fund and it also isn't comparable to paying off debt based on speculative returns. You are giving absolutely terrible personal finance advice.


----------



## sameech

SteadyMercury said:


> sameech said:
> 
> 
> 
> I can go on the interweb and put a sell order in and have my money in a few day.  That is emergency fund enough.
> 
> 
> 
> No, it isn't. An emergency fund doesn't belong anywhere that can lose money.
> 
> 
> 
> sameech said:
> 
> 
> 
> already posted to him my strategy of buying individual stocks.  even if you buy steady stocks like MSFT that don't burn the doors down, you are going to be better off over time than putting the money in a .45%APR savings account.
> 
> Click to expand...
> 
> You clearly don't understand what an emergency fund is, it doesn't get invested in individual stocks.
> 
> MSFT steady? That is hilarious, steady except for those occasional > 50% drops:
> 
> 
> 
> 
> 
> 
> There is a place for stock investing, but it sure as hell isn't individual tech stocks in an emergency fund and it also isn't comparable to paying off debt based on speculative returns. You are giving absolutely terrible personal finance advice.
Click to expand...


No You are just johnny come lately.  I todl Wake already what I look for based on my investing pattern and he would need to do the same.  Putting money in a savings account at 1/2% APR with over 1% inflation means you are losing real value in your money.


----------



## SteadyMercury

He doesn't need to do anything that someone who calls MSFT "steady" says to do.

Build an emergency fund that is not invested in stocks, because if you have volatile investments in it you can't count on it being there when you need it. If a financial crisis like 2001/2008 happens that causes you to lose your job you might find half of it is gone right when you need it the most.

Then decide investing for the future vs. paying down debt. This depends on the interest rate of your debt but not as a straight comparison vs. potential investment returns.


----------



## sameech

SteadyMercury said:


> He doesn't need to do anything that someone who calls MSFT "steady" says to do.
> 
> Build an emergency fund that is not invested in stocks, because if you have volatile investments in it you can't count on it being there when you need it. If a financial crisis like 2001/2008 happens that causes you to lose your job you might find half of it is gone right when you need it the most.
> 
> Then decide investing for the future vs. paying down debt. This depends on the interest rate of your debt but not as a straight comparison vs. potential investment returns.



It is a steady performer in relation to the market.  If you want 2.5% "steady" on a Tbill feel free.  In the real world, part of financial security is the ability to readily access credit at an affordable rate.  You will not be able to do that if you do not have a good credit score.  You cannot have a good credit score with no credit history for them to look at.  Carrying debt is a necessary part of good financial planning for the future for we mere mortals.


----------



## SteadyMercury

sameech said:


> It is a steady performer in relation to the market. If you want 2.5% "steady" on a Tbill feel free.


In the context of an emergency fund an asset that can drop 50% in value isn't a wise choice, for reasons already explained. It isn't about what I want, it is about risk vs. reward for the part of your savings you can't afford to have dropped greatly in value when you need it.



sameech said:


> Carrying debt is a necessary part of good financial planning for the future for we mere mortals.


Debt itself isn't bad (depends on the debt and it's use) but claiming it is "necessary" is again wrong.


----------



## william the wie

Look up DRIPs and DSPs on the web. It has a low ceiling for throughput but utilities paying 3-5% discounts for direct purchases of treasury stock meant that I went up 20% in 2000. That was still a bad year for me. Still if you have less than $20,000 moving money through a candycorn style portfolio should generate a 49.9% return most years.


----------



## candycorn

sameech said:


> candycorn said:
> 
> 
> 
> 
> 
> Wake said:
> 
> 
> 
> I'm learning more about investing. The main thing that has been holding me back are some feelings of apprehension. Experience is what I need and the only way I'll get it is by trying out more and different kinds of investments.
> 
> Dividends are nice, but I think if I wise up and focus on timing, I could make a lot in capital gains. Still learning about earnings per share (EPS), sector index funds, and trying to best understand how to predict the stock market. My reasoning is that the economy is made based on human needs. If I can figure more out about how people are changing, I can use that to figure out how the market is changing. If I were to invest in a sector index, health care would be it, followed by housing (REITs?), and scientific technology. The population continues to grow unhindered, so there will be more patients in need of care: ergo, more hospitals,
> 
> Planning to use bye/sell stock limits to make it easier to trade, while preventing slippage. I want the sense of reassurance knowing that dividends will continue pouring in while the index fund slowly grow in value. I feel like the young man who envisions hard-earned wealth through investing and trading... yet has done little with his money because of fear. It's tough, especially when you have to research select companies with whatever resources you have which, sometimes, is just paper and a pen.
> 
> I'm not earning enough $$$ to afford recklessness in vestments. If I put $800 into a stock and it crashes, that will be a stinging loss. I'll try a sector index fund first.
> 
> 
> 
> 
> 
> Are you *totally* out of debt with the exception of your housing? If the answer is "no", aside from retirement planning, you shouldn't be investing in anything.
> 
> Click to expand...
> 
> 
> 
> Yeah that is bad advice.  If you are paying less than your return in interest, it is still better to invest and pay down the debt overtime.  debt is usually dischargeable in bankruptcy so acquiring assets should not take back seat usually unless you are paying loan shark interest rates.  Besides, people need to do that which makes them feel the most comfortable.
Click to expand...


And your "There is always bankruptcy" approach is "good" advice?  If I were reading that, I'd be very dubious of the comment.  

One thing Dave taught me (or better put...showed me) was that when you're not paying $350 a month to Visa, JCP, and Discover....you have $350 a month to invest or to give as gifts or to simply enjoy.  

In my view (not trying to pick a fight or anything), people do not "need" to do that which makes them feel the most comfortable....kids do that.


----------



## sameech

candycorn said:


> And your "There is always bankruptcy" approach is "good" advice?  If I were reading that, I'd be very dubious of the comment.
> 
> One thing Dave taught me (or better put...showed me) was that when you're not paying $350 a month to Visa, JCP, and Discover....you have $350 a month to invest or to give as gifts or to simply enjoy.
> 
> In my view (not trying to pick a fight or anything), people do not "need" to do that which makes them feel the most comfortable....kids do that.



Well obviously you were reading that or you wouldn't be commenting on it.  It is just reality.  People lose their jobs unexpectedly.  Stocks are more readily accessible assets than they used to be.  It makes no difference to what happens in bankruptcy whether you owe Visa $5K or $20K.  If you can't pay you can't pay and your credit is screwed.  

If you don't use credit, it is harder to get credit at good rates.  That is just reality as well.  I pay very low interest on my credit cards compared to most people I know.  Not intro rates either.  I had to buy and finance my brother's boat as a straw party because he couldn't get the credit.  He was making  about twice what I was but he paid cash for everything, literally had nothing on his credit report except that they checked his credit, and they wouldn't loan him the money.

Adults need to do that which makes them feel the most comfortable.  Some people feel better renting, some feel better owning.  Some people feel more comfortable buying new cars that are more reliable on their long commutes/travels, and some people feel more comfortable using the difference between what they have and what they could have purchased for other things.


----------



## SteadyMercury

I pay my credit card off every month, so interest rate isn't relevant to me I chose it for solid cash back rewards program and no annual fee.


----------



## sameech

SteadyMercury said:


> I pay my credit card off every month, so interest rate isn't relevant to me I chose it for solid cash back rewards program and no annual fee.



And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.  The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.


----------



## Wake

Paid off well over half of my $12,000 school debt. Would have paid off the fourth loan, but I paid for a loved one's root canal and permanent filling. I want to get locked into some index funds while I'm still so young, so they have 40+ years to grow.


----------



## sameech

Wake said:


> Paid off well over half of my $12,000 school debt. Would have paid off the fourth loan, but I paid for a loved one's root canal and permanent filling. I want to get locked into some index funds while I'm still so young, so they have 40+ years to grow.



If you want to put all your eggs in one basket, I would probably look for funds heavy on the S&P side as opposed to the Dow side if I were you, not that I am a huge fan of funds.


----------



## Flopper

Wake said:


> I'm 26, and use Scottrade to invest. It'd be accurate to say I'm an amateur investor.
> 
> Currently the only stock I own is GRHpC, and I've been wary since then. That stock is a preferred stock, giving dividends, and the overall value increased quite a bit since half a year ago. That's just being fortunate; there's a reason I haven't bought up more stocks. I fear I'd lose money on bad investments.
> 
> So, I'm thinking. It's tough trying to think of stable investments. *What I'd like to do is start a dividend reinvestment program utilizing preferred stocks that pay high monthly dividends.* The dividends I would have received are instead automatically used to buy even more of that same stock. That way my stocks will keep buying more of themselves, and then, when it's switched back to normal dividend payout, the reward will be greater. The risk in doing that, however, is constantly buying more stocks automatically in a company that eventually goes bankrupt.
> 
> Since I'm young, and am considering the odds, should I instead buy 5 preferred stocks at $300 each, and wrap each one into a DRIP? That way even if one or two go belly up the others would succeed. My knowledge in investing is little. More than some reading this not only have more knowledge, but valuable experience, too.
> 
> What do you reckon would be wise here?


I've been investing in the stock market about twice as long as you've been alive so let me offer you a few suggestions.

You seem to be interested in investing as oppose to speculation and trading.  At your age that's great. Periodic investments whether they be dividend reinvestment programs or just dollar cost averaging will serve you well over the long haul.  By long haul, I mean 10, 20 years, or more.

There is nothing wrong with preferred stock it your're interested in income.  At your age, you should be considering some investments that allow you to participate more in the growth of the company.

If I were you, I would diversify by putting my money in various sectors. I would invest globally, not just in the US.  Lastly, if you don't have enough money now to diversify, consider a mutual fund that does. There's plenty to choose from.  Personally, I prefer index funds.


----------



## Flopper

MHunterB said:


> Wake, do you have a 401K available through your workplace?  If so, I suggest you try to put in the maximum the company will match - even while you're still paying off that 7K in debt.
> 
> The magic of compound interest is best seen through time.  If you had 10K invested already, in another 40 years you'd have close to a million even if you never added another cent of contributions.  I know that sounds impossible but check it out:   Compounding
> 
> That's the argument to do it now.  Most of us earn more year by year, and so can afford to contribute more in later years - but then you're also likely to acquire more financial obligations with time.  The longer you wait, the more per month you've got to shovel into savings to catch up.
> 
> We are currently shoveling in every last penny we're allowed to into our 401 K - but that's only 22.5 K a year.  Oh, it sounds like a lot, but not if you're expecting to retire in only 3 more years.   We probably have enough to retire on right now - but another $100K or so couldn't hurt!
> 
> We have been extremely lucky:  husband got hired the last 2-3 months before each company stopped giving pensions!  Otherwise we'd need a hell of a lot more in our nest egg:  it takes roughly $300K in assets to produce $1K/month of income (at 4% which is about what a 'guaranteed' rate of return tends to be).
> 
> If I were starting now, I'd look for a 'no load' mutual fund from someone like Fidelity that was aimed for people retiring in about 35-40 years from now.  That's one way to get a pretty diversified investment base when you've got a very tiny portfolio.  You've got DECADES:  you can afford to make a few mistakes and you'll have time to make up for them.
> 
> Oh, very important detail:  FEED THE SAVINGS FIRST!  Every raise, bonus, or windfall should increase your savings.  It's like 'found' money when you get a raise:  if you put half of that into savings of some form or another, you'll never have a chance to miss it.  We used to do US savings bonds because you had to wait 6 months to cash 'em in and you could buy one for $12.50......
> 
> In a few years, re-evaluate your situation:  How secure is your employment, are your savings on track for your goal, what major expenses will there be in the next year or so.  OH, and that's AFTER you've stashed 3-6 months of living expenses somewhere fairly liquid.....  Do NOT!!! buy life insurance unless someone else is depending on your income.  And when you DO buy, buy term and invest the difference. (And the one area of car insurance to 'splurge' on is......medical payments.)
> 
> Now, if you've got some assets from raises, bonuses, windfalls - that's when you pick a stock and buy a block (100 shares) if you can.  You buy it for the DRIPs and to hold.......forever.  We're the third generation to enjoy ownership of a lot of Niagara-Mohawk and Proctor & Gamble - and we hope to pass that on to our son.
> 
> If you've met your regular investment goals, there's nothing wrong with getting a little wild 'n' crazy with a couple of penny stocks or whatever - just don't get too greedy or quit your day job : ))
> 
> There are a lot of 'automated' programs available to assess your risk tolerance and your goals and point you towards a good mix for your particular style and situation.  We've used the 'Motley Fool' one and also 'Financial Engines'.....  any of them can give you some general idea of what might be appropriate for you now : ))


Absolutely, max out your your your IRA or 401K contribution. If you still have investment dollars then invest in the market.  If you really have the investments skills to pick stocks, which not many people have, then buy stocks.  Otherwise, invest in mutual funds.  One thing I have learned about mutual funds is the type of fund and manger are the keys to the fund's success.  The best advice, I ever got as a novice was to have rules for buying and selling and stick to them.  Do paper trades for at least a year. If you can't make money on paper, you sure as hell can't make it using real money.


----------



## william the wie

low volatility indices like SPLV are good but I am contemplating using a "Beating the Dow" strategy on the Zambian stock exchange


----------



## SteadyMercury

sameech said:


> And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.


Congrats. You are taking a brief timeframe in one of the strongest bull markets in history to attempt to make a general point about investing vs. debt.



sameech said:


> The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.


They don't need to have any debt at all, and you're mistaken if you believe holding debt is necessary  for people to escape being dependent on a 9-5 paycheck.

Paying off debt is like a guaranteed rate of return, most people would kill to get a guaranteed rate of return at the percentage most people's debt is held at.

Paying interest on a credit card is just poor personal finance skills, don't spend more than you can afford so you pay off your credit cards every month.


----------



## SteadyMercury

Flopper said:


> If I were you, I would diversify by putting my money in various sectors. I would invest globally, not just in the US.  Lastly, if you don't have enough money now to diversify, consider a mutual fund that does. There's plenty to choose from.  Personally, I prefer index funds.


Yep. There are so many index funds with very diversified holdings and extremely low fees, it is an easy way to get started in investing.

Despite everyone on the internet bragging they made blah blah money picking stocks, study after study has shown index funds usually beat active pickers.


----------



## william the wie

SteadyMercury said:


> Flopper said:
> 
> 
> 
> If I were you, I would diversify by putting my money in various sectors. I would invest globally, not just in the US.  Lastly, if you don't have enough money now to diversify, consider a mutual fund that does. There's plenty to choose from.  Personally, I prefer index funds.
> 
> 
> 
> Yep. There are so many index funds with very diversified holdings and extremely low fees, it is an easy way to get started in investing.
> 
> Despite everyone on the internet bragging they made blah blah money picking stocks, study after study has shown index funds usually beat active pickers.
Click to expand...

Yeah but you need to write covered options to reduce the net transactions costs of rebalancing.


----------



## Flopper

SteadyMercury said:


> Flopper said:
> 
> 
> 
> If I were you, I would diversify by putting my money in various sectors. I would invest globally, not just in the US.  Lastly, if you don't have enough money now to diversify, consider a mutual fund that does. There's plenty to choose from.  Personally, I prefer index funds.
> 
> 
> 
> Yep. There are so many index funds with very diversified holdings and extremely low fees, it is an easy way to get started in investing.
> 
> Despite everyone on the internet bragging they made blah blah money picking stocks, study after study has shown index funds usually beat active pickers.
Click to expand...

Yep. 

I believe there're basically two types of people who make big money in the market, those that are lucky and quit before their luck runs out and those that invest for the long haul and follow proven investment strategies 

People who are new to the market think you play the market.  Nothing could be further from the truth.  Managing investments is not play, it's work and the competition is fierce which helps explain why over 60 million people invest in mutual funds.
  . 
_*The secret to being a stock market guru isn’t to be correct but to make very loud and frequent predictions. As soon as the market moves in your direction you proclaim victory. The key is to make sure that no one ever can precisely nail down your original entry points. – *_James “Rev Shark” De Porre


----------



## candycorn

SteadyMercury said:


> sameech said:
> 
> 
> 
> And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.
> 
> 
> 
> Congrats. You are taking a brief timeframe in one of the strongest bull markets in history to attempt to make a general point about investing vs. debt.
> 
> 
> 
> sameech said:
> 
> 
> 
> The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.
> 
> Click to expand...
> 
> They don't need to have any debt at all, and you're mistaken if you believe holding debt is necessary  for people to escape being dependent on a 9-5 paycheck.
> 
> Paying off debt is like a guaranteed rate of return, most people would kill to get a guaranteed rate of return at the percentage most people's debt is held at.
> 
> Paying interest on a credit card is just poor personal finance skills, don't spend more than you can afford so you pay off your credit cards every month.
Click to expand...


Carrying debt is just dumb with a couple of exceptions.

One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.


----------



## sameech

candycorn said:


> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.



Most people cannot afford to buy a car or a house in cash, so no; and a lot of businesses in my area won't take AMEX because of their terms and the way they operate trying to force retailers to extend terms of sale beyond which they are by holding funds hostage.  A high-end furniture store owner told me that he was losing a fortune because AMEX customers would file disputes on the charges for things the warranties wouldn't cover and he would end up losing the items sold and the funds as it was too expensive to send one his trucks 1,000 miles to pick up the merchandise for returns when they decided they didn't like it afterall.


----------



## candycorn

sameech said:


> candycorn said:
> 
> 
> 
> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.
> 
> 
> 
> 
> Most people cannot afford to buy a car or a house in cash, so no; and a lot of businesses in my area won't take AMEX because of their terms and the way they operate trying to force retailers to extend terms of sale beyond which they are by holding funds hostage.  A high-end furniture store owner told me that he was losing a fortune because AMEX customers would file disputes on the charges for things the warranties wouldn't cover and he would end up losing the items sold and the funds as it was too expensive to send one his trucks 1,000 miles to pick up the merchandise for returns when they decided they didn't like it afterall.
Click to expand...


Those are the other exceptions.  Cars are manageable in many cases; housing usually isn't.

I have seldom had problems using my AMEX.


----------



## sameech

candycorn said:


> sameech said:
> 
> 
> 
> 
> 
> candycorn said:
> 
> 
> 
> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.
> 
> 
> 
> 
> Most people cannot afford to buy a car or a house in cash, so no; and a lot of businesses in my area won't take AMEX because of their terms and the way they operate trying to force retailers to extend terms of sale beyond which they are by holding funds hostage.  A high-end furniture store owner told me that he was losing a fortune because AMEX customers would file disputes on the charges for things the warranties wouldn't cover and he would end up losing the items sold and the funds as it was too expensive to send one his trucks 1,000 miles to pick up the merchandise for returns when they decided they didn't like it afterall.
> 
> Click to expand...
> 
> 
> Those are the other exceptions.  Cars are manageable in many cases; housing usually isn't.
> 
> I have seldom had problems using my AMEX.
Click to expand...


And I have never had a problem using my Visa.  Regardless, there is an opportunity cost for paying off debt that people fail to consider.  If your credit card is charging you less than 7 and you can get 15-20 in the stock market then you are losing money by not carrying the debt and buying the stock.  You can sell at any point to pay off the debt down the road if need be as long as your stocks are outperforming your interest + cap gains rate.


----------



## SteadyMercury

candycorn said:


> Carrying debt is just dumb with a couple of exceptions.


Definitely, I'm not saying all debt is bad there is good debt and bad debt.

Using any credit card (not just AMEX) and paying it off every month is great, you get better consumer protection, rewards, etc. but carrying a balance on a card to where you are actually paying interest is just plain poor financial skills.


----------



## SteadyMercury

sameech said:


> If your credit card is charging you less than 7 and you can get 15-20 in the stock market then you are losing money by not carrying the debt and buying the stock.


The debt is a guaranteed 7% you aren't paying. You stock might get 15%, or it might drop 50%, the addition of risk to the equation completely changes the balance to where it isn't apples to apples just comparing percentages.

I'd love to have an investment vehicle that paid me a guaranteed 7% in today's low interest rate environment.


----------



## Flopper

candycorn said:


> SteadyMercury said:
> 
> 
> 
> 
> 
> sameech said:
> 
> 
> 
> And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.
> 
> 
> 
> Congrats. You are taking a brief timeframe in one of the strongest bull markets in history to attempt to make a general point about investing vs. debt.
> 
> 
> 
> sameech said:
> 
> 
> 
> The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.
> 
> Click to expand...
> 
> They don't need to have any debt at all, and you're mistaken if you believe holding debt is necessary  for people to escape being dependent on a 9-5 paycheck.
> 
> Paying off debt is like a guaranteed rate of return, most people would kill to get a guaranteed rate of return at the percentage most people's debt is held at.
> 
> Paying interest on a credit card is just poor personal finance skills, don't spend more than you can afford so you pay off your credit cards every month.
> 
> Click to expand...
> 
> 
> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.
Click to expand...

I'm not saying anything against AMEX; I've had one of their cards for years but I've had no problem recovering funds when my bank account was breached. 

I was out of town on business for several months and when I returned our apartment had been hit.  We lost computers, some cash, credit cards, and a check book.  The thieves forged several thousand dollars in checks, used the debit card to to clean out the account plus charge about $2,000 to a credit card.  I have no idea how they got the pin number for the debit card.

I disputed the charges with the credit card company (Visa) and they credited my account for the loses in about 24 hours.  The bank, (Chase), refunded every cent I lost but it took a little more time, about a week.  I had to sign a notarized document for every fraudulent check and atm transaction.  It took several hours.

Some people assume that unauthorized transaction mean you loose the money.  That is not true but some financial institution would like you to be believe it is.  By federal law, credit card companies must refund every cent you loose if you report the fraudulent transaction within a few months.  If you report the transaction later, you are subject to a penalty.  I think it's $25.  Banks are regulated by federal and state laws and both address the issue of fraud so there is some variation in policy between states.  However, in all states banks must refund all money's lost unless they can prove that you have acted "fraudulently" or had been "grossly negligent"  It may take a bit of time to get the refund from the bank but you will get it.  I've heard of a case where someone  admitted to the bank that there were a number of people who knew his debit pin number.  The bank referred the case to their fraud investigation unit and the refund was delayed about a month.

I know this is a bit off topic but I thought it might be of some interest.


----------



## sameech

Flopper said:


> candycorn said:
> 
> 
> 
> 
> 
> SteadyMercury said:
> 
> 
> 
> 
> 
> sameech said:
> 
> 
> 
> And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.
> 
> 
> 
> Congrats. You are taking a brief timeframe in one of the strongest bull markets in history to attempt to make a general point about investing vs. debt.
> 
> 
> 
> sameech said:
> 
> 
> 
> The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.
> 
> Click to expand...
> 
> They don't need to have any debt at all, and you're mistaken if you believe holding debt is necessary  for people to escape being dependent on a 9-5 paycheck.
> 
> Paying off debt is like a guaranteed rate of return, most people would kill to get a guaranteed rate of return at the percentage most people's debt is held at.
> 
> Paying interest on a credit card is just poor personal finance skills, don't spend more than you can afford so you pay off your credit cards every month.
> 
> Click to expand...
> 
> 
> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.
> 
> Click to expand...
> 
> I'm not saying anything against AMEX; I've had one of their cards for years but I've had no problem recovering funds when my bank account was breached.
> 
> I was out of town on business for several months and when I returned our apartment had been hit.  We lost computers, some cash, credit cards, and a check book.  The thieves forged several thousand dollars in checks, used the debit card to to clean out the account plus charge about $2,000 to a credit card.  I have no idea how they got the pin number for the debit card.
> 
> I disputed the charges with the credit card company (Visa) and they credited my account for the loses in about 24 hours.  The bank, (Chase), refunded every cent I lost but it took a little more time, about a week.  I had to sign a notarized document for every fraudulent check and atm transaction.  It took several hours.
> 
> Some people assume that unauthorized transaction mean you loose the money.  That is not true but some financial institution would like you to be believe it is.  By federal law, credit card companies must refund every cent you loose if you report the fraudulent transaction within a few months.  If you report the transaction later, you are subject to a penalty.  I think it's $25.  Banks are regulated by federal and state laws and both address the issue of fraud so there is some variation in policy between states.  However, in all states banks must refund all money's lost unless they can prove that you have acted "fraudulently" or had been "grossly negligent"  It may take a bit of time to get the refund from the bank but you will get it.  I've heard of a case where someone  admitted to the bank that there were a number of people who knew his debit pin number.  The bank referred the case to their fraud investigation unit and the refund was delayed about a month.
> 
> I know this is a bit off topic but I thought it might be of some interest.
Click to expand...


Most debit cards are used like a credit card, so you don't need the PIN on some transactions.  I ditched my AMEX within the first year I had it.  They were constantly pushing crap on me.  I have a Visa and a Mastercard and that is good enough.


----------



## Flopper

sameech said:


> Flopper said:
> 
> 
> 
> 
> 
> candycorn said:
> 
> 
> 
> 
> 
> SteadyMercury said:
> 
> 
> 
> 
> 
> sameech said:
> 
> 
> 
> And my MSFT stock has gone up close to 20% since I bought it last year and my JCP is up over 60% in about the same time frame.  No stock in my portfolio is down from when I purchased it and they all are outpacing any interest I am paying on debt.
> 
> 
> 
> Congrats. You are taking a brief timeframe in one of the strongest bull markets in history to attempt to make a general point about investing vs. debt.
> 
> 
> 
> sameech said:
> 
> 
> 
> The point is that if you have a good working strategy, then "oh you must be out of debt first" is crap logic for people to stay dependent on their 9-5 paycheck all their lives--people need to find balance.  If their debt is well-managed, they need to be concurrently investing as well.
> 
> Click to expand...
> 
> They don't need to have any debt at all, and you're mistaken if you believe holding debt is necessary  for people to escape being dependent on a 9-5 paycheck.
> 
> Paying off debt is like a guaranteed rate of return, most people would kill to get a guaranteed rate of return at the percentage most people's debt is held at.
> 
> Paying interest on a credit card is just poor personal finance skills, don't spend more than you can afford so you pay off your credit cards every month.
> 
> Click to expand...
> 
> 
> Carrying debt is just dumb with a couple of exceptions.
> 
> One being that if you use your AMEX card at a retailer and their computers are breached, you're not going to lose any money.  You use your bank-account linked debit card and depending on the breach...your account can be cleaned out.  But AMEX is paid off every month so there is no interest being charged.  Of course if you break out the Visa and try that, you'll end up paying a lot of interest.
> 
> Click to expand...
> 
> I'm not saying anything against AMEX; I've had one of their cards for years but I've had no problem recovering funds when my bank account was breached.
> 
> I was out of town on business for several months and when I returned our apartment had been hit.  We lost computers, some cash, credit cards, and a check book.  The thieves forged several thousand dollars in checks, used the debit card to to clean out the account plus charge about $2,000 to a credit card.  I have no idea how they got the pin number for the debit card.
> 
> I disputed the charges with the credit card company (Visa) and they credited my account for the loses in about 24 hours.  The bank, (Chase), refunded every cent I lost but it took a little more time, about a week.  I had to sign a notarized document for every fraudulent check and atm transaction.  It took several hours.
> 
> Some people assume that unauthorized transaction mean you loose the money.  That is not true but some financial institution would like you to be believe it is.  By federal law, credit card companies must refund every cent you loose if you report the fraudulent transaction within a few months.  If you report the transaction later, you are subject to a penalty.  I think it's $25.  Banks are regulated by federal and state laws and both address the issue of fraud so there is some variation in policy between states.  However, in all states banks must refund all money's lost unless they can prove that you have acted "fraudulently" or had been "grossly negligent"  It may take a bit of time to get the refund from the bank but you will get it.  I've heard of a case where someone  admitted to the bank that there were a number of people who knew his debit pin number.  The bank referred the case to their fraud investigation unit and the refund was delayed about a month.
> 
> I know this is a bit off topic but I thought it might be of some interest.
> 
> Click to expand...
> 
> 
> Most debit cards are used like a credit card, so you don't need the PIN on some transactions.  I ditched my AMEX within the first year I had it.  They were constantly pushing crap on me.  I have a Visa and a Mastercard and that is good enough.
Click to expand...

You may use a debit card like it's a credit card, but it's not because you're spending your own money and it's usually debited from your account with a few hours.  Credit cards are an instrument for borrowing money.  Debit cards are instrument for withdrawal money from your account.


----------



## william the wie

SteadyMercury said:


> sameech said:
> 
> 
> 
> If your credit card is charging you less than 7 and you can get 15-20 in the stock market then you are losing money by not carrying the debt and buying the stock.
> 
> 
> 
> The debt is a guaranteed 7% you aren't paying. You stock might get 15%, or it might drop 50%, the addition of risk to the equation completely changes the balance to where it isn't apples to apples just comparing percentages.
> 
> I'd love to have an investment vehicle that paid me a guaranteed 7% in today's low interest rate environment.
Click to expand...

I agree with the first paragraph but as to the second who is the guarantor? IL, NJ, MA and CA  issue guarantees and pay mind blowing interest rates but I wouldn't buy their bonds.


----------



## SteadyMercury

william the wie said:


> I agree with the first paragraph but as to the second who is the guarantor?.


It is hypothetical based on the absence of debt payment.

If I have $1,000 in debt at a 7% interest rate versus not having $1,000 in debt at a 7% interest rate. At the end of the day the latter scenario guarantees me 7% advantage on that $1,000.

Of course it is entirely possible I carried the debt and used the principal to invest and make 20% to come out ahead by 13%, but then you're talking taking on risk that you don't beat the 7%.


----------



## Flopper

SteadyMercury said:


> william the wie said:
> 
> 
> 
> I agree with the first paragraph but as to the second who is the guarantor?.
> 
> 
> 
> It is hypothetical based on the absence of debt payment.
> 
> If I have $1,000 in debt at a 7% interest rate versus not having $1,000 in debt at a 7% interest rate. At the end of the day the latter scenario guarantees me 7% advantage on that $1,000.
> 
> Of course it is entirely possible I carried the debt and used the principal to invest and make 20% to come out ahead by 13%, but then you're talking taking on risk that you don't beat the 7%.
Click to expand...

The evaluation of risk versus reward is what makes the difference between an average and exceptional returns.  Most people can't do it and that's why most people shouldn't invest with borrowed money.  If I want to increase my risk, I can do so by changing the composition of my portfolio and bypassing interest costs.


----------



## SteadyMercury

Agree 100%. My risk is completely managed by asset allocation, control what I can control and sacrifice chicken during full moon for the rest.


----------



## william the wie

SteadyMercury said:


> Agree 100%. My risk is completely managed by asset allocation, control what I can control and sacrifice chicken during full moon for the rest.


Try using the Fibonacci series instead of animal sacrifice, Still somewhat hinky but it does have at least marginal back tested validity.


----------



## SteadyMercury

Pshh my stock picking parties are way more fun


----------



## william the wie

Are you also an advocate of positive drinking/thinking?


----------



## Wake

On the more health-conscious side of investments, I'm planning to start biking to work in the warm months, to cut down on gas costs while strengthening my ticker and overall health. Every day for the next month or so I've been driving at least 15 minutes there and back for two 2-hour shifts during the morning and evening. My poor car is taking a beating with all the driving, and even though gas prices are falling a bit I don't want to afford a $3,000 engine. Seriously.

In the middle of October it's a bit too dangerous to go biking at 5AM in the morning in SW WI. I reckon it'd take about 30 minutes of bicycling to get to my client's home, but if I leave early-enough I can make it in time. I could really use the extra exercise, and it'd be cheaper than going to the gym. Getting struck by a truck in the frosty morn is going to require some risk management. If I can set it up just right this could be an excellent investment that'll pay dividends for years to come. I'd need a reflective vest, a poncho, and long-underwear for cold mornings and evenings, too.

I'm doing practice runs during the warm afternoon, and will start this routine more seriously once the Spring frost has ended.

On the financial end, I'm looking into buying some REIT preferred stocks that pay 10-13%+ dividends. I figure that sector must be relatively safe. Shying away from investing in fast food corporations like McDonald's or breakfast cereals, too. Maybe it'd be wise to invest in the health care sector, since the population keeps growing and those jobs can't be shipped out-of-country? Hm, maybe medical research and technology would be a good option, too...


----------



## Flopper

Wake said:


> On the more health-conscious side of investments, I'm planning to start biking to work in the warm months, to cut down on gas costs while strengthening my ticker and overall health. Every day for the next month or so I've been driving at least 15 minutes there and back for two 2-hour shifts during the morning and evening. My poor car is taking a beating with all the driving, and even though gas prices are falling a bit I don't want to afford a $3,000 engine. Seriously.
> 
> In the middle of October it's a bit too dangerous to go biking at 5AM in the morning in SW WI. I reckon it'd take about 30 minutes of bicycling to get to my client's home, but if I leave early-enough I can make it in time. I could really use the extra exercise, and it'd be cheaper than going to the gym. Getting struck by a truck in the frosty morn is going to require some risk management. If I can set it up just right this could be an excellent investment that'll pay dividends for years to come. I'd need a reflective vest, a poncho, and long-underwear for cold mornings and evenings, too.
> 
> I'm doing practice runs during the warm afternoon, and will start this routine more seriously once the Spring frost has ended.
> 
> On the financial end, I'm looking into buying some REIT preferred stocks that pay 10-13%+ dividends. I figure that sector must be relatively safe. Shying away from investing in fast food corporations like McDonald's or breakfast cereals, too. Maybe it'd be wise to invest in the health care sector, since the population keeps growing and those jobs can't be shipped out-of-country? Hm, maybe medical research and technology would be a good option, too...


Keep in mind that considerable risk go along with a 13% dividend.  REITs are all sensitive to interest rate movements, some more than others.  REITs are a good way to diversify, however considering our very low interest rate environment and the fact that we are in the 5th year of a bull market, I would dollar cost average or only buy on weakness.


----------



## Wake

I'm ignorant of what dollar cost averaging is...

There's a lot I don't know about the stock market.


----------



## percysunshine

Wake said:


> I'm ignorant of what dollar cost averaging is...
> 
> There's a lot I don't know about the stock market.



Dollar cost averaging is fairly straight forward. You purchase a fixed dollar amount of a stock on a regular basis. When the stock price is high, you are buying fewer expensive shares, and when the price is low, you are buying more cheaper shares. Your cost per share is lower without having to play market timing games. If an investor thinks they know what the price of a stock is going to be in the future, there are more profitable strategies, but the investor has to be able to predict the price ahead of time.


----------



## Wake

Oh, duh.

So if I wait to buy ADK.PR.A until it goes from $28 to $23, and buy them when they're at a low point (and expecting them to return to the $28 value or more), that would be dollar cost averaging? I've been thinking of using a limit order that'll automatically buy the stock I want should it unexpectedly dip down into a convenient price range.


----------



## percysunshine

Wake said:


> Oh, duh.
> 
> So if I wait to buy ADK.PR.A until it goes from $28 to $23, and buy them when they're at a low point (and expecting them to return to the $28 value or more), that would be dollar cost averaging? I've been thinking of using a limit order that'll automatically buy the stock I want should it unexpectedly dip down into a convenient price range.



That would be market timing. Dollar cost averaging ignores price and and has a fixed time period. Say you buy $1000 of ADK.PR.A every Friday at noon. Over a year, that will minimize the average cost per share because you will buy fewer shares at $28, and more shares at $23. If you take the position that you know ADK.PR.A will go up from $23 to $28, then obviously you should buy more shares at $23, not a fixed dollar amount of shares.

Limits and stops are good investment discipline. Just remember that the market traders and electronic trade programs can see those orders and can take advantage of them in a thinly traded stock or for big orders.


----------



## Flopper

Wake said:


> I'm ignorant of what dollar cost averaging is...
> 
> There's a lot I don't know about the stock market.


Percysunshine described it quite well.  For most investors, who can't determine when to buy and when to sell, dollar cost averaging is a great tool.  You still have to determine what to invest in and how to allocate your money. 

I have never been able to time the market and don't think many people can.  Most investors are ruled by greed and fear.  They tend to buy when the market is being touted by Wall Street gurus and the market is setting records which usually means it's due for a fall.  They sell when the market is falling and there're afraid of loosing their investment.  In other words, many investors make decisions based on emotions which is the worst possible way to invest.  Dollar cost average takes the emotions out of the decisions.


----------



## Zander

Want to become an investor? Go here......Bogleheads

Read it, apply it, benefit. 

Trading is for gamblers, dummies,  and people that already have lots of money. 26 year old people need to stay fully invested at all times.


----------



## Wake

I'm grateful for the help. At 26, I want to keep funneling money into wise investment, and start up a 401K or and IRA. Not sure which one it is that you can start right away that compounds by 6% biannually. Whichever one it is, I've got at least $1500 right now to put in it and let sit for 40 years. Problem is if something catastrophic happens while the money's locked up. Yikes.


----------



## Flopper

Wake said:


> I'm grateful for the help. At 26, I want to keep funneling money into wise investment, and start up a 401K or and IRA. Not sure which one it is that you can start right away that compounds by 6% biannually. Whichever one it is, I've got at least $1500 right now to put in it and let sit for 40 years. Problem is if something catastrophic happens while the money's locked up. Yikes.


Follow the investment advice of the professionals.  Set aside enough money to cover emergencies then fully fund your 401K.  The chances are pretty remote that you will be able to beat the tax advantage of a 401K, employer contributions, and professional management.  If you still have funds available, then considering investing outside of your 401K.


----------



## HenryBHough

Once upon a time, in states like California, "double tax frees" were a good investment.  Those are state or municipal bonds, the interest on which is exempt from both state and federal income taxes.

But not now.  Risk of default that used to be a minor potential downside has now become "certainty of default".

I still chortle over a 20-year mortgage loan I made to an allegedly smart person when interest rates were considered good if they were just 21%.  He could have paid it off by refinancing about 3 years later but never did.  Just kept paying and paying and paying.  I still have some spare bucks I'd lend out at 21% should anyone be interested and have good collateral.


----------



## Manonthestreet

Zander said:


> Want to become an investor? Go here......Bogleheads
> 
> Read it, apply it, benefit.
> 
> Trading is for gamblers, dummies,  and people that already have lots of money. 26 year old people need to stay fully invested at all times.


even during crashes???  Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.


----------



## Zander

Manonthestreet said:


> Zander said:
> 
> 
> 
> Want to become an investor? Go here......Bogleheads
> 
> Read it, apply it, benefit.
> 
> Trading is for gamblers, dummies,  and people that already have lots of money. 26 year old people need to stay fully invested at all times.
> 
> 
> 
> even during crashes???  Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.
Click to expand...


Good luck. are you 26? 


Sent from my iPhone using Tapatalk


----------



## Wake

I was thinking that chaos breeds opportunity, and that I should wait with buying stocks until just before the market starts to recover from a serious crash. Is this a wise strategy?


----------



## Manonthestreet

Can be.......I'm not much investor but have done OK. Buy a subscription to Investors business Daily.  Rules for selling, Rules on buying and chart reading tips chart reading tips...patterns and their meanings.   Basic stuff but it can make or save you lot of trouble.


----------



## Manonthestreet

Zander said:


> Manonthestreet said:
> 
> 
> 
> 
> 
> Zander said:
> 
> 
> 
> Want to become an investor? Go here......Bogleheads
> 
> Read it, apply it, benefit.
> 
> Trading is for gamblers, dummies,  and people that already have lots of money. 26 year old people need to stay fully invested at all times.
> 
> 
> 
> even during crashes???  Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.
> 
> Click to expand...
> 
> 
> Good luck. are you 26?
> 
> 
> Sent from my iPhone using Tapatalk
Click to expand...

Doesnt matter what age you are ,  watching your capital needlessly  dissipate is bad idea.


----------



## Manonthestreet




----------



## Flopper

HenryBHough said:


> Once upon a time, in states like California, "double tax frees" were a good investment.  Those are state or municipal bonds, the interest on which is exempt from both state and federal income taxes.
> 
> But not now.  Risk of default that used to be a minor potential downside has now become "certainty of default".
> 
> I still chortle over a 20-year mortgage loan I made to an allegedly smart person when interest rates were considered good if they were just 21%.  He could have paid it off by refinancing about 3 years later but never did.  Just kept paying and paying and paying.  I still have some spare bucks I'd lend out at 21% should anyone be interested and have good collateral.


Moody's did a study of Muni defaults over the past 40 years. They found the rate of default was .01%.  Over the past 5 years the default rate has risen to .03%, 3 bonds in every10,000 defaulted. Most all AAA and many AA bonds are now insured by MBIA, AMBAC, or FGIC.  If you buy investment grade munis, the only thing safer are treasuries.

Moody s Municipal bond defaults remain low in number but new trends are emerging


----------



## Zander

Manonthestreet said:


> Zander said:
> 
> 
> 
> 
> 
> Manonthestreet said:
> 
> 
> 
> 
> 
> Zander said:
> 
> 
> 
> Want to become an investor? Go here......Bogleheads
> 
> Read it, apply it, benefit.
> 
> Trading is for gamblers, dummies,  and people that already have lots of money. 26 year old people need to stay fully invested at all times.
> 
> 
> 
> even during crashes???  Not......part of the game is avoiding unnecessary losses.......in down market doesnt matter how good you are 75% of stocks will take a loss....ery bad odds. ..make a profit lock it in and move on. Bailed on my COV this week, was trying to hold on until FEB to qual as long term instead of short term for taxes.........saw the several hundred up and down in same week and took brokers advice and hit the door running.
> 
> Click to expand...
> 
> 
> Good luck. are you 26?
> 
> 
> Sent from my iPhone using Tapatalk
> 
> Click to expand...
> 
> Doesnt matter what age you are ,  watching your capital needlessly  dissipate is bad idea.
Click to expand...

Long term - Buy and hold outperforms. 

But it's your money. Do what you think is best. 


Sent from my iPhone using Tapatalk


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## Manonthestreet

Keep telling yourself that when you take a 50% haircut while I did not


----------



## Flopper

Wake said:


> I was thinking that chaos breeds opportunity, and that I should wait with buying stocks until just before the market starts to recover from a serious crash. Is this a wise strategy?


What you're talking about is identifying the bottom. Take a look at 2007. In Oct, the Dow peaked at 13,270.  Within 3 months it fell over 1,000 points.  Then there were several short lived recovered and it fell 1,000 by June.  Then there was another recovery. In the following 6 months, the Dow fell over 4,000 points. Many retirement plans had lost half their value. Investment advisers that were predicting a rosy future just a year ago were telling their clients to prepare for further loses. And suddenly the market bottomed and rose 4,000 points in 2 months.  The financial news was terrible at this time.  Walls Street firms were going under.  The auto industry was on the verge of collapse.  The largest financial institutions were losing money hand over fist.  Many were predicting the government would collapse.  Stock market gurus were warning their followers that this could be bear trap and they should wait  

The other point to consider is suppose you miss that point just before the market starts to recovery.  Then what?  Most people in this situation wait for market to fall again so they can take advantage of the low prices.  If you did then you would still be waiting and you would have missed a 60% rise in the market.  Buy low and sell high only works if you have a crystal ball.


----------



## Zander

Manonthestreet said:


> Keep telling yourself that when you take a 50% haircut while I did not



Good luck. 

I weathered 2008 just fine. I have a very conservative asset allocation.  I'd love to see the market fall another 50%.  It'd make a great buying opportunity. I have lots of dry powder...... 


Sent from my iPhone using Tapatalk


----------



## Flopper

Zander said:


> Manonthestreet said:
> 
> 
> 
> Keep telling yourself that when you take a 50% haircut while I did not
> 
> 
> 
> 
> Good luck.
> 
> I weathered 2008 just fine. I have a very conservative asset allocation.  I'd love to see the market fall another 50%.  It'd make a great buying opportunity. I have lots of dry powder......
> 
> 
> Sent from my iPhone using Tapatalk
Click to expand...

The Dow's down about 800 points from it's peak last month.  If it breaks below it's bottom made the end of last year, I'll start moving moving more cash into the equity market.  I don't think the markets ripe for a major fall just a good correction.


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## william the wie

You might want to define those terms for Wake Flopper.


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## HenryBHough

I won't put another penny in until The Dow is below 9,500.


----------



## Flopper

HenryBHough said:


> I won't put another penny in until The Dow is below 9,500.


Why 9500?


----------



## HenryBHough

Flopper said:


> HenryBHough said:
> 
> 
> 
> I won't put another penny in until The Dow is below 9,500.
> 
> 
> 
> Why 9500?
Click to expand...


Because I believe once it has dropped to 9500 there will be brief downward excursions but recovery to that point will be a sort of new norm for a period of time.  How long depends on the policies of who/whatever takes over government in 2016.  If it's Democrat then November, 2016 as soon as 9500 (or anything suddenly higher) pops up it'll be time to jump out as the new bottom will be below 7500.  If it's Republican (with strong house/senate majorities) then it'll still be a buying opportunity in anticipation of a long, moderately paced climb back to 17000 or beyond. 

Between now and then a 9500 Dow will represent a good "parking space" for money since banks are paying peanuts and there aren't many suckers around willing to borrow at high enough interest rates.


----------



## Manonthestreet

Stumbled into a buyout. Stock had alrdy appreciated up to the premium. State and Feds working against it plus a lawsuit from the shareholders didn't see any reason to stick around with  volatility increasing.


----------



## Manonthestreet

Flopper said:


> HenryBHough said:
> 
> 
> 
> Once upon a time, in states like California, "double tax frees" were a good investment.  Those are state or municipal bonds, the interest on which is exempt from both state and federal income taxes.
> 
> But not now.  Risk of default that used to be a minor potential downside has now become "certainty of default".
> 
> I still chortle over a 20-year mortgage loan I made to an allegedly smart person when interest rates were considered good if they were just 21%.  He could have paid it off by refinancing about 3 years later but never did.  Just kept paying and paying and paying.  I still have some spare bucks I'd lend out at 21% should anyone be interested and have good collateral.
> 
> 
> 
> Moody's did a study of Muni defaults over the past 40 years. They found the rate of default was .01%.  Over the past 5 years the default rate has risen to .03%, 3 bonds in every10,000 defaulted. Most all AAA and many AA bonds are now insured by MBIA, AMBAC, or FGIC.  If you buy investment grade munis, the only thing safer are treasuries.
> 
> Moody s Municipal bond defaults remain low in number but new trends are emerging
Click to expand...

COV was being bought by Medtronic Stock had appreciated to the premium and with both the State and Feds trying to derail it plus a stockholder lawsuit didn't see any reason to stick around with market volatility increasing.


----------



## Zander

Wake

I have witnessed massive fortunes being made and lost in the financial markets. The primary lesson I learned was- Investing is not speculating and vice versa.   If you want to get rich quick- go to Vegas or trade stocks and commodities. You'll probably end up broke, but you will have a shot. If you're a gambler take 2-5% of your portfolio and try your hand at market timing, options, or inverse funds/etf's. It can work out. Usually it doesn't.

If you want to become wealthy in a systematic and progressive way, invest in the stock market- but buy the whole shebang. Buy a diversified index fund (or ETF) that captures the entire market (vanguard total stock market or similar)  Then regularly add to it. Hold your approximate age in a diversified bond fund like Vanguards total bond market fund. Rebalance once a year or after large swings. So if you are 40 years old - hold 60% stocks and 40% bonds. (this is an oversimplification for illustration purposes). You can adjust these percentages as you see fit, but the younger you are the more equities you should own.  I have always been conservative and held a 60/40 portfolio for most of my life. I made a lot of money from boring old bonds......lol.

I do think we are going to see a correction or even a stock market crash- probably sooner than later. But I don't care!!  I've already increased my allocation to fixed income and lowered my exposure to equities. That is what you do after making 30% the year before  - you sell HIGH by rebalancing.  I am holding a lot of cash too (cash is an asset class that does quite well in deflationary times) . If the market does fall precipitously, I will simply rebalance my portfolio and increase my exposure to equities.

Bottom line - nobody knows what is going to happen. At age 26 you have time on your side.


----------



## Flopper

HenryBHough said:


> Flopper said:
> 
> 
> 
> 
> 
> HenryBHough said:
> 
> 
> 
> I won't put another penny in until The Dow is below 9,500.
> 
> 
> 
> Why 9500?
> 
> Click to expand...
> 
> 
> Because I believe once it has dropped to 9500 there will be brief downward excursions but recovery to that point will be a sort of new norm for a period of time.  How long depends on the policies of who/whatever takes over government in 2016.  If it's Democrat then November, 2016 as soon as 9500 (or anything suddenly higher) pops up it'll be time to jump out as the new bottom will be below 7500.  If it's Republican (with strong house/senate majorities) then it'll still be a buying opportunity in anticipation of a long, moderately paced climb back to 17000 or beyond.
> 
> Between now and then a 9500 Dow will represent a good "parking space" for money since banks are paying peanuts and there aren't many suckers around willing to borrow at high enough interest rates.
Click to expand...

Then you must be looking for a deep recession because the P/E ratio of the market at that level would be the lowest it's been in 15 years.  Wall Street analyst don't share your  opinion.  They are looking for continued earnings increases in 2015.


----------



## Flopper

Zander said:


> Wake
> 
> I have witnessed massive fortunes being made and lost in the financial markets. The primary lesson I learned was- Investing is not speculating and vice versa.   If you want to get rich quick- go to Vegas or trade stocks and commodities. You'll probably end up broke, but you will have a shot. If you're a gambler take 2-5% of your portfolio and try your hand at market timing, options, or inverse funds/etf's. It can work out. Usually it doesn't.
> 
> If you want to become wealthy in a systematic and progressive way, invest in the stock market- but buy the whole shebang. Buy a diversified index fund (or ETF) that captures the entire market (vanguard total stock market or similar)  Then regularly add to it. Hold your approximate age in a diversified bond fund like Vanguards total bond market fund. Rebalance once a year or after large swings. So if you are 40 years old - hold 60% stocks and 40% bonds. (this is an oversimplification for illustration purposes). You can adjust these percentages as you see fit, but the younger you are the more equities you should own.  I have always been conservative and held a 60/40 portfolio for most of my life. I made a lot of money from boring old bonds......lol.
> 
> I do think we are going to see a correction or even a stock market crash- probably sooner than later. But I don't care!!  I've already increased my allocation to fixed income and lowered my exposure to equities. That is what you do after making 30% the year before  - you sell HIGH by rebalancing.  I am holding a lot of cash too (cash is an asset class that does quite well in deflationary times) . If the market does fall precipitously, I will simply rebalance my portfolio and increase my exposure to equities.
> 
> Bottom line - nobody knows what is going to happen. At age 26 you have time on your side.


Good advice.


Zander said:


> Wake
> 
> I have witnessed massive fortunes being made and lost in the financial markets. The primary lesson I learned was- Investing is not speculating and vice versa.   If you want to get rich quick- go to Vegas or trade stocks and commodities. You'll probably end up broke, but you will have a shot. If you're a gambler take 2-5% of your portfolio and try your hand at market timing, options, or inverse funds/etf's. It can work out. Usually it doesn't.
> 
> If you want to become wealthy in a systematic and progressive way, invest in the stock market- but buy the whole shebang. Buy a diversified index fund (or ETF) that captures the entire market (vanguard total stock market or similar)  Then regularly add to it. Hold your approximate age in a diversified bond fund like Vanguards total bond market fund. Rebalance once a year or after large swings. So if you are 40 years old - hold 60% stocks and 40% bonds. (this is an oversimplification for illustration purposes). You can adjust these percentages as you see fit, but the younger you are the more equities you should own.  I have always been conservative and held a 60/40 portfolio for most of my life. I made a lot of money from boring old bonds......lol.
> 
> I do think we are going to see a correction or even a stock market crash- probably sooner than later. But I don't care!!  I've already increased my allocation to fixed income and lowered my exposure to equities. That is what you do after making 30% the year before  - you sell HIGH by rebalancing.  I am holding a lot of cash too (cash is an asset class that does quite well in deflationary times) . If the market does fall precipitously, I will simply rebalance my portfolio and increase my exposure to equities.
> 
> Bottom line - nobody knows what is going to happen. At age 26 you have time on your side.


Good advice.


----------



## HenryBHough

Flopper said:


> Then you must be looking for a deep recession because the P/E ratio of the market at that level would be the lowest it's been in 15 years.  Wall Street analyst don't share your  opinion.  They are looking for continued earnings increases in 2015.



For the downside to happen America would need to elect either Hillary or Fauxahontas but in that circumstances, yes, a deep recession would be too mild a term.  There's a sort of mathematical risk, though.  By that I mean a currency devaluation could turn a 7500 market into a considerably higher one reasonably quickly though the new figure would still be worth less in real purchasing power than what we're seeing in recent months.


----------



## Manonthestreet

Zander said:


> Manonthestreet said:
> 
> 
> 
> Keep telling yourself that when you take a 50% haircut while I did not
> 
> 
> 
> 
> Good luck.
> 
> I weathered 2008 just fine. I have a very conservative asset allocation.  I'd love to see the market fall another 50%.  It'd make a great buying opportunity. I have lots of dry powder......
> 
> 
> Sent from my iPhone using Tapatalk
Click to expand...

Then your urging of someone else into this market strikes me as strange.


----------



## Zander

Manonthestreet said:


> Zander said:
> 
> 
> 
> 
> 
> Manonthestreet said:
> 
> 
> 
> Keep telling yourself that when you take a 50% haircut while I did not
> 
> 
> 
> 
> Good luck.
> 
> I weathered 2008 just fine. I have a very conservative asset allocation.  I'd love to see the market fall another 50%.  It'd make a great buying opportunity. I have lots of dry powder......
> 
> 
> Sent from my iPhone using Tapatalk
> 
> Click to expand...
> 
> Then your urging of someone else into this market strikes me as strange.
Click to expand...


I'm urging a 26 year old to start a regular and systematic investment program. There is nothing wrong with that advice.  If the market crashes he'll be getting more shares for the same investment. That is smart. 

But like I said earlier, it's your money do whatever you want with it.  I have no axe to grind. Good luck!


----------



## Flopper

HenryBHough said:


> Flopper said:
> 
> 
> 
> Then you must be looking for a deep recession because the P/E ratio of the market at that level would be the lowest it's been in 15 years.  Wall Street analyst don't share your  opinion.  They are looking for continued earnings increases in 2015.
> 
> 
> 
> 
> For the downside to happen America would need to elect either Hillary or Fauxahontas but in that circumstances, yes, a deep recession would be too mild a term.  There's a sort of mathematical risk, though.  By that I mean a currency devaluation could turn a 7500 market into a considerably higher one reasonably quickly though the new figure would still be worth less in real purchasing power than what we're seeing in recent months.
Click to expand...

The market has recover 125% during the Obama administration and I suspect Hilary's policies would not be that different from Obama. 

Government is approximately 1/3 of our economy.  You can not make any sizable cut in government spending without negatively effecting the economy and the market.  If the Tea Party should get control of government, I would certainly be inclined to change my portfolio allocation to include less equities and more bonds.


----------



## Manonthestreet

Point was I see no difference between your current market position and mine....you claim to be sitting on wad of cash and mock me for taking a profit with increasing volatility..............pushing someone into the market just to be in the market................ thats a hack brokers line...........


----------



## Zander

Manonthestreet said:


> Point was I see no difference between your current market position and mine....you claim to be sitting on wad of cash and mock me for taking a profit with increasing volatility..............pushing someone into the market just to be in the market................ thats a hack brokers line...........



You do know that we are talking about a 26 year old who is just starting out? 

Also, I suggested index mutual funds from vanguard- what is "hack broker" about that?


----------



## Flopper

Zander said:


> Manonthestreet said:
> 
> 
> 
> Point was I see no difference between your current market position and mine....you claim to be sitting on wad of cash and mock me for taking a profit with increasing volatility..............pushing someone into the market just to be in the market................ thats a hack brokers line...........
> 
> 
> 
> 
> You do know that we are talking about a 26 year old who is just starting out?
> 
> Also, I suggested index mutual funds from vanguard- what is "hack broker" about that?
Click to expand...

If he's starting a systematic investment program it makes little difference whether he starts at a market top or bottom as long he's in it for the long haul.


----------



## Manonthestreet

Never found mutual funds to be worth a damn.......... every broker I ever tried before doing it on my own all had their pet mutual fund...........not once did I ever make any money.  It is just as important for him to shelter his money during a storm as you are doing. and if the light is flashing red hit the doors.....


----------



## Flopper

Manonthestreet said:


> Never found mutual funds to be worth a damn.......... every broker I ever tried before doing it on my own all had their pet mutual fund...........not once did I ever make any money.  It is just as important for him to shelter his money during a storm as you are doing. and if the light is flashing red hit the doors.....


The problem with your theory is that by the time most people realize the storm is upon them the market has already tanked and by the time they realize the storm is over the market has recovered. 

"I can't recall ever once having seen the name of a market timer on _Forbes_' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it." - Peter Lynch


----------



## Manonthestreet

Thats because they depend on their broker,


----------



## william the wie

HenryBHough said:


> Flopper said:
> 
> 
> 
> 
> 
> HenryBHough said:
> 
> 
> 
> I won't put another penny in until The Dow is below 9,500.
> 
> 
> 
> Why 9500?
> 
> Click to expand...
> 
> 
> Because I believe once it has dropped to 9500 there will be brief downward excursions but recovery to that point will be a sort of new norm for a period of time.  How long depends on the policies of who/whatever takes over government in 2016.  If it's Democrat then November, 2016 as soon as 9500 (or anything suddenly higher) pops up it'll be time to jump out as the new bottom will be below 7500.  If it's Republican (with strong house/senate majorities) then it'll still be a buying opportunity in anticipation of a long, moderately paced climb back to 17000 or beyond.
> 
> Between now and then a 9500 Dow will represent a good "parking space" for money since banks are paying peanuts and there aren't many suckers around willing to borrow at high enough interest rates.
Click to expand...

9500 in real dollars maybe. But if you look at FOREX and the business reports out of China you are looking at a pretty solid floor around 13000. This is still Jimmy Carter's third term.


----------



## william the wie

Me, I go for low volatility ETFs with covered options. I've had the same stocks in my portfolio multiple times. I have a  Leap put on xsp in case there is a big crash but otherwise I just reinvest premiums and dividends.


----------



## Flopper

william the wie said:


> Me, I go for low volatility ETFs with covered options. I've had the same stocks in my portfolio multiple times. I have a  Leap put on xsp in case there is a big crash but otherwise I just reinvest premiums and dividends.


Different strokes for different folks.  There are many ways to make money in the market if you know what you're doing.


----------



## Manonthestreet

BOOOOMM.......TA DA!!!!!   Market down so far I might be able to double dip on this buyout.  Just made a grand on expectations of it market keeps going down could make even more on actual merger.


----------



## Zander

Manonthestreet said:


> BOOOOMM.......TA DA!!!!!   Market down so far I might be able to double dip on this buyout.  Just made a grand on expectations of it market keeps going down could make even more on actual merger.


A grand ? Is that a significant amount of money for you?  


Sent from my iPhone using Tapatalk


----------



## Manonthestreet

Not my biggest gain but  on an 8 month $3600 play with a possible encore on what was a large cap dividend play I'll take it.


----------



## Flopper

Manonthestreet said:


> Not my biggest gain but  on an 8 month $3600 play with a possible encore on what was a large cap dividend play I'll take it.


You use the word play.  As in a game??


----------



## Manonthestreet

and the next question behind that one?


----------



## william the wie

Zander said:


> Manonthestreet said:
> 
> 
> 
> BOOOOMM.......TA DA!!!!!   Market down so far I might be able to double dip on this buyout.  Just made a grand on expectations of it market keeps going down could make even more on actual merger.
> 
> 
> 
> A grand ? Is that a significant amount of money for you?
> 
> 
> Sent from my iPhone using Tapatalk
Click to expand...


Correct me if I'm wrong but I though it took a minimum of 50,000 to do arbitrage on a merger and given all the things that can go wrong on the way to the altar a 2% or less target strikes me as suicidal. Am I missing something?


----------



## Manonthestreet

Only trading one of them


----------



## william the wie

Flopper said:


> Manonthestreet said:
> 
> 
> 
> Not my biggest gain but  on an 8 month $3600 play with a possible encore on what was a large cap dividend play I'll take it.
> 
> 
> 
> You use the word play.  As in a game??
Click to expand...

 As in he does not mention his losing plays? Like my selling ARGT puts back in August when the Fed started hinting that the discount window would be wide open to 2016 or whenever. That play lost me money in the same way an insurance premium is a dead loss until you have an insurance claim.


----------



## Manonthestreet

How many do...everybody has em.......


----------



## clarkson

I'm not much investor but have done OK. Buy a subscription to Investors business Daily. Rules for selling, Rules on buying and chart reading tips chart reading tips...patterns and their meanings. Basic stuff but it can make or save you lot of trouble.


----------



## Flopper

william the wie said:


> Flopper said:
> 
> 
> 
> 
> 
> Manonthestreet said:
> 
> 
> 
> Not my biggest gain but  on an 8 month $3600 play with a possible encore on what was a large cap dividend play I'll take it.
> 
> 
> 
> You use the word play.  As in a game??
> 
> Click to expand...
> 
> As in he does not mention his losing plays? Like my selling ARGT puts back in August when the Fed started hinting that the discount window would be wide open to 2016 or whenever. That play lost me money in the same way an insurance premium is a dead loss until you have an insurance claim.
Click to expand...

I've found that most people that use the word "play" in reference to market transactions are gambling or speculating, not investing. There is nothing wrong with that as long as they understand their risks.  Unfortunately, people that are new to market have a problem understanding degrees of risk.


----------

