Historically time and time again Dividend Stocks have provided investors with bigger over all gains than Non-Dividend individual stocks.
Is this true? Well yes it is if you are a long term investor that is going to buy such an individual and sit on it in your portfolio for years. However, people that invest like me who are more interested in the short term than the long term, this may not be true.
What is the big difference between a short term and long term investor? The biggest difference if that you purchase a stock for the long term that pays out good dividends that you reinvest over the course of years and years. You hit difference price points as the stock goes up or as it declines. Thus adding more and more shares to your initial holding. You may also be adding money and buying more of this stock you chose on a systematic basis like one a month to hit different price points and build on the number of shares you own. With a short term investor such as myself (not day traders), dividends are of little benefit or consequence. They are making strategic moves in the market for short term gains and benefits. Short term investors study market trends, look for under valued stocks, and opportunities for short term gains usually 10 to 30 percent. Sell and take their profits and look for the next opportunity or two to reinvest their money. In the past 4 months alone I am up over 12% in my individual short term portfolio holdings.
So to break this down in a little more basic terms as to where Dividend Stocks are better than Non-Dividend stocks it really depends on what kind of investor you are and the length of time you are going to hold that stock in your portfolio. Long Term, good paying dividend stocks with some growth potential. Short Term, it really does not matter. Your looking for a quick growth cycle, take your money and run to the next opportunity.
Also remember, you should be very knowledgeable about the stock market, have done your research on a stock and be willing to invest money that you could possibly lose without placing yourself into a financial whole you cannot dig out of. For the new investor in Individual Stocks I suggest looking for a Stock Investor Group in your city or area. They are a great way to get your feet wet and learn more about Individual Stock investing.
Gus S.
Disclaimer:
Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Monday, December 23, 2013
Where does the Stock Market go now?
This past week we have seen some changes in the markets due to the looming announcements by the Fed regarding how much they were going to cut the stimulus package of buying bonds to help in the support of the stock market and to keep interest rates down. After their announcement we found out they were not going to make as big of cuts as expected. After being in a flat pattern much of the week, after the announcement the markets began to rise again and the Dow hitting another record high.
Today there was more good news for the market as consumer spending for the month of November 2013 was up 0.5% causing the market to open on a high note. The market is being supported in part due to your Internet Stocks such as Facebook, Twitter, LinkedIn, etc.. My opinion remains that some such Internet Stocks are way over valued and playing off their names and investors fantasy's. Twitter remains operating in the red. A company that losses money instead of makes money with a stock price it is showing in my opinion is a recipe for a disaster. If you absolutely must have an internet stock in your portfolio Facebook is the better bet. At least they operate in the black and have a genius for an owner of the company that knows how to make money.
As I sit back and reflect on the current market and our economy of the past where do I think the current market will go? The simple answer is UP. I see this continued rise through the spring of the year and into the summer of 2014. Yes, as the Federal Reserves continues to cut back on the stimulus package interest rates will rise slowly, which really is not a bad thing. Remember back the way it use to be in the 70's, 80's and 90's. Interest rates were anywhere from 6 to 10 percent on a mortgage rate when buying a new house. Interest rates when buying a car were about the same, perhaps slightly less. Interest rates were a product of competition by the lenders as to who gave the best rates, not as a product of a government stimulus package. The government survived as did the stock market and we the people as well. The majority of our problem today is because of big business, our governments support of big business and the allowing of big business to basically determine the running of our country, how things are going to work, and by putting more and more people out of good paying jobs thus increasing unemployment rates for exorbitant profits in their own pockets. By this I mean utilizing the "more with less" philosophy. We work the good fast employees like dogs and make them beheld to a higher production standard even if this compromises quality to the consumer. Also the over utilization of robotics. Robots don't have to eat and sleep. Squirt them with a little oil now and then is about it. I think you get the picture here. Until our government takes back over running the government from big business and does it correctly our country will remain in a hold pattern and not get much better and even slightly worse.
Right now in the stock market there continues some be some good stock splits to play. But there are also some dogs splitting that you should stay away from. Today VF Corporation (VFC) split at 4:1. If you were in on this split I think you will be satisfied. VFC is best know as the company that makes Wrangler and Lee blue jeans, but make many other things too. Coming in the near future is MasterCard Incorporated (MA) that will be splitting 10:1 Currently MA is trading at about $815.00 per share. In our world of the "Charge It" mentality, I simply don't foresee this split being anything but a BUY! For the more aggressive person that likes mutual funds ride the big business wave since they currently control our economy with something like Amana Income Investor (AMANX) or Principle Capital Appreciation A (CMNWX). Other individual stocks to watch are GIII and CRVL and JNJ. I use to own GIII in my portfolio years ago. Sold it for a nice profit. But just because you sell out on a stock does not mean their might be a time in the future to revisit it. I think that time is now for GIII. CRVL is another stock that use to be a part of my portfolio as well. I am waiting for a split announcement on this one. I know it's history and I think it is getting close to time to be putting it back on the radar. In the event they announce there is going to be a stock split from either of these two companies, GIII or CRVL, make sure to jump on it right away and BUY! I don't think you will be sorry. Well unless you make the fatal mistake of not buying after the split announcement...if they do it.
I hope you find todays entry useful information. I want to say Happy Holiday to everyone. Please be safe and may all your stock markets dreams come true.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Today there was more good news for the market as consumer spending for the month of November 2013 was up 0.5% causing the market to open on a high note. The market is being supported in part due to your Internet Stocks such as Facebook, Twitter, LinkedIn, etc.. My opinion remains that some such Internet Stocks are way over valued and playing off their names and investors fantasy's. Twitter remains operating in the red. A company that losses money instead of makes money with a stock price it is showing in my opinion is a recipe for a disaster. If you absolutely must have an internet stock in your portfolio Facebook is the better bet. At least they operate in the black and have a genius for an owner of the company that knows how to make money.
As I sit back and reflect on the current market and our economy of the past where do I think the current market will go? The simple answer is UP. I see this continued rise through the spring of the year and into the summer of 2014. Yes, as the Federal Reserves continues to cut back on the stimulus package interest rates will rise slowly, which really is not a bad thing. Remember back the way it use to be in the 70's, 80's and 90's. Interest rates were anywhere from 6 to 10 percent on a mortgage rate when buying a new house. Interest rates when buying a car were about the same, perhaps slightly less. Interest rates were a product of competition by the lenders as to who gave the best rates, not as a product of a government stimulus package. The government survived as did the stock market and we the people as well. The majority of our problem today is because of big business, our governments support of big business and the allowing of big business to basically determine the running of our country, how things are going to work, and by putting more and more people out of good paying jobs thus increasing unemployment rates for exorbitant profits in their own pockets. By this I mean utilizing the "more with less" philosophy. We work the good fast employees like dogs and make them beheld to a higher production standard even if this compromises quality to the consumer. Also the over utilization of robotics. Robots don't have to eat and sleep. Squirt them with a little oil now and then is about it. I think you get the picture here. Until our government takes back over running the government from big business and does it correctly our country will remain in a hold pattern and not get much better and even slightly worse.
Right now in the stock market there continues some be some good stock splits to play. But there are also some dogs splitting that you should stay away from. Today VF Corporation (VFC) split at 4:1. If you were in on this split I think you will be satisfied. VFC is best know as the company that makes Wrangler and Lee blue jeans, but make many other things too. Coming in the near future is MasterCard Incorporated (MA) that will be splitting 10:1 Currently MA is trading at about $815.00 per share. In our world of the "Charge It" mentality, I simply don't foresee this split being anything but a BUY! For the more aggressive person that likes mutual funds ride the big business wave since they currently control our economy with something like Amana Income Investor (AMANX) or Principle Capital Appreciation A (CMNWX). Other individual stocks to watch are GIII and CRVL and JNJ. I use to own GIII in my portfolio years ago. Sold it for a nice profit. But just because you sell out on a stock does not mean their might be a time in the future to revisit it. I think that time is now for GIII. CRVL is another stock that use to be a part of my portfolio as well. I am waiting for a split announcement on this one. I know it's history and I think it is getting close to time to be putting it back on the radar. In the event they announce there is going to be a stock split from either of these two companies, GIII or CRVL, make sure to jump on it right away and BUY! I don't think you will be sorry. Well unless you make the fatal mistake of not buying after the split announcement...if they do it.
I hope you find todays entry useful information. I want to say Happy Holiday to everyone. Please be safe and may all your stock markets dreams come true.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Friday, December 13, 2013
Older and Retired Investors
Depending on ones age your portfolio show change as your needs change. Older and Retired investors need to take a little more conservative approach and start changing their portfolio in that direction from a portfolio that was much more aggressive and looking for growth. As you approach retirement or are newly retired the conservative changes in your portfolio should be more focused on Income and not Growth. Your time for Growth in your portfolio is pretty much over with. Do you keep a little in the growth market. Yes, I feel that is good. But that should not be your primary focus anymore.
In the markets you can find many Income Funds. Most all family of funds have there own product or products for income funds. But it is your challenge and that of your financial advisor to find the one that is best for you. My advisor is with JP Morgan/Chase. Although very good and I like him a lot, he cannot possibly know all the details on all stocks and mutual funds. He suggested to me a JP Morgan/Chase Income Fund. Although it was very good, it was not in my best interest and I pointed this out to him as I am very savvy and keep up with things and do my own research. The Franklin family of funds I found was much better for several reasons. The cost of stock was lower, the fees were much less, and I had a lot of Franklin family funds already and I would get an additional discount. The stock is Franklin Income A (FKINX), This fund is currently trading at $2.36 per share. It is a very good Income Fund, but there is something you need to remember about Income Funds. They are not growth stocks. The price for these types of fund may only move a little in the market, but it is the dividends that generate your income. The more shares you own the more dividends you will receive each month. You do have a choice on how you collect your dividends. Monthly, Quarterly, Semi Annually or Yearly. You can also chose to have all or part of the dividends reinvested.
These types are funds are very useful to set up in a brokerage account as the government starts making you take money out of your 401K at age 70 1/2. When they make you take out a payment each year from your 401K and you don't needed it in your pocket for anything. Just take that money and put it in your Income Fund and allow it to grow a little. The government makes up a lot of silly rules with 401K's and Roth IRA's but there are ways to make these rules work to your advantage instead of theirs. Please consult your financial adviser on this. He should be able to help you beat the system. By moving your 401K mandatory withdrawals to brokerage account where there are not such rules, you will eventually make the money back in dividends.
Another way to beat the system if you have enough money in your IRA is before you have to start taking mandatory payments from the IRA/401K is switch all your holds in that account to FKINX or other Income Fund. If your dividends exceed the required amount of withdrawal you simply take the mandated withdrawal by the government and the rest can be left in the IRA for growth. Thus, you are following the rules and taking the government mandatory payments but your account is generating more dividends than the government requires you to take each year. This also works with an Inherited IRA like have where I came up with this exact plan. I make lots more money in dividends that I am required to take by the government and just take out the required withdrawal amount each year that I have set up in semi annual payments in December and July. Thus, kind of beating the system.
As you approach the age of which you wish to retire you should systematically be converting some of your grow in your portfolio to an Income Fund. NOT multiple Income Funs, but pick one that is right for you and stay with it. Some people choose to retire at 62, 65, or perhaps 70. Some people who are financially able even choose to retire before the age of 62. But by the time you have set for your age of retirement you should have your growth funds in the amount you wish to convert into an appropriate Income Fund. I stand by the fact, due to the odds that all MEN should retire at age 62. You are still allowed to have some income, but it is limited. But after you turn 65 if you choose to keep working you may work as much as you wish for both males and females. As females have a longer life expectancy working until age 65 if you work full time and make a good salary then I can get on board with that so long as in good health. Why? The life expectancy of men is much shorter than women and this is a fact we surely all agree with unless there is some kind of major health issue that would change this. Most men that retire at age 65 or 70 will loose in the long run as far as Social Security Benefits if they wait to retire after age 62. This is a fact that they kind of hide under the pillow and don't tell you much about. I will give you a personal example. My father would not retire at age 62, even though I advised him too. Not only did I advise him of this simply because he was a male, but he also had some health issues like diabetes. He waited until he was 65 to retire and start collecting Social Security Benefits. He turned 65 in January and collected 1 Social Security Check and he passed away. He could have been collecting Social Security Checks for the last 3 years prior had he listened to my advise. This kind of thing happens more than you think. And the overwhelming majority of men will never make up the lost Social Security Benefits in their life if they wait to retire at 65 or later. So guys, don't fall into that trap.
I hope all this information to our older and retiring investors is helpful. Of course you are free to add your comments or ask me any questions you may have.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
In the markets you can find many Income Funds. Most all family of funds have there own product or products for income funds. But it is your challenge and that of your financial advisor to find the one that is best for you. My advisor is with JP Morgan/Chase. Although very good and I like him a lot, he cannot possibly know all the details on all stocks and mutual funds. He suggested to me a JP Morgan/Chase Income Fund. Although it was very good, it was not in my best interest and I pointed this out to him as I am very savvy and keep up with things and do my own research. The Franklin family of funds I found was much better for several reasons. The cost of stock was lower, the fees were much less, and I had a lot of Franklin family funds already and I would get an additional discount. The stock is Franklin Income A (FKINX), This fund is currently trading at $2.36 per share. It is a very good Income Fund, but there is something you need to remember about Income Funds. They are not growth stocks. The price for these types of fund may only move a little in the market, but it is the dividends that generate your income. The more shares you own the more dividends you will receive each month. You do have a choice on how you collect your dividends. Monthly, Quarterly, Semi Annually or Yearly. You can also chose to have all or part of the dividends reinvested.
These types are funds are very useful to set up in a brokerage account as the government starts making you take money out of your 401K at age 70 1/2. When they make you take out a payment each year from your 401K and you don't needed it in your pocket for anything. Just take that money and put it in your Income Fund and allow it to grow a little. The government makes up a lot of silly rules with 401K's and Roth IRA's but there are ways to make these rules work to your advantage instead of theirs. Please consult your financial adviser on this. He should be able to help you beat the system. By moving your 401K mandatory withdrawals to brokerage account where there are not such rules, you will eventually make the money back in dividends.
Another way to beat the system if you have enough money in your IRA is before you have to start taking mandatory payments from the IRA/401K is switch all your holds in that account to FKINX or other Income Fund. If your dividends exceed the required amount of withdrawal you simply take the mandated withdrawal by the government and the rest can be left in the IRA for growth. Thus, you are following the rules and taking the government mandatory payments but your account is generating more dividends than the government requires you to take each year. This also works with an Inherited IRA like have where I came up with this exact plan. I make lots more money in dividends that I am required to take by the government and just take out the required withdrawal amount each year that I have set up in semi annual payments in December and July. Thus, kind of beating the system.
As you approach the age of which you wish to retire you should systematically be converting some of your grow in your portfolio to an Income Fund. NOT multiple Income Funs, but pick one that is right for you and stay with it. Some people choose to retire at 62, 65, or perhaps 70. Some people who are financially able even choose to retire before the age of 62. But by the time you have set for your age of retirement you should have your growth funds in the amount you wish to convert into an appropriate Income Fund. I stand by the fact, due to the odds that all MEN should retire at age 62. You are still allowed to have some income, but it is limited. But after you turn 65 if you choose to keep working you may work as much as you wish for both males and females. As females have a longer life expectancy working until age 65 if you work full time and make a good salary then I can get on board with that so long as in good health. Why? The life expectancy of men is much shorter than women and this is a fact we surely all agree with unless there is some kind of major health issue that would change this. Most men that retire at age 65 or 70 will loose in the long run as far as Social Security Benefits if they wait to retire after age 62. This is a fact that they kind of hide under the pillow and don't tell you much about. I will give you a personal example. My father would not retire at age 62, even though I advised him too. Not only did I advise him of this simply because he was a male, but he also had some health issues like diabetes. He waited until he was 65 to retire and start collecting Social Security Benefits. He turned 65 in January and collected 1 Social Security Check and he passed away. He could have been collecting Social Security Checks for the last 3 years prior had he listened to my advise. This kind of thing happens more than you think. And the overwhelming majority of men will never make up the lost Social Security Benefits in their life if they wait to retire at 65 or later. So guys, don't fall into that trap.
I hope all this information to our older and retiring investors is helpful. Of course you are free to add your comments or ask me any questions you may have.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Wednesday, December 4, 2013
Long Term Investing
Longer Term Investing
I have spoken in other posting about Long Term
investments and Short Term Individual Stock investing. This is the strategy that I personally like. But this does not mean it is the only
strategy for Long Term Investing.
I stand by the fact that Mutual Funds should be a long
term investment. That does not mean you cannot
change your Mutual Fund holdings if you see one was not a good choice and doing
very poorly and making little to no money for you. You can always transfer that mutual fund to
something doing much better within your family of funds. But it is still a long term investment in my
book. I have changed mine around over
the years to keep my money working to its best potential for me to increase the
value of my portfolio.
I talked about short term stock holdings previously. Investing in a stock that I know is running
or going to run, waiting on it to increase by 20 to 30 percent, selling it and
taking my profits and running. This does
require lots of monitoring and many average investors do not feel they have
time or want to do this as regularly as they should. But the alternative is for Long Term
Investing of Individual Stocks.
Long Term Investing of Individual Stock is a viable
option. Being able to seek out companies
that over the long haul not the short term that will produce you a lot of
income as the price per share continues to steadily rise and produce you
dividends. Not all long term individual
stocks need to produce dividends to make you money and increase the value of
your portfolio. You must do your research
to find these gems to invest in on a long term basis. I watch Jim Cramer every night on CNBC. His recommendations are primarily for the
long term investor in individual stocks.
I agree with most things he talks about.
But that does not mean you still do not have to do your own research
first. He can point you in the right
direction at some good potential investments, but he does not manage your
portfolio. You do and thus it is your
responsibility to do the leg work and the research to see if something he has
suggested fits into your portfolio and long term goals. Your long term investing of individual stocks
should be diversified into various areas of the market. But this I mean do not hold for example all
Healthcare Stocks or all Tech Stocks or all Retail Stocks etc. Varity will protect you and keep your
portfolio balanced and safer. Also
common sense has to play into your choices.
Your strategy is for long term growth and the potential the
stock/company has to grow. Let's look at
stocks like Pepsi, Coke, McDonalds and Wal-Mart. These types of stocks have reached most of
their growth potential. They have
saturated the market Globally. And
unless we find a new planet to colonize they have nowhere else to grow or to
grow much. Thus you will not find them
in my portfolio and nor should you.
Timing is important when looking for a good deal and the
time is now. For the last three or four
days the market has had a small pull back and has closed down. Poor Black Friday results for retails helped
with this while a good Cyber Monday gave little help to the market. Thus the average retail market did poorly
while discount internet web retailers and high end retailers like Tiffany's
held strong. The rich are always going
to spend money regardless of the economy.
Almost 50% of people in America still feel we are in a poor economy
situation, thus looking for discount prices on the internet at discount
retailers. Thus why these two areas of
the retail market are holding strong.
Where you box stores have seen poor showings in the market. Did I expect this slight pull back in the
market. Yes, and I was waiting to see it
happen. Usually you will see these kinds
of pull backs in the market sometime in November or early December and it held
true once again this year. Thus making
this a good time to look at some individual stocks for your portfolio before
they take off running again.
One other thing we have seen in the market is falling
gold prices. I expect to see these to
continue to fall for awhile. Thus gold
companies are starting to look more attract.
One that I have personally been monitoring for a couple of years now is Randgold
Resources Limited (GOLD). This stock has taken a bath over the past
year or so. Why? Because it is directly related to the prices
of gold which have also been tumbling. Will
Randgold recover? Yes just as soon as
gold prices begin to rise again. I see
worse for Randgold in the future as its price continues to go down. But this is certainly a stock to put on your
watch list and monitor. When gold starts
to soar again so will this stock and that is when you need to buy and ride the
wave. When stock prices begin to decline
again, dump it and take your profits.
Hope this information is helpful to you in your long term
investing plans in your portfolio. Have
a question? Please feel free to leave
them in the comments or email me.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Friday, November 29, 2013
What You Must Have BEFORE Starting Your Portfoilio and Investing!
You should only begin your investing and portfolio if you meet these criteria. And there are some very big reasons as to why. We are going to talk about this today and make sure you are ready to start your investing and portfolio. Here are some MUST haves you need to make sure of before you start investing.
You MUST start investing in your employers 401K or 403B plan right away IF they have matching funds and invest only the amount you have to in order to get the maximum matching by your employer until you have the rest of your must have list completed. Once you have your must have list completed and you have some extra cash on hand, lets say $2000.00 or a little more. Then you are ready to find a good Financial Advisor to get you started building your basic mutual fund holdings in your portfolio.
When you get to the stage of investing in Individual Stocks once you have a good firm foundation in your portfolio of mutual funds, then I highly suggest that you start building as part of your portfolio some individual stocks. You individual stock holding should be NO MORE than 1/3 of your portfolio. As a younger investor you need to focus on stocks that have room to grow. As an older investor you should be more conservative, looking for some individual stocks that have room for some growth, but excellent dividends, but still make you money but perhaps at a little slower pace. The older investor should also be thinking about adding Income Mutual Funds to their holds and relax on growth, especially if you have retired. I am retired and consider myself in this position of investing in more Income Funds that are going to assist me in my retirement. There are some very good ones out there. But right now, the best bang for your bucks is going to be FKINX. Very low cost and about 6% interest on your shares. Nice help with those monthly bills and having a little extra cash that Social Security may not provide for you.
So be careful and do the right thing before starting your portfolio. Are you a younger investor or are you an older investor. Your choices in your investment strategy will be different. Your financial advisor will be able to assist you with that.
One closing note. MOST financial advisor will NOT recommend individual stocks due to corporate restrictions and possible lawsuits if they make a recommendation and you lose all your money. That is a big part of what this BLOG is about, because your financial advisor is most likely not going to give you buying recommendations on any specific individual stock. I will tell you what my opinion (not a recommendation) is if you ask...but the ultimate choice is yours to make and your responsibility for success or failure. All you have to do is email me or place your questions in the comments section below. Just for shits and giggles, did you know Rite-Aid Pharmacy (RAD) is up over 80% since August 2013? Guess who owns shares? THIS GUY!
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
- MUST HAVE, Health Insurance. If it be through your employer, independent agent, or Obamacare. You must have health insurance period. One trip to the hospital and your entire portfolio could be wiped out.
- MUST HAVE, Disability Insurance. What if you get hurt or injured? How are you going to pay your bills and have an income. I suggest Long Term Disability in most cases.
- MUST HAVE, No Credit Card Debt. If you make money with your investments only to turn around and pay off credit cards, what have you really gained?
- MUST HAVE, At Least 2 Months Salary in the Bank. Disability Insurance does not kick in and start paying right away. It also does not cover 100% of your salary. You must have cash on hand to cover this intermediate time before your Disability Insurance kicks in.
- If you are married, this must be accomplished by BOTH spouses, PERIOD!
You MUST start investing in your employers 401K or 403B plan right away IF they have matching funds and invest only the amount you have to in order to get the maximum matching by your employer until you have the rest of your must have list completed. Once you have your must have list completed and you have some extra cash on hand, lets say $2000.00 or a little more. Then you are ready to find a good Financial Advisor to get you started building your basic mutual fund holdings in your portfolio.
When you get to the stage of investing in Individual Stocks once you have a good firm foundation in your portfolio of mutual funds, then I highly suggest that you start building as part of your portfolio some individual stocks. You individual stock holding should be NO MORE than 1/3 of your portfolio. As a younger investor you need to focus on stocks that have room to grow. As an older investor you should be more conservative, looking for some individual stocks that have room for some growth, but excellent dividends, but still make you money but perhaps at a little slower pace. The older investor should also be thinking about adding Income Mutual Funds to their holds and relax on growth, especially if you have retired. I am retired and consider myself in this position of investing in more Income Funds that are going to assist me in my retirement. There are some very good ones out there. But right now, the best bang for your bucks is going to be FKINX. Very low cost and about 6% interest on your shares. Nice help with those monthly bills and having a little extra cash that Social Security may not provide for you.
So be careful and do the right thing before starting your portfolio. Are you a younger investor or are you an older investor. Your choices in your investment strategy will be different. Your financial advisor will be able to assist you with that.
One closing note. MOST financial advisor will NOT recommend individual stocks due to corporate restrictions and possible lawsuits if they make a recommendation and you lose all your money. That is a big part of what this BLOG is about, because your financial advisor is most likely not going to give you buying recommendations on any specific individual stock. I will tell you what my opinion (not a recommendation) is if you ask...but the ultimate choice is yours to make and your responsibility for success or failure. All you have to do is email me or place your questions in the comments section below. Just for shits and giggles, did you know Rite-Aid Pharmacy (RAD) is up over 80% since August 2013? Guess who owns shares? THIS GUY!
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Wednesday, November 27, 2013
When to Sell and When to Trade/Transfer.
Everyone has heard the term "Buy Low and Sell High" well that may or may not be true. Just because you see a small slump does not mean to panic. With Individual Stocks there is a good time to sell most definitely. But remember that Mutual Funds are more of a long term investment, where that is usually not the case with Individual stocks that need to be more closely monitored to produce you an income potential.
Have I had duds for Mutual Funds? Absolutely but when the market takes a high swing like it is now and they are still not making money this is something definitely to be mindful of and look at this mutual fund. You must question yourself, are there better things in the market and within your family of funds that is going to make you money instead of losing it. About a year ago I had a Principle Emerging Market fund that I trusted my Financial Advisor on. It was a dog, a dead dog. I should have done my homework prior to letting him put me in this fund and I would of found it had a much greater history of losing money than making any money. I switched Financial Advisor due to various personal reasons. My previous Financial Advisor was good, he just made a mistake here and put my money in a bad location on this particular Emerging Market Fund. When it got back up to break even, I transferred the funds to another Principle holding. These kinds of transfers with in the same family of funds are free with no penalties or charges to you. After switching Financial Advisors going from LPL to J.P. Morgan Chase I made the call on my own to transfer these funds into a Principle S&P 500 fund I liked. But it is very important when transferring funds it is always in your best interest to stay within the same family of mutual funds to avoid charges and fees. Since I chose to do this in July of 2013, this transfer to the Principle S&P 500 fund I personally chose has warranted a 8.5% gain, instead of bouncing around an losing money in the Emerging Market Fund I had prior. I don't know about you, but I would much rather see an 8.5% increase in the past 4 months, than having a fund that is bouncing around up and down for years making me no money. Money is the name of the game. If you are not making money in a market like this something is definitely wrong in your portfolio or with your mutual fund and stock choices. So never be fearful of finding a better choice. You just have to be smart about it.
Do remember that the market changes. What is good for you today may not be good for you a year or two from now. Especially with Emerging Market Mutual Funds and Individual Stocks. Mutual Funds are mainly funds that you can get it and forget it. You just sit back and watch it grow. Will the have bad years...absolutely. Will they have good years...absolutely. But you must follow the history and do your research. If the good does not out weigh the bad significantly then there is an issue that you may need to be taking a second look at. Having a mutual fund make 20% this year, 15% next year losing 5% the follow is not bad. Yes it had a bad year, but overall you made 30% in the last 3 years or an average of 10% per year. It is for sure a hell of a lot better than a passbook savings or CD at the bank or even an Annuity. So who came out better, them or you? I will take a 10% or more average anytime.
My personal goal is to make at least 10% a year in my portfolio. Will I achieve that 100% of the time. No, and most likely you will not either. But over time everyone should make 10% or more in their mutual fund holds and individual stock holdings. If over a haul of 3 years or more you are not averaging at least 10% or more you need to be sitting down with your Financial Advisor and having a very serious talk on how you together can form a plan to get you there. Since the recession of 2008 the opportunities of making big advances in your portfolio are there. If you have failed to make these huge advances in your mutual funds there is definitely a big problem that needs to be worked out with your financial advisor.
Lets talk about Individual Stocks for just a moment. Many people including the so called experts have a wide variety of opinions. I watch CNBC daily. I also watch Jim Cramer everyday and have it set to record everyday. Somehow there are always fast differing of opinions, even by the so called experts. I tend to like Jim Cramer very much. Do I think that he gives good advise? Yes. But I don't agree with him on everything. Sometimes after doing my own research I agree with him 100% on a stock. Sometimes I think he is have a dream or fantasy. So no, I do not take all of Jim Cramer's advise at face value and nor should you. You must do your own research and form your own educated opinions based on this time and effort you have put into doing good hard research of your own and finding what you feel confident and comfortable investing in. Individual stock are more of a guessing. Lets look at Pfizer for example. A good company. Has had some slow grow periods but it is up on the market for 2013. All of a sudden they get a huge lawsuit over one of their most popular medication. What is going to happen....WHAM the stock takes a big hit and down it goes. This is why you must have a different strategy with Individual Stock than you do with Mutual Funds. The buy low and sell high adage works lots better with Individual Stock. Sit back and what for your 20% to 30 % increase on the stock. Sell!!!! Taking your money running and waiting for your next opportunity to reinvest in another promising stock. When to revisit and rebuy in this example. When Pfizer does take a big hit due to a lawsuit or deregulation of one of its medications. Again taking advantage of buying low and selling high after its recovery. Never be afraid to take your profits and run with an individual stock. Okay you make $1000 today but if you would have waited 3 days you could of made $1500. So what? It is better than waiting those 3 days and seeing your profits dwindle to $200. Then you take that $1000 and you add it your buying power and buying more stock when the opportunity is good and you have done your research to avoid a dog.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Have I had duds for Mutual Funds? Absolutely but when the market takes a high swing like it is now and they are still not making money this is something definitely to be mindful of and look at this mutual fund. You must question yourself, are there better things in the market and within your family of funds that is going to make you money instead of losing it. About a year ago I had a Principle Emerging Market fund that I trusted my Financial Advisor on. It was a dog, a dead dog. I should have done my homework prior to letting him put me in this fund and I would of found it had a much greater history of losing money than making any money. I switched Financial Advisor due to various personal reasons. My previous Financial Advisor was good, he just made a mistake here and put my money in a bad location on this particular Emerging Market Fund. When it got back up to break even, I transferred the funds to another Principle holding. These kinds of transfers with in the same family of funds are free with no penalties or charges to you. After switching Financial Advisors going from LPL to J.P. Morgan Chase I made the call on my own to transfer these funds into a Principle S&P 500 fund I liked. But it is very important when transferring funds it is always in your best interest to stay within the same family of mutual funds to avoid charges and fees. Since I chose to do this in July of 2013, this transfer to the Principle S&P 500 fund I personally chose has warranted a 8.5% gain, instead of bouncing around an losing money in the Emerging Market Fund I had prior. I don't know about you, but I would much rather see an 8.5% increase in the past 4 months, than having a fund that is bouncing around up and down for years making me no money. Money is the name of the game. If you are not making money in a market like this something is definitely wrong in your portfolio or with your mutual fund and stock choices. So never be fearful of finding a better choice. You just have to be smart about it.
Do remember that the market changes. What is good for you today may not be good for you a year or two from now. Especially with Emerging Market Mutual Funds and Individual Stocks. Mutual Funds are mainly funds that you can get it and forget it. You just sit back and watch it grow. Will the have bad years...absolutely. Will they have good years...absolutely. But you must follow the history and do your research. If the good does not out weigh the bad significantly then there is an issue that you may need to be taking a second look at. Having a mutual fund make 20% this year, 15% next year losing 5% the follow is not bad. Yes it had a bad year, but overall you made 30% in the last 3 years or an average of 10% per year. It is for sure a hell of a lot better than a passbook savings or CD at the bank or even an Annuity. So who came out better, them or you? I will take a 10% or more average anytime.
My personal goal is to make at least 10% a year in my portfolio. Will I achieve that 100% of the time. No, and most likely you will not either. But over time everyone should make 10% or more in their mutual fund holds and individual stock holdings. If over a haul of 3 years or more you are not averaging at least 10% or more you need to be sitting down with your Financial Advisor and having a very serious talk on how you together can form a plan to get you there. Since the recession of 2008 the opportunities of making big advances in your portfolio are there. If you have failed to make these huge advances in your mutual funds there is definitely a big problem that needs to be worked out with your financial advisor.
Lets talk about Individual Stocks for just a moment. Many people including the so called experts have a wide variety of opinions. I watch CNBC daily. I also watch Jim Cramer everyday and have it set to record everyday. Somehow there are always fast differing of opinions, even by the so called experts. I tend to like Jim Cramer very much. Do I think that he gives good advise? Yes. But I don't agree with him on everything. Sometimes after doing my own research I agree with him 100% on a stock. Sometimes I think he is have a dream or fantasy. So no, I do not take all of Jim Cramer's advise at face value and nor should you. You must do your own research and form your own educated opinions based on this time and effort you have put into doing good hard research of your own and finding what you feel confident and comfortable investing in. Individual stock are more of a guessing. Lets look at Pfizer for example. A good company. Has had some slow grow periods but it is up on the market for 2013. All of a sudden they get a huge lawsuit over one of their most popular medication. What is going to happen....WHAM the stock takes a big hit and down it goes. This is why you must have a different strategy with Individual Stock than you do with Mutual Funds. The buy low and sell high adage works lots better with Individual Stock. Sit back and what for your 20% to 30 % increase on the stock. Sell!!!! Taking your money running and waiting for your next opportunity to reinvest in another promising stock. When to revisit and rebuy in this example. When Pfizer does take a big hit due to a lawsuit or deregulation of one of its medications. Again taking advantage of buying low and selling high after its recovery. Never be afraid to take your profits and run with an individual stock. Okay you make $1000 today but if you would have waited 3 days you could of made $1500. So what? It is better than waiting those 3 days and seeing your profits dwindle to $200. Then you take that $1000 and you add it your buying power and buying more stock when the opportunity is good and you have done your research to avoid a dog.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Saturday, November 23, 2013
Something for the Indiviual Stock Investors
I have thus far focused on building a good base in our portfolio with Mutual Funds. But those that like to dabble with Individual Stocks I have not forgotten about you. So I am going to address a few things for them today. Those new to the market should NOT be investing in Individual Stocks until you have a good base in your portfolio of mutual funds and you have a clear understanding of how the stock market works. However, you should listen and look at some of the stocks I am going to talk about as this will help you prepare for the future when you are ready.
Buying Individual Stocks is totally different than buying mutual funds. But if comes with a greater risk. If you are not a person that can afford time in your schedule to monitor your Individual Stock holding everyday then my suggestions is that Individual Stocks are probably not you. You should have a good knowledge base of the stock market and how things work. Be able to do research before you buy and sell and know when to take your money and run. We are going to take a look at some of these things together.
Doing your homework and research prior to buying or selling and individual stock is a MUST! Don't go and buy a stock with out researching first. You are just setting yourself up for disaster. Pull up the stock online. Look at the profiles and key statistics and the analyst recommendations. Read articles about the stock you are interested in on the Internet. Also I recommend watching CNBC, especially Jim Cramer. Do I always agree with him. Heck no! But he recent talked about a stock in my personal portfolio that I latched on to long before he wised up to it, plus I got the 2:1 split. Yes, I like Jim Cramer, but sometimes I do not agree with him on investment strategies and some times he simply misses the boat like with DSW. But on the other hand, do I agree with all the analyst's recommendations. Absolutely not.
So lets look at DSW for a moment. DSW split on November 4, 2013. Does this mean you totally missed the ship? Well not exactly as there is plenty of room for this stock to grow. The stock split significantly below its 52 week low prior to the split. Since the split it is currently up about 8%. Brean Capital is calling for sell. I disagree with them. The overall stock analyst rate the stock at 2.4 (1=Buy and 5=Sell). So it is right in the middle in more of a hold pattern. I do not think this is a bad time to buy the stock, but if sure would have been nice if you could have gotten in on the split in November.
Lets take a look at Facebook (FB). This is not a stock that I have in my personal portfolio. It has an analyst rating of 1.8 making it a buy. Why do I not have FB in my portfolio. Well you can only fill your account with so many stocks. But I agree. This is a good buy right now. This is not a stagnant company. They are going places and coming up with new and better things everyday. Mark Zuckerberg is no fool and he did not bring the company public to lose money. He took nothing and made it into something. And that something continues to grow. I think you are safe here if you hold on for a long stretch.
Here are some other individual stocks that I am going to recommend you take a look at and do your own research. I simply cannot talk about them all. Take a look at VEEV, BBY, GME, VFC (better hurry as it splits 4:1 in December), TJX, GILD, TIF to name a few.
I would like to make one more suggestion to you. Do NOT use your Financial Advisor and the company they work for to do your individual stock investing. Have some extra cash and call it your "play money" that if you lost it all you would not go bankrupt or hungry or compromise your household status day to day. You individual stock "play money" should be a small part of your portfolio. Not the major stuff that you are dependent upon for your future. Start with a reasonable amount that you can afford. Do not drain your bank account. And build and build on that money you set aside and buy and sell your way to more money. Don't depend on your bank account to keep funneling more and more money into your individual stock account. I suggest opening up an account with a discount broker. I personally use Scottrade. They charge $7.00 per trade to buy or sell and most important to me is that I don't get mass emails in my inbox from them and they don't keep my phone ringing off the hook. But they are easy for me to access if I every need assistance, have a question or do not understand something on their website or perhaps an error message or warning I may have gotten. I simply pickup the phone and call the local branch office and they are always great at answering my questions. Your local branch is listed once you login to your account for easy access.
Thanks everyone. Hope you enjoyed todays information and I wish you all the best of success.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
Buying Individual Stocks is totally different than buying mutual funds. But if comes with a greater risk. If you are not a person that can afford time in your schedule to monitor your Individual Stock holding everyday then my suggestions is that Individual Stocks are probably not you. You should have a good knowledge base of the stock market and how things work. Be able to do research before you buy and sell and know when to take your money and run. We are going to take a look at some of these things together.
Doing your homework and research prior to buying or selling and individual stock is a MUST! Don't go and buy a stock with out researching first. You are just setting yourself up for disaster. Pull up the stock online. Look at the profiles and key statistics and the analyst recommendations. Read articles about the stock you are interested in on the Internet. Also I recommend watching CNBC, especially Jim Cramer. Do I always agree with him. Heck no! But he recent talked about a stock in my personal portfolio that I latched on to long before he wised up to it, plus I got the 2:1 split. Yes, I like Jim Cramer, but sometimes I do not agree with him on investment strategies and some times he simply misses the boat like with DSW. But on the other hand, do I agree with all the analyst's recommendations. Absolutely not.
So lets look at DSW for a moment. DSW split on November 4, 2013. Does this mean you totally missed the ship? Well not exactly as there is plenty of room for this stock to grow. The stock split significantly below its 52 week low prior to the split. Since the split it is currently up about 8%. Brean Capital is calling for sell. I disagree with them. The overall stock analyst rate the stock at 2.4 (1=Buy and 5=Sell). So it is right in the middle in more of a hold pattern. I do not think this is a bad time to buy the stock, but if sure would have been nice if you could have gotten in on the split in November.
Lets take a look at Facebook (FB). This is not a stock that I have in my personal portfolio. It has an analyst rating of 1.8 making it a buy. Why do I not have FB in my portfolio. Well you can only fill your account with so many stocks. But I agree. This is a good buy right now. This is not a stagnant company. They are going places and coming up with new and better things everyday. Mark Zuckerberg is no fool and he did not bring the company public to lose money. He took nothing and made it into something. And that something continues to grow. I think you are safe here if you hold on for a long stretch.
Here are some other individual stocks that I am going to recommend you take a look at and do your own research. I simply cannot talk about them all. Take a look at VEEV, BBY, GME, VFC (better hurry as it splits 4:1 in December), TJX, GILD, TIF to name a few.
I would like to make one more suggestion to you. Do NOT use your Financial Advisor and the company they work for to do your individual stock investing. Have some extra cash and call it your "play money" that if you lost it all you would not go bankrupt or hungry or compromise your household status day to day. You individual stock "play money" should be a small part of your portfolio. Not the major stuff that you are dependent upon for your future. Start with a reasonable amount that you can afford. Do not drain your bank account. And build and build on that money you set aside and buy and sell your way to more money. Don't depend on your bank account to keep funneling more and more money into your individual stock account. I suggest opening up an account with a discount broker. I personally use Scottrade. They charge $7.00 per trade to buy or sell and most important to me is that I don't get mass emails in my inbox from them and they don't keep my phone ringing off the hook. But they are easy for me to access if I every need assistance, have a question or do not understand something on their website or perhaps an error message or warning I may have gotten. I simply pickup the phone and call the local branch office and they are always great at answering my questions. Your local branch is listed once you login to your account for easy access.
Thanks everyone. Hope you enjoyed todays information and I wish you all the best of success.
Gus S.
Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.
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