The stock market is a brutal beast of lessons that will be forcibly learned. These lessons can defy what kind of investor you may become and how successful you may end up in the long term. One of the most important lessons that has to be learned is to sell when a stock has become a losing battle that may never be a success story.
Failure is never easy. Admitting that a stock that you invested in is a losing stock is never easy. Whether it be mental or psychological, many investors fall into the trap of buy and hold forever regardless of the losses that may occur. Stock dropped 50%? Sounds like a good hold strategy. It’ll come back someday - won’t it? Possibly.
Thursday, June 30, 2016
Wednesday, June 29, 2016
The Importance of a 401-K
Often times in the dividend growth investing community, new investors find themselves throwing a ton of their cash at their dividend growth portfolios to increase the dividend payments as fast as possible. This is a great idea – it adds fuel to the fire and makes it burn that much faster until it’s a huge flame. However, sometimes these investors forget about the all too important 401k in lieu of simply adding to their own dividend portfolios first. This can be a huge mistake.
The stock market as a whole is a giant financial plan. Without it, retirement would be but a dream for a few and most would simply have to rely on meager savings that couldn’t grow even half as fast. Hell, even banks would have a hard time surviving without making money off of their investments. One of the best financial plans that utilizes the strength of the market is a company 401-K or stock purchase plan. If you have one offered at the business that you work in, this is one of the best places to stack your money, especially if the employer offers matching in any way to your contributions.
The stock market as a whole is a giant financial plan. Without it, retirement would be but a dream for a few and most would simply have to rely on meager savings that couldn’t grow even half as fast. Hell, even banks would have a hard time surviving without making money off of their investments. One of the best financial plans that utilizes the strength of the market is a company 401-K or stock purchase plan. If you have one offered at the business that you work in, this is one of the best places to stack your money, especially if the employer offers matching in any way to your contributions.
Tuesday, June 28, 2016
Recent Buy: Wells Fargo
Wells Fargo Corp. (WFC) is a great company. They have a huge moat, they take care of their customers, manage their debt, and most importantly they still make money. These are all the qualities I look for in companies that I want to add to the ultimate legacy portfolio that I'm piecing together.
As pictured above (myself and some guy dressed as "pedo-bear"), I have simply been watching and waiting for this moment. Sometimes that's all it takes. There's a good metaphor in there but I can't quite grasp it right now. I'll simply put it this way, if you wait long enough, what you want will eventually find its way to you. Let's sum up the purchase then:
Purchased 22 shares of WFC on 6/28/2016 @ $45.47/share
+$9.99 trade fee
Total investment cost: $1,010.33
Total annual dividend added to the Dividend Scythe: $33.44
I know this purchase isn't exactly what I had planned. I had been keeping my eye on Boeing (BA) for a time there as well but I didn't have enough capital to bring in a solid position into Boeing (BA) like I wanted so I opted for Wells Fargo Corp. (WFC) instead. Also, with the Brexit news I highly anticipate that Wells Fargo Corp. (WFC) will see a sizable bump in the future. I take this as a sign of a rate hike and I hope that I'm right as they generally play very well for those who own banks in their portfolios.
Saturday, June 25, 2016
Brexit Deals
Brexit this, Brexit that, blah blah blah! It's all hearsay that is all together a scare tactic that has definitely made a huge impact on the market. Granted, it does have some effect in the overall scheme of things but it doesn't really effect the market as a whole. That being said, a smart investor must look at the long term outlook. There are deals to be had!
It's hard though isn't it? It's hard to think about anything other than the huge amount of money being lost in your own portfolio while all of these changes occur in the market. I know my own portfolio has seen a huge drop since the announcement of Brexit. I can only imagine how some other portfolios look.
As this is the case, I write this post if only to remind those with larger portfolios to look at the larger picture. We need to remember to look past the current loses and look at the further gains that could be made by buying in while prices are low. And prices are certainly a lot lower than they have been for the last couple months with the news of Brexit. While I don't believe that this is the bottom just yet, I know that I myself will be prepared when they do hit bottom in what I would guess will take a few weeks time to come.
If you've been following my last couple posts, you've seen that I've been keeping my eye on BA. Thanks to the news of Brexit, my entry into BA should be at a much lower price. Just got to keep my eyes on the prize and then jump on in! Happy hunting boys and girls!
It's hard though isn't it? It's hard to think about anything other than the huge amount of money being lost in your own portfolio while all of these changes occur in the market. I know my own portfolio has seen a huge drop since the announcement of Brexit. I can only imagine how some other portfolios look.
As this is the case, I write this post if only to remind those with larger portfolios to look at the larger picture. We need to remember to look past the current loses and look at the further gains that could be made by buying in while prices are low. And prices are certainly a lot lower than they have been for the last couple months with the news of Brexit. While I don't believe that this is the bottom just yet, I know that I myself will be prepared when they do hit bottom in what I would guess will take a few weeks time to come.
If you've been following my last couple posts, you've seen that I've been keeping my eye on BA. Thanks to the news of Brexit, my entry into BA should be at a much lower price. Just got to keep my eyes on the prize and then jump on in! Happy hunting boys and girls!
Thursday, June 23, 2016
Triple Worth YTD
Hello everyone! What a beautiful day it is to have a birthday! While I'm busy waking up and getting ready for work, I can't help but reflect that as of a few days ago when I put the next stack of cash into my investing account, I have now officially tripled the amount of money that is in the portfolio since the start of the year (or basically tripled, not exactly!).
It feels great to hit milestones. Whether it be a birthday where you celebrate that many years of life lived and experienced or it be a milestone number for your portfolio, it's important to reflect and let it sink in. Only a year ago I would have thought it a near impossible task to put away as much as I've put away in the portfolio so far. Even though it is a small amount compared to a lot of other portfolios that I follow from other bloggers, it's impressive to me because I was able to put away that much and still live life to the fullest.
To date, the wife and I have achieved the level of saving that we have been able to reach by simply making good decisions on a daily basis. Whether that mean cutting down on Mountain Dew Kick Starts or ceasing the habit of eating out nearly every night, small decisions have led to big changes in our portfolio. Rome wasn't built in a day and neither was a legacy portfolio.
Moving forward I plan to make the same and better choices to further the savings rate in our household. By doing so, the portfolio should generate even more steam moving forward. Whether a market drop hits or a stock choice turns out to be a terrible one, it should go through its own stages of life as we all do. We can only hope that the great majority of picks end up bringing about positive change.
I hope all of you are having a good day and that all is well with you and your families. Take care everyone!
It feels great to hit milestones. Whether it be a birthday where you celebrate that many years of life lived and experienced or it be a milestone number for your portfolio, it's important to reflect and let it sink in. Only a year ago I would have thought it a near impossible task to put away as much as I've put away in the portfolio so far. Even though it is a small amount compared to a lot of other portfolios that I follow from other bloggers, it's impressive to me because I was able to put away that much and still live life to the fullest.
To date, the wife and I have achieved the level of saving that we have been able to reach by simply making good decisions on a daily basis. Whether that mean cutting down on Mountain Dew Kick Starts or ceasing the habit of eating out nearly every night, small decisions have led to big changes in our portfolio. Rome wasn't built in a day and neither was a legacy portfolio.
Moving forward I plan to make the same and better choices to further the savings rate in our household. By doing so, the portfolio should generate even more steam moving forward. Whether a market drop hits or a stock choice turns out to be a terrible one, it should go through its own stages of life as we all do. We can only hope that the great majority of picks end up bringing about positive change.
I hope all of you are having a good day and that all is well with you and your families. Take care everyone!
Monday, June 20, 2016
Update: Currently Stacking Cash
Sorry to go dark on communications and posts for a while, followers. Life has been quite crazy for the last couple weeks as they transition me to a new position at work. With the move comes a whole new set of rules, information, and of course training. That being said, it’s been very time consuming and my brain has been less than capable of writing or reviewing much in the way of stocks.
This won’t be forever however as there is always an end to whatever hardship comes at us in life. Such is the way of things! You have to be ready to tuck and roll at any time. Looking forward however, I will admit that I’ve had a hard time of things looking at potential stock buys for the month of June. I’m sitting on my investing cash for now and just eying out the different options.
This won’t be forever however as there is always an end to whatever hardship comes at us in life. Such is the way of things! You have to be ready to tuck and roll at any time. Looking forward however, I will admit that I’ve had a hard time of things looking at potential stock buys for the month of June. I’m sitting on my investing cash for now and just eying out the different options.
Tuesday, June 7, 2016
Selling: The Emotional Response
What is it that makes us human? One could argue anything really. It could be our ability to adapt as mammals to new situations. It could also be our ability to feel emotions beyond that of the initial origin. The point is that being human comes with many advantages but also with some clear disadvantages. Sometimes however, they can be one and the same.
One of these advantageous disadvantages is our ability to feel emotions on a higher level and to learn from them on an IQ level that is above that of other species on the planet. By having this ability we can think, reason, and make judgement calls based on it to predictably influence our future course or direction. When this is applied to stocks our minds can play tricks on us. Did you know that the human brain can experience pain much stronger than it can experience happiness?
The feeling is a gut response by your sympathetic nervous system that makes sure that if something bad happens in your life, you may be smart enough to avoid it next time. This is a serious advantage when it comes to learning lessons in the stock market. If we make a bad pick, we can learn from that pick and how to avoid it next time (to a certain degree). This however is also a double edged sword, as I motioned to earlier in the article. By having this ability, we can also be tricked by our own minds.
One of these advantageous disadvantages is our ability to feel emotions on a higher level and to learn from them on an IQ level that is above that of other species on the planet. By having this ability we can think, reason, and make judgement calls based on it to predictably influence our future course or direction. When this is applied to stocks our minds can play tricks on us. Did you know that the human brain can experience pain much stronger than it can experience happiness?
The feeling is a gut response by your sympathetic nervous system that makes sure that if something bad happens in your life, you may be smart enough to avoid it next time. This is a serious advantage when it comes to learning lessons in the stock market. If we make a bad pick, we can learn from that pick and how to avoid it next time (to a certain degree). This however is also a double edged sword, as I motioned to earlier in the article. By having this ability, we can also be tricked by our own minds.
Thursday, June 2, 2016
Volume as a Buy Indicator
Many different investors use many different types of data to qualify a stock for purchase. If you’ve read my investing essentials series, you know a lot of the figures that I myself use. One figure however that was not listed is one that I use to determine whether or not I may be buying in at the right (or best) price. This figure that is relied on is more on the technical analysis side of analysis. What I’m referring to is one of the market itself. It’s a number so valuable that it can be seen as one of the largest indicators of what the market truly values at stock at. I’m talking about volume.
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