Don't differentiate between money saved and money (through
investments) earned in brokerage accounts. Money is money. A penny saved is a
penny earned. So, if your portfolio net gain or loss can beat a (bull or bear)
market's gain or loss by saving, it counts the same as making.
All investment and brokerage firms will say "Invest for the long
term". What they don't say is that the long term extends past your lifetime. All
states, all countries, all worlds go through constant cycles of boom and bust.
So all that matters to the individual is whether the cycle is boom or bust at
the exact time of his/her retirement. And then at the exact time of his/her
progeny's retirement. Ad infinitum. Other than that it's just watch the
kaleidoscope of getting shares cheaply or expensively. So, the investment firms
are dispensing good (buy & hold) advice for the species, not the
individual......blah blah.
These are my favorite publications and websites for business studies: Smart Money, Money, Kiplinger's, Investors Business Daily, Motley Fool, The Street, Morningstar, Yahoo (finance), Pitbull Investor
And there are two power ratings sites, one for long term & one for short term: powerratings.net & tradingmarkets.com
THE SHADOW KNOWS
I know that diversify, diversify is the mantra. However, if a person misses, or worse, "mis-invests" a hot sector, it really hurts. For instance, at what perfect crossroads begins the reemergence of the auto industry and all of it's related businesses? Can you find the moment of opportunity and turnaround? Did you buy into the oil sector at $140/bbl.? You know who you are and what you are.
You know also that sector followers lose, like lemmings to the sea. Sectors seers (initiators) win, if they exist at all.
When do I get back into real estate? Now? Monday at 2 P.M.? November 15, 2011? At it's apex?
Should I have bought more Ford? Should I have sold it so early?
Not many can master it, so buy and hold & see sentence #1 is all that most can do. We will buy hot sectors high and sell low otherwise.
BUY THE DOW ULTRA ETF AT DJIA 14,000. That's my advice. Freak out and sell at Dow 7000.
Sincerely,
The average investor.
My latest belief: I say investigate the "Cup & Handle" investing strategy.
July 8/2009
The ten years just passed was one of the worst decades ever for the market (S&P -35%). Bush was elected in 2000. I believe the indices outperformed only Hoover's years. Congrats on that. That's why we gave G 8 years and Herbert only 4 years. Personal savings rates were negative for Bush's terms. We gave
G. W. B. a mandate to leave a legacy. He complied with "Riches to the Richest".
"Buy and Hold" is bull vomit. Buy low and sell high. If you had a quarter mil. invested in Oct., 2007 and did nothing, you had 125 thou. in Mar. of '09. Never mind your advisor's buy and hold routine. Do the opposite of what you did this time. Sell at Dow 14000, sit on your money, then buy back in at Dow 6500. DUH!
I think that we can now clearly see that the collapses of Bear and Lehman caused a slight ripple in the economy.
The best reason to be invested: You won't have liquidity to throw hither and yon.
Investing is about being two-headed. I have to say "How much money can I afford to throw in the toilet?" Then, "O.k., let's buy some investment I can double my money on. The first statement is counterintuitive to the second. I like Fannie Mae at $1.20, but perhaps I am descending unwittingly into the toilet's maelstrom.
Don't worry about if gains come in principal or distributions. It's all good. Price stagnation is fine on a dividend stock (long term) but won't do on a non-dividend holding.
Prognostications 10/22/09:
If you are holding a profit in DD, F, or PCBK I would run with it, even though the first is paying a good dividend. You can get the same % for a safer bet. At any rate watch for the "W" on that. On PCBK I would definitely consider a break-even good. No dividend there after a cut. Obviously, the auto sector is a crap-shoot, albeit this is the only major U.S. stock offering. MO and BA, I'm still holding. Waiting for the new airplane and tobacco always survives, even though Altria is more diversified. Do not buy now on these wait-and-sees: FRO, SFL, EEQ (or EEP partnership), which are all energy related; VGR is shaky (but with a steady dividend) in a reliable category; don't consider LCC or GE. If you've speculated with CROX on the plus side, be wary. Remember- these consistent dividend stocks are now GROWTH: BAC, USB.
In another language, get rid of DD if the broad market declines. CROX is aggressive gambling, as is SIRI, LCC, AFN, XNN, and F. BAC and USB are good to get out of in a break-even scenario. They both cut their dividend to about zero. Dump VGR if they cut the dividend. Their numbers say they will cut. Get rid of PCBK, even at a 30% loss. SFL is another break-even "get rid of".
AD INFINITUM, AD NAUSEUM 12/17/09
Try to understand, the money lost by some never went away and never does. Someone had the money all along. Now, beneficiaries of said redistribution (theft) are using your erstwhile funds to buy on the cheap. Thus the market rebounding without you and the money market. And the short-seller shall become the bull. The grim(n) reaper. The gracious sadist.
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12/19/11-I haven't written here in 2 years?? So now we are in a pattern of futures (before the open) looking good, for instance S&P futures may be up 7 points. But by the end of the day, the market loses due to worries about blah. 12/19=Futures up 7 points on the S&P. Final tally was 14 down. There is no traction up or down, just like the last ten years. And there is no refuge in nonexistent dividends. There is nowhere for the middle class to go as they are squeezed out.
Stick with Altria, there's not better right now in this decade long rut. No Santa Claus rally this year. It was in October?? Dazed and confused.
12/20/11-Of course today turned yesterday's theory to crap. Except for the Altria. Believe in them. Futures were up and the final was bigger (+3%), don't believe in me.
12/21/11-
...fell on Wednesday as hope faded that banks would use the European Central Bank's massive funding operation …
12/22-up about 60, why?
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