Lets talk stocks - personal finance/investment thread

I'm a pretty young guy, old enough to buy my own alcohol but young enough that people are shocked that I own a real tie. Given that, I've heard about The Good Old Days when interest rates actually meant money in a savings acct or IRA would DO something but it still sounds like something right up there with going to school uphill both ways barefoot in the snow... So until just recently I pretty much thought of money as something you earned and put into a bank account

Then I was reminded about some shares of intel I've owned since about 2004 and was introduced to the concept of dividends and I now find myself wondering if there's more out there than shoving cash in a box and watching one hundredth of a cent accrue per decade. I've gotten more cash value out of coupons than some bank accounts.

What about you fellow TFPers? Anybody here "put their money to work"?

 

Own three real estate properties and one business (money-guzzling one at that). Profitability of the real estate varies between 10-20% per year. Business profitability depends on total value of contracts and average profit % per contracts, so it's anywhere between 5 and 50% in any given year.

I have a discretionary budget that I do not invest, but waste on little things such as water, food, electricity, gas, internet, petrol and travel expenses.

 

Up until a few months ago I was working for my money. Even then, what I made pretty much went to silly stuff like food and shelter. Not much left over to even stick in a shithole savings account, never mind invest.

Still, I wish I'd done some investing when I was young - before I had so many other financial responsibilities.

The answer to your question is yes. If you've got the spare cash to risk and can weather some possible short term losses, you'd be a fool not to go for it.

 

One lesson I learned the hard way is to develop a buy/sell discipline and stick with it. When the emotions involved in investing trumps discipline it becomes high risk speculation. I subscribe to Investors Business Daily and I like the investment approach focused by the founder William O'Neil, in particular the idea of cutting losses at 8% or less. The math of over-coming losses speaks for itself - in order to make up a 50% loss, 100% gain is needed. Every investor thought they were a genius in the 90's - the only one's that were, knew when to sell and actually did it.

In today's market, companies with a solid history of paying dividends have been the foundation of a good portfolio helping to minimize downside risks. A company like Intel is yielding about 3.4%, with stable/predictable earnings, and some upside potential. INTC won't make a person rich overnight, but with time it will do well.

 

Absolutely agree with the above post.
Take small losses on your losers. 8% is a fine number. If you later want to get back into that position you can always buy it back. Stock trades are like $10 now so it does not hurt to get out of harm's way and then get back in if the coast is clear.
Let your winners run but trail a stop behind them as well. You should NEVER let a winning position turn into a loss. Take partial profits, trail a stop but don't let a position flip from the win column to the loss column.
The key to all of this: Don't get knocked out of the game by one or two huge stupid losses. If you're wrong about something, take the manageable loss and move on. You can get it back later. If you take a stupid position, particularly one too large for you to manage, and then fly it in to the ground, it's game over. You won't ever get it back if you don't live to play another day.

 

First thing... read the Wealthy Barber. It is the best of all possible financial self-help books. It's not about investing... it's about becoming wealthy.

Second, remember that most people have perfected the art of buying stocks high and selling them low. Beyond that, find a style that is comfortable for YOU, that has some basis in common sense (a VERY rare commodity).

My investments outside the one company I'm a partner in is entirely in mutual funds. I like the instant diversification and having someone else do the research and trading for me. My big gains come from my company, the mutual funds are simply a place to put my other funds where I don't have to worry too much about them.

 

Ah, Intel. How I love you. You put me through college, made college a better place and are helping my retirement now. Bob Noyce, assuming we both end up in the same place, I'm buying you a beer. You were brilliant - the Steve Jobs of your era. It's too bad no one remembers you.

Except for a few select stocks (Intel, GE and Wells Fargo) I don't play that market. I have some funds that do, but as far as individual investments go, I've been going with municipal bonds for the last few years. They allow for tax-free growth and are pretty safe. With Greece, I see that market starting to firm up a bit, which is obviously good.

 

I don't think I'll ever do more than a token effort on the short term buy-low-sell-high thing, it just seems too much like gambling to me, but long term growth and steady dividend payout (or a good interest rate of such a creature exists) seem to me like a much more solid investment for growing money over time. Things can still go south but its more stable than basically playing blackjack.

 

A family illness and the death of a parent has mostly removed the difficulty of having to find a place to invest. As I start over, yet again, I keep a little in several places and I've found a small company down in Mexico willing to pay nearly 10%. I put a small amount in with them. They use your money to install solar and wind power generators and once the job is done and the customer pays them they pay you back. I was a little more then a little skeptical at first but so far so good. I'm also looking at throwing in with a few other investors to open up a sorely needed money exchange on the cruise ship pier near my house. If the red tape on that can ever be worked out it could well be a cash cow. Though I honestly expect we'll never be issued the needed permits and the guy in charge of issuing said permits brother/sister/nephew etc... will be opening the exact same business in short order. Welcome to Mexico.

 

Shares in a huge mining company that pays big dividends, (more money in one year than I have EVER been paid by a bank),
and investment properties. I'm looking for another couple of houses now.

 

I almost forgot... have a rental property too. Right now it's barely covering cost but in a few years it should be income generating.