The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

I am using TD ameritrade right now , but might switch to interactive brokers eventually. I don't buy or sell often and am more of a buy and hold as my time to dedicate towards these activities has been zero but lately is more - ergo the interest. As for allowing DRIPs, not sure on that one but should probably read up as one of my stocks (NRG) recently started initiating a dividend payment.

It looks as if they do DRIPs according to http://www.fool.com/how-to-invest/broker/index.aspx , but I would certainly recommend finding a broker with a better commission, as $10/trade is VERY high. Just make sure that you do a transfer instead of a sell-then-buy, as wash sale rules may come into effect. You should be able to find ads where brokerages will pay (either partially or fully) your transfer cost, so you don't have to worry TOO much about that cancel fee. Looks like OptionsHouse does $4/trade with DRIPs. One thing to be aware of, though, is that most brokerages today will only deal in whole shares, so you'll get a fraction of the dividend as cash in many cases, and some calculations are necessary if you want to invest a certain amount of money in something.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

UNH-I have always found this site to be about as informative as any when hunting for dividend bearing vehicles http://www.quantumonline.com/ There is a wealth of information there and you can register for free to access anything you need. i particularly like there lists of IPOs for the various yielding instruments. Hope this helps.

 

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

UNH-I have always found this site to be about as informative as any when hunting for dividend bearing vehicles http://www.quantumonline.com/ There is a wealth of information there and you can register for free to access anything you need. i particularly like there lists of IPOs for the various yielding instruments. Hope this helps.

IPOs aren't good unless you can either get in before the stock is made public, or you can short the stock immediately when it is made public.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

IPOs aren't good unless you can either get in before the stock is made public, or you can short the stock immediately when it is made public.

We are not talking about your run of the mill IPOs-we are talking about preferred stocks issued as IPOs. They are issued at a face value of $25 and bought at that price. They are callable at that price and mature at that price. You do not have to get in before being made public and you do not have to short the stock-or do anything else except own it for the ex dividend dates to sit back and collect the dividends. You can if you wish sell it at any time-for example if it gets up much higher than the original $25 (see DTK which is now at about $28) or you can hold it for as long as you are happy with the yield. Unlike common stocks-preferred stock dividends are much more secure. They can of course be lowered and even stopped-but that is much less likely than a common stock doing the same thing. During the great trouble of 2008-2009 many of these stocks fell considerably-but none of the 20+ I have ever stopped or lowered a single dividend. Now in 2013 every one of them has not only returned to it's original value of $25-some have gone up even higher-not that i am willing to part with them since they are all yielding about 6% or more at this stage and it is getting hard to replace that.

 

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

We are not talking about your run of the mill IPOs-we are talking about preferred stocks issued as IPOs. They are issued at a face value of $25 and bought at that price. They are callable at that price and mature at that price. You do not have to get in before being made public and you do not have to short the stock-or do anything else except own it for the ex dividend dates to sit back and collect the dividends. You can if you wish sell it at any time-for example if it gets up much higher than the original $25 (see DTK which is now at about $28) or you can hold it for as long as you are happy with the yield. Unlike common stocks-preferred stock dividends are much more secure. They can of course be lowered and even stopped-but that is much less likely than a common stock doing the same thing. During the great trouble of 2008-2009 many of these stocks fell considerably-but none of the 20+ I have ever stopped or lowered a single dividend. Now in 2013 every one of them has not only returned to it's original value of $25-some have gone up even higher-not that i am willing to part with them since they are all yielding about 6% or more at this stage and it is getting hard to replace that.

Very interesting. One thing I did notice, though, is that your run of the mill discount brokerage houses do not offer these sorts of things. Do you have details of any brokerages that do handle these? Are there any over-the-top commissions related to this?

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Very interesting. One thing I did notice, though, is that your run of the mill discount brokerage houses do not offer these sorts of things. Do you have details of any brokerages that do handle these? Are there any over-the-top commissions related to this?

I have been buying these preferreds for over 20 years and sure that every they are available through any brokerage or on line account. Personally I use oppenheimer (i have been with the same advisor for 25 years and will be devastated when and if he is no longer there). All I knew was medicine-but I have made it a priority to learn from an experienced Wall St man-he is one of the many vice presidents witht he company. I was very quick to admit that all I knew was how to run a medical practice and how to make money by working and earning. The things you need to know in order to make money with money-I had no clue about. But even a totally maive investor like myself learns alot by having the best advice and paying attention for this long. There are lots of interest bearing investments but each and every one has its advantages and disadvantages. The preferred stocks behave very similarly to bonds but are far more liquid and trade more easily. Some trade rather thinly so the spreads are bigger-but some are incredibly easy to buy and sell-although that has never been my primary focus. I buy them usually to hold-and when they get called (often at 5 years but sometimes much longer) there is no fee involved (and no commission). It is not very exciting-and you have very little if any chance for growth unless you can find some that are trading at a discount and later get called at $25. But their safety level is close to that of Bonds and well above common stock. As with anything else-do your homework and carefully look at the finances of the parent company. What is nice about the site I gave is they do a lot of the legwork for you-they will give you the S&P rating for any company that has one. If you generally stick to BB or higher you can get very good yield. If you want more safety-then look for investment grade ratings of BBB+ or above but will of course have to settle for a little lower yield. Right now-the preferred part of my portfolio is getting an average yield of 6.75% and since i was able to purchase many of these in the $22-$23 level a few years ago-my overall yield is of course higher. If i was younger-then I would of course be allocating more of my money to growth and the more volatile stocks (which I did 20-30 years ago). But now i am very comfortable with the yield from Corporate bonds, Municipal bonds and preferred stocks while at the same time gambling a bit on Oil Trusts, REITs, common stocks, etc.

A key point in my overall strategy however remains-diversification-even in any one type of investment(such as preferred stocks) I keep only a certain amount in any industry-banking(domestic and foreign), real estate, pharmaceuticals, oil, etc. And I keep track on a very regualr schedule and adjust when needed.

 

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

I have been buying these preferreds for over 20 years and sure that every they are available through any brokerage or on line account. Personally I use oppenheimer (i have been with the same advisor for 25 years and will be devastated when and if he is no longer there). All I knew was medicine-but I have made it a priority to learn from an experienced Wall St man-he is one of the many vice presidents witht he company. I was very quick to admit that all I knew was how to run a medical practice and how to make money by working and earning. The things you need to know in order to make money with money-I had no clue about. But even a totally maive investor like myself learns alot by having the best advice and paying attention for this long. There are lots of interest bearing investments but each and every one has its advantages and disadvantages. The preferred stocks behave very similarly to bonds but are far more liquid and trade more easily. Some trade rather thinly so the spreads are bigger-but some are incredibly easy to buy and sell-although that has never been my primary focus. I buy them usually to hold-and when they get called (often at 5 years but sometimes much longer) there is no fee involved (and no commission). It is not very exciting-and you have very little if any chance for growth unless you can find some that are trading at a discount and later get called at $25. But their safety level is close to that of Bonds and well above common stock. As with anything else-do your homework and carefully look at the finances of the parent company. What is nice about the site I gave is they do a lot of the legwork for you-they will give you the S&P rating for any company that has one. If you generally stick to BB or higher you can get very good yield. If you want more safety-then look for investment grade ratings of BBB+ or above but will of course have to settle for a little lower yield. Right now-the preferred part of my portfolio is getting an average yield of 6.75% and since i was able to purchase many of these in the $22-$23 level a few years ago-my overall yield is of course higher. If i was younger-then I would of course be allocating more of my money to growth and the more volatile stocks (which I did 20-30 years ago). But now i am very comfortable with the yield from Corporate bonds, Municipal bonds and preferred stocks while at the same time gambling a bit on Oil Trusts, REITs, common stocks, etc.

A key point in my overall strategy however remains-diversification-even in any one type of investment(such as preferred stocks) I keep only a certain amount in any industry-banking(domestic and foreign), real estate, pharmaceuticals, oil, etc. And I keep track on a very regualr schedule and adjust when needed.

Very nice. Actually, if you want to play it diversified, I did find an article about preferred stock ETFs. They are monthly distributions. http://slant.investorplace.com/2013/02/3-etfs-offering-access-to-high-yield-preferred-stocks/

Here's a question, though, and you should be able to discern this from your 1040 if you have preferreds: What are the tax implications on this? Are they considered ordinary dividends, qualified dividends, ordinary interest, something else?

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Very nice. Actually, if you want to play it diversified, I did find an article about preferred stock ETFs. They are monthly distributions. http://slant.investorplace.com/2013/02/3-etfs-offering-access-to-high-yield-preferred-stocks/

Here's a question, though, and you should be able to discern this from your 1040 if you have preferreds: What are the tax implications on this? Are they considered ordinary dividends, qualified dividends, ordinary interest, something else?

i have preferreds in 4 different accounts. I have majority in my pension account and my profit sharing account. Personally I have only about 10 and they are all considered ordinary dividends. I have one getting called on 5/24 at $25 that i bought 9 years ago for $22.50 and have collected the 6.75% dividend for the entire time plus of course the gain of $2.50 per share. I am in the market to buy several now-but very recently it seems everyone has discovered them as a place to stash money and the selling prices are up about $1 per share for most. I will just sit and wait a bit-I have seen this before and every time the Fed even whispers about the possibility of an interest rate hike-they react with a quick knee jerk fall and offer a great opportunity to buy at a reduced price (sometimes not very dramatic but when you are investing strictly for yield, every 50¢ can be important). I have to stress though-this is boring investing. There is not much excitement to it-but I have done this for a long time and the rewards have been quite good.

 

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

i have preferreds in 4 different accounts. I have majority in my pension account and my profit sharing account. Personally I have only about 10 and they are all considered ordinary dividends. I have one getting called on 5/24 at $25 that i bought 9 years ago for $22.50 and have collected the 6.75% dividend for the entire time plus of course the gain of $2.50 per share. I am in the market to buy several now-but very recently it seems everyone has discovered them as a place to stash money and the selling prices are up about $1 per share for most. I will just sit and wait a bit-I have seen this before and every time the Fed even whispers about the possibility of an interest rate hike-they react with a quick knee jerk fall and offer a great opportunity to buy at a reduced price (sometimes not very dramatic but when you are investing strictly for yield, every 50¢ can be important). I have to stress though-this is boring investing. There is not much excitement to it-but I have done this for a long time and the rewards have been quite good.

Not too bad. At this point, when it comes to bonds and such, I've actually strayed away from the left-wing-definition-of-corporation sector and looked more towards personal and small business loans. You can find very high yields and also invest in a way that doesn't come under the ire of the Occupy wackos. Obviously there's a chance of default, but you do get to ask questions before you agree to invest. Typically, I'll invest in people who are trying to consolidate their debt; I usually don't invest in fancy weddings or home improvements.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Not too bad. At this point, when it comes to bonds and such, I've actually strayed away from the left-wing-definition-of-corporation sector and looked more towards personal and small business loans. You can find very high yields and also invest in a way that doesn't come under the ire of the Occupy wackos. Obviously there's a chance of default, but you do get to ask questions before you agree to invest. Typically, I'll invest in people who are trying to consolidate their debt; I usually don't invest in fancy weddings or home improvements.

Maybe it's just me being very pessimistic-but i honestly do not understand what is happening with the market right now. Things are just not that good enough to explain all this optimistic money coming in. I have put a little on the shelf for right now-not a large percentage but perhaps an extra 10%. I keep looking for the pullback since I just do not see things being as wonderful as many others seem to think. Jen and i get out and about a lot-we are in shopping malls, flea markets, restaurants, etc and the overall picture is just not as rosy as the media is painting it. If the unemployment rate in this country is 7.5% and if the inflation rate is truly 2% then I have a bridge in Brooklyn to sell. I mentioned before that it just appears to me like a house of cards.

 

[FadeToBlack&Gold]

Maybe it's just me being very pessimistic-but i honestly do not understand what is happening with the market right now. Things are just not that good enough to explain all this optimistic money coming in. I have put a little on the shelf for right now-not a large percentage but perhaps an extra 10%. I keep looking for the pullback since I just do not see things being as wonderful as many others seem to think. Jen and i get out and about a lot-we are in shopping malls, flea markets, restaurants, etc and the overall picture is just not as rosy as the media is painting it. If the unemployment rate in this country is 7.5% and if the inflation rate is truly 2% then I have a bridge in Brooklyn to sell. I mentioned before that it just appears to me like a house of cards.

I think a lot of this surge is fueled by people who feel they've missed out on the rebound and are taking a "better late than never" attitude.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

I think a lot of this surge is fueled by people who feel they've missed out on the rebound and are taking a "better late than never" attitude.

Absolutely agree. Plus many people finding that there is no other place to put money to get any sort of yield at all.

 

[Almington]

Absolutely agree. Plus many people finding that there is no other place to put money to get any sort of yield at all.

Plus, I think that many people have bought into the notion that if your in for the long haul you don't have to worry about valuation because eventually the stock market will go up. Which is incredibly naive and financially unsound.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Plus, I think that many people have bought into the notion that if your in for the long haul you don't have to worry about valuation because eventually the stock market will go up. Which is incredibly naive and financially unsound.

Very true. Same with real estate these days. Many people remember the days when you bought a house, any house, lived in it for 5 years and sold it for a big profit and moved to a bigger house. Just no longer the case and truthfully may never be that way again. The 'new' economy is different. No guarantees that anything will produce a profit in any given time period. There is money to be made-but it takes more effort and more research and you have to watch more carefully. Ane of course, you have to have more modest expectations.

 

[FlagDUDE08]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Very true. Same with real estate these days. Many people remember the days when you bought a house, any house, lived in it for 5 years and sold it for a big profit and moved to a bigger house. Just no longer the case and truthfully may never be that way again. The 'new' economy is different. No guarantees that anything will produce a profit in any given time period. There is money to be made-but it takes more effort and more research and you have to watch more carefully. Ane of course, you have to have more modest expectations.

Actually, our generation isn't even buying real estate. Too high on the property taxes.

 

[5mn_Major]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Very true. Same with real estate these days. Many people remember the days when you bought a house, any house, lived in it for 5 years and sold it for a big profit and moved to a bigger house. Just no longer the case and truthfully may never be that way again. The 'new' economy is different. No guarantees that anything will produce a profit in any given time period. There is money to be made-but it takes more effort and more research and you have to watch more carefully. Ane of course, you have to have more modest expectations.

A couple thoughts. The economy is not super...but its not bad either. The deal is that its a two speed economy. Unemployment is stubbornly high (and will continue to be so) due to competitive labor markets overseas. Yet corporate profits are doing just fine. In fact, businesses themselves are better structured than they have been in decades having cut costs and streamlined. The US just has a couple of great comparative advantages vs. other countries - entreprenurialism and business leadership. The risk here is bringing the deficit into line...but so far so good.

On real estate, IMO the tough thing is that loans are so hard to get. We went from EGAL (everybody gets a loan) in the 2000s to a pound of flesh today. In the end, houses in the good areas are in fact selling well (the exurbs is another story).

But where others choose not to buy houses...investors are. The average investor usually seems to either speculate, hoping to guess right by buying stocks (which is risky and time consuming) or lock their money up in gold. If you think the markets could be a bit high...then buy at your own risk. But often there is better return in real estate. To buy stocks and gold and sit on it...many lock their money up forever. In essence, they've given their money away because they never see it again. The important thing is getting solid income from your money. So you've got it locked up for a rainy day that may never come...and you actually do get some real benefit from it. Real estate does that as well as any investment and better than most (can be a 10% return), and is even better when their questions about other investments (stocks) prices.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Actually, our generation isn't even buying real estate. Too high on the property taxes.

That is indeed a major problem-and will only get worse as governments (local, state, etc) keep reaching for more money in new and inventive ways. Personally i would like to limit my exposure to taxes-which will only go higher. Anyone who believes otherwise is deluding themselves. I've owned various pieces of real estate for a long time and I just cannot recall too many times when taxes on any of these things have gone down. I can foresee a time when th epowers that be cannot reap enough money from real estate taxes and find ways to grab more from those who have assets.

 

[FadeToBlack&Gold]

Absolutely agree. Plus many people finding that there is no other place to put money to get any sort of yield at all.

After setting up my Roth IRA, I decided to wait for the next market fallout to setup other investment accounts. Can't be much longer than another year now, generally the crashes occur within several months after a new record is hit, when the big holders realize it's no longer economically sustainable and decide it's time to bail.

Real estate will never recover to its previous level, at least not in the lifetimes of people old enough to post on this board. That was all based on artificial inflation from bad loans handed out to people who could not afford them in the first place.

 

[DrDemento]

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

After setting up my Roth IRA, I decided to wait for the next market fallout to setup other investment accounts. Can't be much longer than another year now, generally the crashes occur within several months after a new record is hit, when the big holders realize it's no longer economically sustainable and decide it's time to bail.

Real estate will never recover to its previous level, at least not in the lifetimes of people old enough to post on this board. That was all based on artificial inflation from bad loans handed out to people who could not afford them in the first place.

I could not agree more. I listen to all the pundits on all the media outlets-but I live in the real world and shop in the Malls and supermarkets and believe my own eyes. The picture i am getting is not the rosy one being painted and fed to us. My own opinion is that we have reached the point where it is time to circle the wagons.

 

[Thecalkid]

After setting up my Roth IRA, I decided to wait for the next market fallout to setup other investment accounts. Can't be much longer than another year now, generally the crashes occur within several months after a new record is hit, when the big holders realize it's no longer economically sustainable and decide it's time to bail.

Real estate will never recover to its previous level, at least not in the lifetimes of people old enough to post on this board. That was all based on artificial inflation from bad loans handed out to people who could not afford them in the first place.

60 years is a long time!