the Stock Market

It's been a pretty wild ride the last couple of weeks. What do you all think the markets will do tomorrow?

Market stumbled, the big guys bought. If I had any ready cash, I would have bought. Market started to recover Friday. I think it will go back up this week.

One word..........

Ebola scare!

Okay, make that two words, duhh!

Ebola scare? Maybe. Personally, I think it was the big players messing around. Does that make me a conspiracy theorist?

As soon as the market went down where they wanted it, they bought. I put a bid in for more VZ. The ratios still look good. Management is solid. In this economy, a dividend of over 4 1/2 percent is sweet. But I don't buy in blocks fewer than 50 shares (no idea why, it's just my rule) and the price never went down to what I had enough cash in my trading account to pay. I should have dropped the greed and bought PFE.

I looked at investing in VZ in their drip program but the fees are a killer for small investors! $1 to $3 to have earned dividends invested, that would just eat up those dividends. But i'm considering Exon Mobil it seems like a good investment and they have a drip investment program also.

XOM ratios look good. 3% dividend isn't too bad. I don't suppose we are about to kick the oil habit any time soon and Exxon is slowly dabbling in products useful to alternative energy production. It has just won a $1.6 billions dollar case against Venezuela.

$91 is a little rich for my blood, tho. I have never done anything with a drip investment program except the div reinvest setup for my mutual fund. I'd be really interested to hear about your experience in it. I like to gamble (day trade) but it's time to be a bit more conservative and think long term holdings. Half the time I can't get on the internet, now, to see what the market is doing. That kind of situation is bad for playing around in it.

I like investing in stocks that offer drip investing, many have no fees.
http://www.directinvesting.com/
All your dividends are invested in more shares when paid out and you can invest in small amounts if you don't have a lot of money to invest at one time (if the price of the stock is more than the amount you invest then the amount will buy fractional shares less than 1 share). You have to buy 1 share of the stock through a broker in your name to start in the drip investment.

Yes, I will look at this. Not having a lot to invest at one time describes me to a tee. I budget a little play money every month. It adds up, but Warren Buffet would not be impressed. I'll have to see if I can switch existing stock into it.

---

Hmm. You want to watch those fees, Spirit. Depending on what you have to add each month, even at $2.50 a pop they can add up. The one time sign up fee accounts will still set you back $50. If you are young, it will be worth it. I'm sure the fee is tax deductible if you itemize. But if you are only kicking in with one share, and are making modest monthly contributions, it's going to take a few years before you catch up with that fee.

---

I didn't see what the fees were to sell.

VZ is not going down to where I can afford it. Bought some GE. Promptly went up a dime after I bought, but still not enough to pay the Scottrade fees ($7.00 to buy plus $7.00 when I sell).

Take a look at AT&T if you are interested in dividends. A squawk about cramming fees, but they will deal with that. Five percent div's are nice. Will probably be worth it even after interest rates start edging up.

---

Just an observation, if you are watching a solid stock you like that pays dividends, try to time your purchase or sell with the dividend cycles. A stock will usually go way up after a div is declared and way down after it is paid. The swing iscoften a lot more than the div is worth and may be the result of computerized trigger programs. For instance, VZ just paid its div early this month. Next one should be in January. If I wanted to sell, all things being equal, I would wait until the January div is declared. If I wanted to sell, it would not be now, right after the div was paid. It may be only a few bucks difference at my scale. But a few bucks here and there add up. The bigger your trade, the faster that adds up.

The market - in general - has been slightly overvalued for some time due to investor optimism. A correction has been expected for some time, and though the dip didn't hit correction level ( about 5% down today in the last six weeks). itdid bring some prices closer to their fair value. I expect the YTD to creep up until the end of the year to about 5% ( US market) and the January sell offs.

Some individual stocks may have, but I don't think the total market dipped enough to offer a true buying opportunity: the market is still slightly overvalued or near fair value.

All I got to say is...Thank you Edward Jones!!!.....and of course KuDo's to my financial adviser !

Not my cup of tea, but Mornigstar's Josh Peters spoke about these four dividend producing securities for a rising interest rate market. Thought I'd copy them here if anyone was interested.

SO
Southern Co
VTR
Ventas Inc
O
Realty Income Corp
HCN
Health Care REIT, Inc.

Personally, rather than relying on individual stocks, I prefer low cost index funds. Vanguard has several excellent core no load funds with extremely low ERs. Their ' investor share' class funds can have low initial investments which one can realistically save towards: about $1000. My average ER is .08%

Just fyi.

Beware the October effect. Google it.

Here you go. The October effect as it relates to the stock market.
https://www.google.com/#q=october+effect+stock+market

Conversely, the Santa Claus effect below.
https://www.google.com/#q=santa+claus+rally+stock+market

Caseyc

Those theoretical dips and and surges, as well as the old 'sell in May and walk away' adage - if they are of concern - are only so to market timers. There are several problems with market timing. With market timing, you have to guess RIGHT twice about the market: once when you buy, and again when you sell. The difficulty with using theoretical adages is that the market is not consistent - it may have trends averaging over a period of time, but it generally does not follow adages. Another problem with market timing is cost: every transaction, buy or sell, costs money. Cost deteriorates returns. A disregard of cost and a trending towards market timing are the biggest factors for people who fail in the market. Jumping onto 'hot stocks' is another.

Investing is a long term process, and for the average investor - which is most, if you listen to Warren Buffett - the best plan is a long term discipline of constant investment into a low cost index according to a planned asset allocation. Then, during the accumulation phase, every dip or recession becomes a buying opportunity, providing one does not succumb to removing funds or borrowing against them.

An investment portfolio is not an 'emergency fund'. That should be a separate account of a budgeted value, placed in stable value accounts: savings, short term Bank CDs, etc. the emergency fund is ones first priority - not investments.

Trying to make quick money is a fools dream, and I'm not suggesting that is your personal goal - just speaking in general. Someone occasionally gets lucky. The vast majority fail, and provide the funds for the lucky one, much like playing the lottery lol.

But, in general, markets both bullish bearish are part of the flow, and should not be a concern for long term investors; nor should theoretical adages, IMO.

Seraphim, I've been looking at stashing some in VFINX, myself. I like to play on the market, but I am getting to where both lack of internet and other things are making that harder. Scottrade requires a minimum of $3000 to buy a mutual fund. Now, I just have to figure out what I want to sell. I prefer to keep all of my stuff with one company while we're on the road. It is easier that way.

---

You are right about one's long term investments, Seraphym. I firmly expect my financial advisor to act exactly that way with our IRA's and the other funds we have with him. I know that he and the fund managers that invest my money are the pros and I am not.

However, I like to play in the market. I enjoy the game of it. It's a hobby, just llike other people like to golf or play computer games or collect stamps or go to casinos. I can play it in the rain, I can play it by myself, I can play it anywhereI I can get internet. I budget a certain amount every month and never play with money I can't afford to lose. That's important.

BTW, I have made quick money. Sometimes I am a wizard, like when I was buying up BP as fast as I cound when everyone else was panicking and selling. Sometimes I make horrible decisions, like that cultured pearl company based in Indonesia that was wiped out by a typhoon 3 weeks after I invested.

I do like to gamble. That's why I leave our main savings to the pros. I know well enough what smart, conservative, longterm investing is. I know how to do it. I can talk about it all day. What you say is correct. It just isn't any fun.

it was a good low this past week.....I bought more AT&T....Chevron & Phillip Morris!!

Good investing is boring lol. If you've set aside some money you can afford to lose to have fun with, then go for it. Nor am I opposed to taking advantage of a true buying opportunity. When the interest rate finally rise, if bonds tank in value, I'm ready.

Don't know your strategy, but frankly, I'm not fond of financial advisers. They are generally barely trained salesmen who are there to push a product line for an expensive fee; a 1% fee over twenty five years reduces your return by 25%. That doesn't include transaction costs or loads. An RIA on a fee based agreement is a good idea, especially when setting up an investment plan. Expensive at first, but much cheaper in the long run.

I consider very few of them 'pros'. They have no fiducial responsibility to you - they offer a set of options legally designed to meet your desire with no guarantee of success. At best, they are in a quandary between ethical behavior and offering you the plan which presents them personally with the greatest return. There are many plans out there to do what you want them to do. The difference in costs can be amazing, and I'll provide a personal example:

Overall, our current costs average .08% a year. That's TOTAL costs - no loads, no transaction fees, nada. DW took early retirement on a buyout, and the condition of the buyout was it would be paid over five years, and we had to deal with one of three FAs: pretty much the same deal. Turns out, only one fund company was available, to meet the contract no matter which FA I used - Oppenheimer. No no-load funds, all expensive.

The average ER for the Oppenhaimer funds is almost 2% on a backload option. Could have gotten a lower ER on a front load option, but since I planned on withdrawing the funds NLT the five year period, it was cheaper to go with the backload, which disappeared after a 1 year investment period. The only other option was placing it in a money market which would have maintained the value, but offer no returns. So, in a year or so I'll be taking that money out (and I'm sure there's going to be a frigging fee) and putting it into Vangaurd no-load funds at an ER of .06%.

For comparison purposes, in 2013 the equity Oppenheimer domestic fund returned just over 6% after fees. The same category Vanguard fund returned over 29%. (2013 was an exceptional year for the market). Confused? It's all about cost.

When I first met the FA and asked about costs, his reply was: "Oh, you don't pay me - the fund company pays that."

I darned near called him a liar to his face, but instead replied, "well, who do you think they get the money to pay you from? I'm paying your fee, merely indirectly. Now here's what I want..."

I get a little blunt when someone attempts to deceive me - and that statement was an attempted deception."

Anyway - time to get off my soapbox lol.

Wait - wanted to mention the Morningstar site, if you're not familiar with it. All they sell is data and analysis for a yearly fee. They have a free membership which provides a ton of information at no cost. They also have a college level course of information online for free, for anyway interested. I think the link is something like www.education.morningstar.com

Check it out. Morningstar ratings are considered golden information in the investment world.

---

http://www.morningstar.com/cover/Classroom.html

Here's the link. Thy make it difficult to find...

---

They have the classes broken into four groups: stocks, bonds, funds and portfolios. Each group is broken into levels, like college courses: 100, 200, 300... I recommend doing the 100 level in each group before moving to the 200, and so forth. Each lesson takes about 5 minutes to complete and has a quiz. I think there about 172 total lessons.

---

Vanguard has an education center - you don't need an account - but they seem to be pushing ETFs at the moment - again, not my cup of tea.


https://advisors.vanguard.com/VGApp/iip/site/advisor/etfcenter

I had Morningstar available at work. Haven't sprung for it, yet, since I retired. Thinking about it, tho. We use the FA right now since most of our savings are in IRA's and DH is leery of me (wonder why). As my play money builds and I am less able to keep a hawkeye on the market, I have decided to put some of it into a mutual fund. I like the S&P 500 accounts because the S&P 500 has outperformed almost all other ones over time and generally have the lowest fees. All I have to do is find a way to check one thing whenever I can. No more schlepping my tablet and hotspot up a hill on a dirt road in the dark at 6:00 AM and dodging cars and snakes for half an hour while I see what is going on in the market.

I am just going to have to play it more conservatively until we eventually settle down for a while. Sad. But the play account is building up and I am getting old. I am not as willing to lose as much of it in the game as I once was. The only way I can avoid that is to spend more time than I now than DH will put up with watching the market or to put some of it into more conservative investments. Conservative isn't as much fun as high stakes. I have been doing a little of it, but it's just not as much fun.