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merlin401

Why don't we turn our attention to the stock market?

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[soapbox]

400k certainly wasn't a starting point. That was an example of missing the extra doubling 400 -> 800k by delaying your start by not saving when you're young. 100k turns to 800k with 3 doubling(s) but only 400k with 2. Compound interest is so damn powerful. You don't get the extra doubling if you're spending your money on things that may not bring in wealth (i.e. cars etc.) and living beyond your means. Kaz gave some great examples of how to cut costs to free up investment funds.

I hammer on cars because that's usually the biggest purchase. It's funny, I live in a 4200 sq ft house. Everyone here drives those nice status cars. Escalades, Lexus, BMWs, etc. Meh ... Even if i won the lottery, I wouldn't get something like that. I drive an 11 year old Toyota Tundra. I'm pretty sure I will always have the crappiest car in the neighborhood, but it has utility and is still reliable. Financial flexibility, investment, and security trumps status.

Heard on the radio (Clark Howard show) about someone who bought a house in the 1950s for ~ 40k. They just sold it for 550k. It only rose 5% per year. Ballpark numbers 550k (2012) -> 275k (1997.5) -> 137k (1983) -> 68k (1968.5) -> 34k (1954). Not arguing about the value of houses, but Mr. Howard was pointing out the power of compound interest over long periods of time. That's why it's so important for young people to have the discipline to sacrifice and save.

[/soapbox]

6% isn't that hard to come by. I actually thought that was rather conservative. High yield stocks are certainly one vehicle to get there. To me, this market is no longer simply a buy and hold market. They call the 2000s the lost decade for a reason. I'm by no means a day trader, but I will shift money around based on what I'm seeing or hearing. Avoiding risk and loss in an overbought market is just as important as buying into a frenzy. I managed to miss the downside of the post-Y2k by sheer luck (I got married and bought a house --> asset transferal), but when 2008 came around and I was a bit more aware of the economy, I had moved a huge chuck of my retirement to safety. Missed the crash and rose with the tide in 2009. There's a local investment firm called streettalk advisors who has been pretty accurate. http://www.streettalklive.com/ They have a radio show that I listen to on the drive home to get the general pulse. Often publish reports through their website or via facebook.

As far as dividends, you are correct, the yield is just the function of the dividend / price of the stock. The reported yield changes daily with the stock price. The important number isn't the yield obviously, but the per-share-amount which may change over time depending on the management of the company. Good strong stocks tend to increase their dividends over time. VZ is a good example. You're yield is theoretically set based on your purchase price and only changes with a change in dividend. (Although if you have a DRIP, then your re-invested disbursements may change the yield over time depending on what price the stock was when the dividend was re-invested).

I usually hold these dividend bearing stocks as DRIPs in my roth account to avoid tax ramifications. I believe dividends are added in and taxed based on your AGI. Could be wrong ... I haven't paid tax on dividends in a couple years now. Other thing I do is find a stock that trades in a range and get in and out. I think that's the high waiver transaction / streaming starter rotisserie player in me. I've missed some profits getting out too soon and missed getting in too late ... sometimes missed the station all together. I don't do this with a large portion, just some to speculate with and have fun just like fantasy baseball.

If it takes an unexpected tumble, the good thing is that you don't lose until you sell ... and if you picked a stock with strong fundamentals, it'll come back (eventually). Lol.

Best regards

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I don't disgree with your mathematical equations.

I do disagree with your pretense that saving and investing will lead to great riches in your retirement.

The reality is, unless you have a job with a fat pension (union jobs, teachers, other gov't employees), the days of retiring at the age of 55 are over. You simply cannot dump enough money into the market to make it back when inflation kills the value of the dollar and the prices of the stocks fluctuate so wildly.

Before the crash of 2008, almost no one saw a problem with the housing market. Why, houses go up in value by 10% every year forever! Well, some knew it was a problem.

http://www.youtube.com/watch?v=2I0QN-FYkpw

I have been in a 401K for 7 years now, and I can tell you that Its worth is just over its cash value. (I would not contribute to this fund any longer but I receive 10% of my income from my employer. I also cannot withdraw it until I am no longer an employee.)

And putting the money into Roth's for tax sheltering, let me ask you this: With a federal deficit of nearly $16 trillion, how long before China stops lending the gov't money? Where do you think the gov't will look next to raise funds for its wars and welfare?

I am 35 and I and my wife realize that retirement will not be an option.

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Serious question.

With the amount of time and effort we spend on tracking baseball players and prospects, if we spent the same amount of time researching stocks, bonds, etc, wouldn't we be better off making a killing there than in a $30 league? The concepts are all the same. Buy low, sell high. You can watch your performance, which actually will be changing minute by minute if you so desire. There are strategies, analyst opinions, everything. For H2H guys, you won't get that high but essentially the stock market is like roto.

I've asked myself this question recently and don't see a reason why I would be spending so much time on baseball, even if I can win a few hundred at the end of the year. Thoughts?

had no idea there was a miscellaneous board on rotoworld...

ive been a member since 2006 and this is my first time here...haha

anyhows...

im a technical trader...meaning, i look into a lot of the "voodoo" of the market place and make trades based solely on charts...along with liquidity (volume) and how many shares outstanding (all of the good things that make a stock very volatile :)

i swing trade mostly and have a few long term holdings...i rarely ever day trade...in my younger years i did...but nowadays, i cant handle the stress

ive been making off like a bandit in the biotechs recently

most of my friends trade solely off fundamentals and think im nuts...but then again, ive seen people shorting this bull market get burned pretty badly

me personally...i find fantasy sports to be an analytic outlet...only so many hours you can spend looking at stocks/charts before you go mad

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I have actually thought this same thing, but frankly I do not know where to start. Do you guys have tips for novice stockholders? Maybe a good site with newbie information, or something like that? That would be fantastic to share.

its pretty difficult to "teach" someone how to invest...

its not that investing is difficult...it really isnt...its the "experience" of investing thats difficult because of the emotional quality tied to it.

ive been investing for about 10 years now and i can tell you when i first started off, i could make an easy 20% return within a week and thought i was king of the world, only to get my a** handed to me the following week and lose it all and then some.

my advice would be to get some "play money"...meaning, money youre not afraid to lose...dont play crap like "fantasy stocks" because you wont have the emotional quality of trading...i mean, its fake money...i would play it to become familiar with the trading environment...but i wouldnt pat myself on the back if i made a few good trades...one thing you NEVER want to be is over confident...because the market will rip you a new one

figure out the risk youre able to stomach....me personally, i love volatile and very risky stocks because they return the most...but you can also get your a** handed to you...but thats the reality you need to accept before hand

good luck

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