Today's Market
by Dr Invest
Today, I will be investing in two ETFs: TIP and BND. If you are completely unaware of the on-going investment strategy I am using, begin reading this blog from May 1st.
STOCK DIVIDENDS
About stock dividends: I like them, but when there is a chance for a drastic downturn in the market, you could lose 20% to 40% of the value of the stock with a dividend of only 6%. This is not the way to make money.
As of today, the DOW JONES is lower than where it began in January. If you were bragging about staying in that stock mutual fund and the 12% you had gained, you now will be back to the original value of your portfolio.
As explained in the previous blogs, I have expected the DJIA to climb some, but as I also said, "bad news" could keep the market down. The bad news has been so over whelming, that the market just hasn't recovered. I expect we will hit the lows of last year.
If you are wise, you will be overly cautious and only take gains you know are possible. Eventhough gold may rise, for a number of months, it has been down. I would avoid gold like the plague. I couldn't enjoy an investment that could lose 1/3 to 1/2 of its value now, even if it went up 200% in the next four years. Just from an emotional stand point, it is not worth losing sleep over or becoming overly stirred up by temporary losses.
There are BOLD traders, and there are OLD traders; but there are no OLD BOLD traders. This is the bottom line, I am not going to attempt to make 20% more with higher risks of loosing 20%, when I can take lower risks and be reasonably certain I can make 10%.
Another favorite saying is: It is better to be out of the market wishing you were in, than to be in the market wishing you were out. Before I enter the market, I want to know that the trend is moving upward.
(note: the above information is for entertainment purposes only and not to be used for financial advice.)
by Dr Invest
Today, I will be investing in two ETFs: TIP and BND. If you are completely unaware of the on-going investment strategy I am using, begin reading this blog from May 1st.
- I am using the Ivy Portfolio System
- I am investing $10,000.00 for illustration purposes
- I divide the $10,000.00 into three parts
- One part is set aside for CASH, another for BONDS, and another for STOCKS
- I will only invest when I am most likely to increase my earnings
- I will sell when my investments are most likely to decrease
- I sold my stocks in MAY and bought BOND Positions in TIP and BND in MAY
- The 1/3 set aside for BONDS was itself divided into thirds. I invested $1,111 into TIP and BND on the 2nd of May, I will invest another $1,111 into TIP and BND on June 1st, and yet another $1,111 into TIP and BND on July 1st, when I will be full invested into bonds.
- I will use a stop-sell on all purchases of TIP and BND of 3% below the purchase price.
STOCK DIVIDENDS
About stock dividends: I like them, but when there is a chance for a drastic downturn in the market, you could lose 20% to 40% of the value of the stock with a dividend of only 6%. This is not the way to make money.
As of today, the DOW JONES is lower than where it began in January. If you were bragging about staying in that stock mutual fund and the 12% you had gained, you now will be back to the original value of your portfolio.
As explained in the previous blogs, I have expected the DJIA to climb some, but as I also said, "bad news" could keep the market down. The bad news has been so over whelming, that the market just hasn't recovered. I expect we will hit the lows of last year.
If you are wise, you will be overly cautious and only take gains you know are possible. Eventhough gold may rise, for a number of months, it has been down. I would avoid gold like the plague. I couldn't enjoy an investment that could lose 1/3 to 1/2 of its value now, even if it went up 200% in the next four years. Just from an emotional stand point, it is not worth losing sleep over or becoming overly stirred up by temporary losses.
There are BOLD traders, and there are OLD traders; but there are no OLD BOLD traders. This is the bottom line, I am not going to attempt to make 20% more with higher risks of loosing 20%, when I can take lower risks and be reasonably certain I can make 10%.
Another favorite saying is: It is better to be out of the market wishing you were in, than to be in the market wishing you were out. Before I enter the market, I want to know that the trend is moving upward.
(note: the above information is for entertainment purposes only and not to be used for financial advice.)
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