UPDATED January 2020
We have been involved in the stock/bond markets for almost 40 years.
Stock trading is risky and time consuming.
Contrary to what people tell you, the stock market Can be timed. But trading requires extensive training and knowledge, a lot of time, loads of discipline, and most importantly extreme patience, all of which most people do not have. The mechanics of trading are simple. But emotions and lack of patience very often take over, resulting in bad investment decisions and significant losses. IF you want to learn how to trade stocks, here is the best source that we have found: http://www.philsgang.com
We generally avoid trading individual stocks. We DO buy preferred stocks, ‘baby bonds’, REITs, Individual Corporate bonds, Business Development Companies and Closed End Funds. The Core Portfolio is primarily invested in these ‘bond like’ positions.
We own a large number of individual Corporate Bonds and baby bonds. We have had huge success in corporate bonds over the last several years but the yield has been declining. The baby bonds and preferred stocks, in addition to several other types of investments, now offer higher yield.
Dividend investing in select securities (such as individual corporate bonds, business development companies, and real estate investment trusts) is relatively safe and easy. You can purchase positions and hold them for literally years. You do not incur frequent trading charges, you spend little time monitoring your holdings, and the dividends come in monthly/on a regular basis with minimum work.
If you manage your own money, you should subscribe to financial newsletters that can provide good buy and sell recommendations (but most of them are losers!): it is MORE important to know when to sell and a good newsletter can provide you ongoing updates.
But…..we have subscribed to literally dozens of financial newsletters over the years, and have found very few that consistently provide good investing ideas on a long term basis. You can check out Kiplinger, SeekingAlpha.com, and Forbes for financial newsletters. Go to the links page to find a listing of very good websites.
Keep in mind that numerous newsletters with bad records are published and you need to investigate the entire field to make an informed decision before subscribing.
FUNNY AND SERIOUS QUOTES___________________________________________
Wall Street is NOT designed to make you money. Wall Street is designed to make money for Wall Street.
“If the next bear market drops 50%, and your portfolio drops 50%; and the market comes back at 10% per year thereafter (no small feat), it will take you 7.2 years just to get back to even. So, ask yourself this question: How many 7.2 years do you have left?” Mike Turner
“Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria.” John Templeton
“climate of fear is your friend when investing; a euphoric world is your enemy.” Warren Buffett
“Agreed, I never watch the Communist Broadcasting Station, nor the American Broadcasting for Communism, and the National Broadcasting for Communism…add to that the Communist News Network.” Comment about ‘network evening news programs’
“Two things are infinite, the universe and human stupidity, and I am not yet completely sure about the universe.” Albert Einstein
‘hope’ is a four letter word in the stock market
It’s the stairs up and elevator down. (stock markets)
“Fundamentals tell us ‘what’ to buy or sell, technicals tell us the ‘when.’” realinvestmentadvice.com
“It’s not easy to be as bad as they are. They are much worse than random chance alone would predict.” Salil Mehta talking about the Wall Street “experts”
IF investing was as easy as just buying a bunch of stuff and sitting on it, then why are so many Americans dependent on Social Security for retirement? realinvestmentreport.com
“The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.” John Templeton
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” Peter Lynch (Fidelity)
“If you don’t read the papers you’re uninformed. If you do read them, you’re misinformed.” Mark Twain
“You cant get rich in politics unless your crooked.” Harry Truman
“Justice” has become “just us”
The markets take the stairs up, but the elevator down.
“It’s better to be out of a bull market, than fully invested in a bear market.” Dick Russel
Buy-and-hold is an excellent strategy if you plan to live forever and never need your money. Otherwise, the best strategy is an actively traded, market-directional approach. Mike Turner
but as Will Rogers once said during the Great Depression – “I’m not so much concerned about the return on my money as the return of my money.”
“It wasn’t raining when Noah built the ark.” – Howard Ruff
“You have to think anyway, so why not think big?” Donald Trump
The most advanced skill you can develop as an investor is simply the emotional discipline to be incredibly patient. Porter Stansberry
They aren’t over the moon about Barack Obama anymore, and even feel burned. He was like a razzle-dazzle trailer that turned out to be a disappointing movie with mediocre box office.
“opinions are like ***holes, everybody’s got one.”
For the second year in a row, President Barack Obama has made it onto GQ magazine‘s list of the least influential people.
The stock market in general has often been described as the world’s largest unregulated casino.
Social media makes regular people feel important
The difference between a good trader and a great trader is PATIENCE.
But, for now, what Republicans say about government is true of the Clintons: They really do believe that your money belongs to them.
One of my first bits of advice to young investors is to be humble about your investing/trading abilities, because if you are not, markets will soon make you so.
JELLO sales are down 19%: hard sugar water with fake coloring.
“Trouble started today with AT&T. I hate AT&T. It obviously stands for Always Terrible Transmission.” From Joan Rivers new book Diary of a Mad Diva.
“And realize that the journey to millions of dollars is earned $100 at a time.”
Let’s say what FROOT LOOPS really are…..gay Cheerios. (Bill Maher)
Margaret Thatcher: “…and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.”
“I’m stupid but I have a smart phone.” (ESPN)
“Why am I still getting a phone book?” (Bill Maher)
If you’re nice to somebody they tell three people: if you’re a jerk they tell 10.
“It looks like cotton candy made of piss.” Donald Trumps hair from Penn Jillette’s book Every Day is an Atheist Holiday
Funny Line of the Day: “The first lesson you learn as a pollster is that people are stupid.” (This Town, Leibovich)
What do you call 535 idiots locked in a building. Congress.
The definition of a consultant? A person who knows 250 sexual positions but doesn’t have anyone to have sex with
If you want a stock to go down, buy it.
(Quote on the Web) “CNBC is for traders, not investors. It’s mostly about entertainment. Serious investors don’t follow this nonsense.”
BIGGEST MISTAKES INVESTORS MAKE
Buying annuities. Probably the biggest scam going. They take your money, skim off their huge commissions, and return your money in dribs and drabs. Don’t even think about buying this junk.
It is easy to buy investments based on Cramer, tips from friends, online chat rooms, email programs that sell positions in odd companies, a crystal ball……whatever. The Biggest Mistake people make in investing, is NOT knowing when to SELL. If you do not have the knowledge to determine sell points, you MUST have an advisor to suggest when to sell. There is nothing worse than holding a losing position, long after you Should have Sold.
People do not have patience. They want to buy when they want to buy. In the investing game, you have to wait for the market to come to you. In other words, you must wait for the right price, not when you want to buy it.
People tend to buy at the ‘highs’. Do not buy at the highs. Buy when there is blood in the streets. There is nothing better than buying a good long term dividend paying investment at cheap prices and watching it go up in price and also getting the dividend.
People fall in love with a stock. Despite terrible news on a position, people do not sell. They refuse to admit they made a mistake in buying the issue. Do not make the mistake of holding on. If there is a problem, get rid of it. The news usually only gets worse.
Investing in dividend positions can be very boring. You can typically identify trades days or weeks in advance. Making quick decisions on intraday blips usually typically end up as bad decisions. You never have to hurry in this business. (Obviously day traders are closely watching the markets thru the day. But we are not day traders.)
A huge mistake is waiting too long before you start learning about investing. You need to start saving as soon as you get out of college (even if it’s only a few bucks) and you need to start investing at the same time. Another big mistake is sitting in CD’s and money market funds.
People sit in cash. The shock media may make them nervous. Or they may just be the nervous type. Sitting in cash is a terrible mistake. There are numerous conservative investments out there that pay reasonable dividends. Worst case, buy CDs and Treasuries.