Great estates may venture more, but little boats should keep near shore. Benjamin Franklin
In the following sections I write about my general investing experience and what I've learned. There is a list of my (reasonably) current investments, and external links to reference web sites I've found interesting or useful (note: external sites are not under my control and I am not responsible for their content or behavior). Some of these external sites aren't about investing; but the information on them can affect your credit ratings, and your employment prospects, so I choose to include the sites in this page.
My Investing and Money Management Experiences
A feast is made for laughter and wine maketh merry: but money answereth all things. Ecclesiastes 10:19
Currently, like a lot of people, I'm investing for my eventual retirement (June 17th, 2025), which gives me a reasonable time horizon to ride out market fluctuation. I have chosen to use savings, insurance, bond funds, mutual funds and individual stocks to control financial risks and bring growth and diversification to my portfolio. I follow a plan of long term value investing, long term being defined as looking ahead more than three years. To date I have had some success (because the general market has been doing well) and some failures (anyone want World Com shares or bonds?). Overall there have been more gains than losses so I have nothing to complain about. I didn't start out knowing much about the market. Rather it has been a process of educating myself, working diligently at my chosen career, and careful financial planning.
In looking back over 20+ years in my career and my time spent gaining an education, I realize that I've been investing in more than stocks and bonds. I've been investing in myself. First, I invested in myself by going to college and studying for my future career. Education and good grades are not do not always translate into great jobs, or into a person doing their job well; however, from my individual perspective, education is a good way to prepare for an unknown future and from an employer's perspective, grades are a way to see if the candidate has a consistent track record of working hard for a long term goal. Education laid the foundation for my career, and vastly increased my career opportunities and earning potential.
I don't accept financial or intangible benefits from anyone. I do partner with, and recommend, Giveaway of the Day. If you need good software at a great price (yep, available free for a 24 hour period, no free upgrades or technical support) this deal is for you. I've downloaded tools for disk partitioning, 3D home modeling, screen savers, etc. The installation isn't difficult and the software is a fully functional commercial version, no criple or trial ware.
I'll be the first to admit I'm not a professional financial adviser, career councilor, money manager, market analyst, or stock broker. I have no professional training in financial or investment matters. Any advise, suggestions, or comments, are my personal opinion and may not be suitable for you and your financial situation. No one, including myself, can guarantee the future performance of any investment. Investing in any financial instrument always has an associated risk. You could loose part or all of your money, and in some types of investments you could loose more than your initial investment. Only you can determine where and how to invest your money. It is your responsibility to make your own informed investment decisions and to accept the consequences of those decisions.
I first became interested in investing because my mother took a college class for her degree. While she studied, I'd help by quizzing her on the various terms and their meaning. I learned about interest rates, the "Rule of 72", and the use of a long time horizon when investing. Later (when I was looking at colleges to attend) I got to play a stock market simulation that brought back some of what I had learned. Despite all this knowledge, much of my time after college was spent trying to stay ahead of the bills and paying off the loans for my car and my two year degree in electronics.
After college, I went to work at a good paying job, but no matter what I did, there was always something that seemed to eat up any additional money I had at the end of the month. I tried getting a second, after hours, job and while that did add more income; it wasn't enough to meet unexpected expenses that sometimes occurred (i.e. car repairs, etc.). Eventually I decided to go back to college and get my B.S. in Computer Science, then later an M.S. in Software Engineering. These increased my earning potential; but also put me in a lot of debit for student loans.
While I was at the university, it seemed at first, that investing in myself wasn't leading to a lot of financial progress (later that perception would prove very false). Worse yet, I began to feel like all I was doing was working and studying all the time. To cheer myself up, I would go out and splurge on items I didn't need. This would set back my financial plans, and again I would feel like I wasn't making any progress towards my goals.
After graduation, I paid my school debits, little by little, and saved some money; but progress was slow and there were times when money was very tight. It wasn't until I was about 35 that I really sat down and began to seriously think about my finances for the long term. Finally I had a stroke of great luck. I needed to move some money from a small 401K I had started and didn't know what to do. My Mom suggested I talk to her economics professor, who was now her broker, and see what he recommended. That was the real start of a serious financial plan because it got me to educate myself in what makes a good financial plan. I listened to my broker's advice, did a lot of reading and made more mistakes along the way; but that is part of the learning process and because my borker often suggested I make small investmentsr in risky ventures, I didn't loose shirt.
I knew I made good money, but somehow I wasn't managing to save enough to make buying a house or retirement possible. I knew I had to do something or I would never reach my financial goals. I began to look at everything I was doing and what was working as far as my budget and savings plan was concerned. I found that keeping my debits low and saving a little each week worked. I had set aside a fixed amount to be transferred into my savings account automatically each pay period. As a result my savings grew and because I didn't have to think about it, I wasn't tempted to spend the savings. I wasn't reminded all the time that the money was there. I also learned to keep my wants under control, and my needs few. This made keeping my debits under control much easier. In the end, I wrote this web site to encourage others to educate themselves and set up a good financial plan so they can reach their goals as well. Here's what I've learned as my first step towards financial freedom.
Get rid of your debits, especially credit card debits. Most debits drain your earnings away and don't give you anything in return. The only debits that don't do this are debits for your house and for your education. Both of these assets will appreciate if you are careful to keep them up to date. Save for the things you need and avoid buying unnecessary things you don't need just because you want them. Keeping up with the Jones leaves both you and the Jones in bankruptcy. Plan for the expenses you know will be coming up. Your car won't last forever; but once you pay it off, keep putting the monthly payment away so you have a good down payment for your next car. After a while you'll find you have enough to pay cash up front for your car and the interest you would have paid to the bank, becomes your savings from now on.
While a savings account is a great (and fundamental) place to start, it won't be enough for your retirement; you need greater gains than a bank can provide if you are going to retire comfortably. Investors should be cautious, come up with a plan for their financial security, and educate themselves on how the market works. When I began to put together a stock portfolio I made sure I had money put aside in my savings account, all my credit cards were paid in full each month, and I owed only on my mortgage and car lease. It didn't make sense to me to invest in something that might give me an eight to ten percent return if I owed money on a thirteen percent (or more) credit card. I would still be loosing 3% on what I owed. Clearing up any debt and starting a saving plan became the first step toward my financial goals.
All of this debit management paid off in 2006. While driving to work, my car was struck by an SUV. No one was hurt; but my car was totaled. The other driver was at fault and her insurance agreed to pay for my car.
The insurance company made an offer of $3,800 which seemed low to me. I searched the Internet for similar cars to mine and found 35 cars (with the same make, model year, and accessories). I charted the mileage .vs. price in Excel and did a little statistical data analysis. The result was a chart with data points for each car sold, and a line showing how the average price of the car changed as the mileage increased. The chart showed the market price for my car was about $7,000. I discussed this with the insurance company and their next offer was a little higher; but was still well below market value.
The insurance company asked that I return the rental vehicle they'd provided (as a tactic to pressure me to settle). What they didn't know was that after I'd paid off my car, I continued saving the monthly payment amount each month (for several years) so I could pay cash when I bought my next car. I needed a car immediately and had almost enough in savings, and used my credit card (until I could arrange for a bank loan), to buy a replacement car without their immediate payment. Because of my savings and good credit, I had options. I returned the rental car and let the insurance agent know I had already replaced the destroyed vehicle. Since we couldn't agree on a value for my old car, we would each have to present our data to the state arbiter (Texas requires arbitration) and let him/her decide who had the better valuation. Texas requires price estimates to be based on actual sales figures. My charts were from actual sales while the insurance company's low ball estimates were not.
After seeing my chart and the data, the agent agreed to a fair price and I got a check for $6,800 that afternoon. Combined with the money I had been saving, this more than covered the price of the new car. The $6,800 went into my savings and I paid off the credit card in full at the end of the month. I earned interest on the $6,800 from my saving account, 15,000 air miles because I used my credit card, and didn't have to pay interest on the short term loan because I always pay off the card in full each month. I ended up with a brand new, fully paid, car out of the deal. The moral of this story is that bad things will happen; being financially prepared means you won't be backed into a corner. You'll have time and credit resources to make good decisions.
My second step was to venture into the stock market and buy shares of mutual funds in my 401K so I could take advantage of my employer's matching funds. I had used a 401K before; but now I had a broker who helped me pick from the list of funds available to invest in and who could make sure I didn't have overlaping investments in different accounts. This kept me from making financial mistakes like buying more than one fund that tried to match the same index. Why should I pay multiple fees to different funds for the same performance? I also bought shares of my employer's company stock because I could get them at a 15% discount to the market. All this meant I was getting tax favored investments, discounts, or matching funds, essentially free money to me. Next I started investing in a Roth IRA and fully funded it. I also established a roll over IRA so I would have a place to put money from my 401K when I left one job and moved to another. I really like having my investments in tax favored accounts. Unfortunately I still didn't know the difference between a good stock or mutual fund and one I should avoid. I also didn't know much about how to value stocks.
The next step in my plan was to start reading up on money management, stock valuation, mutual funds, and the market in general. I asked questions or my broker, learned about reinvesting, compounding, and the "Rule of 72", and was surprised at how even a modest investment could grow large over time. I took classes at the local community college and learned as much as I could. I also spoke with my family's broker (who was my broker by this time) who graciously gave of his knowledge and time freely. Eventually I began to gain an understanding of the markets and what represented a long term value investment and what was just the latest hype driven stock. I also began to really see that financial planning involved more than just the stock market. It involves a broad array of financial categories including making a will, personal long term savings, insurance, and market investing. Since I had no dependents most of these decisions were easy. I drew up a simple will and made sure my life insurance would pay enough so my extended family wouldn't be burdened financially. I took enough medical insurance to cover me in case of emergency, and made sure there was money in the bank to cover the deductibles.
I reviewed my car, home, medical, accidental death and dismemberment, and life insurance. For some people, insurance decisions can be a very emotional issue and they feel the amount of life insurance they choose indicates how much they love the individual. Salesmen use this particular emotional button; especially so parents will buy large life insurance policies on their children. I learned that life insurance is intended to replace lost income or services to the family so insuring children for more than a minimal amount was not wise. The money you save in premiums can be better used to plan vacations or do things with them while they live. Similarly health and accident insurance should protect you against medical costs and replace lost income. Take only the minimum insurance necessary to cover your liabilities and if you have savings, choose a high deductible policy to reduce your yearly costs. Put the premium savings to work for you by investing them instead of paying them to the insurance company.
Lastly, I took a look at my financial plan and tried to find ways to improve the performance of each part of the plan. I decided to do two things. First I would put aside some long terms savings, and second I would try to find a way to improve my returns in the stock market beyond just waiting for capital gains and dividends to build up. I decided to put my long term savings into Certificates of Deposit (CDs) and I spoke to my broker for his advice. After living through two high tech jobs that had significant levels of layoffs, I wanted to be prepared if the worst happened. I had seen a lot of my friends and colleagues have to deal with financial hardship and I wanted to avoid that situation if possible. There's nothing worse than having to take a job you don't really like just because you're addicted to eating and living in-doors. Your goal should always be to have a career, not just a job.
I choose to set up a series of CDs (called a ladder), with enough money in each CD to make my monthly house payment for up to two years. I choose CDs because the principal would be FDIC insured, and the money wouldn't be sitting in my savings account where I might be tempted to spend it. This plan would give me an improved savings return and still give me access to the cash in case of a dire financial emergency. I also have the peace of mind that my house is secure if my income is interrupted for a significant length of time. Setting up the plan took six months and didn't drain my saving significantly because I had enough in my personal savings account to fully fund the project and still have a financial emergency reserve.
I set the ladder up by buying a two year, one year, and six month certificate each month for six months, putting the same dollar amount in each certificate. On the seventh month the first of the six month certificates matured and I rolled the accumulated money into a two year certificate. I continued to do this until all the six month certificates had matured. The next month the first of the one year certificates had matured and I repeated the process over again for the one year certificates. In the end I had two years worth of house payments available with a certificate maturing once each month.
My broker suggested several high yield bond and mutual funds. Normally "High Yield Bonds" is code for junk bonds; but I had already told him I wasn't interested in junk bond funds. His recommendation was for a well managed bond fund that focused on short term corporate property bonds (thus the higher interest and dividends). The bond fund had a track record going back many years and after reviewing their return and holding, I decided to accept his advice and bought into two bond funds (never put all your eggs in one basket). After looking over the mutual funds, I also choose to put my IRA and Roth monies in some of the mutual funds he'd suggested. I've been pleased with the results.
To improve my portfolio returns I once again spoke with my broker, read books, and especially read the material from the Chicago Board of Options Exchange (CBOE) on trading options. The CBOE's little pamphlet gives a concise explanation of calls and puts and explains, in excruciating detail, the advantages and pitfalls of trading options. It's enough to turn your hair gray. I decided I would only write covered calls to start with. This gave me time to become comfortable with trading options and I would have my risks covered. Later, as I became more familiar with options, I began using puts to safeguard some volatile investments, and as a means to improve the returns on stocks I already owned. I could also use puts to average down my purchase price should the put be assigned. This meant I had to make sure I had plenty of savings to back up my obligations, but savings was already part of my financial planning and I was very careful to limit my exposure to what I could actually afford.
Here's the basics of what I learned through all this:
You arrive home one day and there's a message on your answering machine or an email in your in-box waiting for you.
"Hi John, I checked and United Amalgamated International Widgets LLC is announcing their big defense contract on Monday. I'd advise you to hold on to your shares until then. You'd be smart to take a bigger position if you know what's good for you. This contract could easily double the company's profits. It's gonna go through the roof, a guaranteed winner, and you'll kick yourself if you don't jump on a sure thing like this. Call me later..."
You rush to the web and sure enough United Amalgamated has been trading up over the past few days. You figure someone must know something and you'd be a fool not to get in on the action. You buy 10K shares (on margin or course), sit back, relax, and start muttering "show me the money." thinking your ship has finally come in.
Congratulations, you've been scammed. Someone from a boiler-room bought the stock and began placing thousands of calls and sending millions of emails hoping to convince a sucker to buy on a hot inside tip (never mind that trading on inside info is against the law). If they can convince a few hundred such suckers to start buying into a penny stock, the price goes up and they can cash out with big winnings. You get stuck with a stock that falls like a rock. Who can you complain to, you've traded on inside information. At best you can look for a nice long SEC audit of your records, and at worst you get to pay a hefty fine and have a Martha Stewart look-a-like as your cellmate.
Don't stupid. Call the police, your broker, anyone you know and report the phony contact. You may help catch a thief before they steal your own or someone else's life savings.
I don't believe the laws of supply and demand have been repealed, or that there is a new principal governing the market making it impossible to loose money, nor do I believe day trading will increase anything but my taxes and commissions over the long term (see video on The Crash of 29). The only people day trading ever made rich are in your brokerage house. Today's market is governed by the same supply and demand factors it has always responded to. We just happen to have an unusually good confluence of random factors (i.e., we're lucky) before the year 2000, and a very poor corporate performance and regulatory oversight from that point in time until 2005 (I'm not exactly thrilled with the regulatory oversight since then either). Which brings me to the point about taking responsibility for your own investment decisions, protecting your investments with stop loss orders or put options, and keeping your portfolio diversified. Trees don't grow to the sky and a market rally won't go on forever either. The general population is investing for their retirement, at the same time their kids are completing college and so money is available to invest which was not previously available. This won't continue indefinitely. My view is that the stock market will continue to accumulate money until the Baby Boomers begin to retire and draw from their investments. After that point in time the market will probably level out for an extended period. Interestingly enough the S&P 500 has a very positive correlation (they go up together) with the population; so keep your eyes on the general census.
My personal philosophy of investing is to favor a diversified, long term (more than 3 years) growth and value investment rather than try to time the market or day trade. I choose investments by looking at the company's products, market ratings, quarterly and annual reports (10K and 10Q), and especially at the balance sheet. I generally seek stock investments in companies with low amounts of debt, low Price to Sales ratios (P/S around 1.5 or less), and low Price to Earnings Growth ratios (P/EG's near 1.5 or less), good Price to Earnings ratios (P/E below 17), and I love companies with a good dividend. I'm a strong proponent of compound interest, Cost Averaging (DCA), and Dividend Re-investment Plans (DRiPs). Anytime you can buy a sound company's stock over time, and use the power of compounding and dividend reinvestment, you have something you should seriously consider buying. If you don't understand what the company does, or you don't understand the company's financial picture, don't gamble your hard earned money away. You should always know why you bought stock in a company, and if the reasons you bought change, you should consider selling and finding other investments.
Never make stock market predictions. There are better qualified professional analysts who do this for a living and they are right so little of the time, I figure they don't need the competition. Predictions also involve a certain level of self deception or personal bias. The market is the market, you can't force it. It's random in its day to day movement and predictable only over long periods of time. The best plan is to buy a value stock and hold for the long haul gains. I won't buy a stock on speculation and I never buy on margin (at least not yet).
What is a value investment? As I said before, I like companies with low debt, decent dividends, and good growth prospects. If you buy a value stock that drops severely, ask yourself why it dropped. If the reason isn't related to company financials or scandal, but because of overall market panic, this may be a great opportunity to use DCA. Even a stock that has lost money because of slowing sales can show a profit if you use DCA, a Dividend Reinvestment Program (DRiP), and hold the stock until it begins to recover (though you may have to hold for quite a while). DCA and DRiP will lower your costs while raising performance over the long term. If a stock drops because of imaginative accounting or other evidence of dishonesty, take the loss and drop it like a hot rock. Such stocks aren't a value waiting to recover; they are a stinking pile of [euphemism] you can't run away from fast enough. Most of all never overextend your risk. Remember, "He who sells what isn't his'n, must buy it back or go to prison." [Daniel Drew]; Always understand the consequences of your financial decisions and remember you must be prepared with a recovery strategy should your plans fall through.
I would strongly urge you to do your own careful research and consult with a qualified investment professional or financial planner. Good financial planning isn't a matter of luck; it's a matter of knowledge and discipline. If you're not comfortable with the first few advisers you speak to, keep searching until you're satisfied you've found one who is qualified and listening to your concerns, needs, financial situation, risk tolerance, and goals. Make sure your adviser has the proper credentials and accreditations to advise you (CPA, RPS, CFP©, AAMS, member NAPFA, etc.). Your state may require financial planners to be licensed. If your adviser doesn't have the proper training and credentials you have no assurance they weren't a used car sales man last week. In most states the term "Financial Planner" or "Financial Manager" is just a job title. It doesn't mean the individual actually has an understanding of the markets, investing, or investment tax implications. It's very easy to be overwhelmed with technical jargon. Be sure any investment adviser explains his or her self and their actions. If they don't, ask questions, take notes, review the prospectus, read books, do whatever it takes until you understand the subject and are prepared to make your own decision. Once you've found a good adviser, listen carefully to their advise.
Never deal with a broker who cold calls you with a hot tip. These individuals may flatter you and make you feel like a big shot, but they don't know what your investing goals are, and they don't care. Benefiting you isn't their goal. They just push the stock pick of the week from their brokerage, and all they care about is selling the most (of whatever junk stock they have) and wining a nice sales bonus or a cruise to Hawaii on your dime. These brokers work in the investing equivalent of a boiler room making call after call hoping to get someone to bite on an investment that probably isn't appropriate. They usually make no real effort to determine your market goals, risk tolerance, or the investment's suitability for your portfolio. Dealing with these financial vampires will definitely leave your portfolio anemic. You'd be far better off creating a long term financial relationship with an established adviser or broker you've carefully investigated and who's ethics you know you can trust.
Review your account on a regular basis, especially after you've made decisions to execute a trade. Even an honest broker occasionally mis-executes a trade. If you find something was not executed as your ordered, contact your broker immediately. Your broker should correct the problem at no charge and execute the trade as you ordered absorbing any loss or fees themselves. Be very suspicious of any unauthorized trading activity in your account, especially if the unauthorized churning of your account generates (possibly hidden) fees for your adviser. It is your obligation to notify the brokerage of this potentially illegal activity. Be prepared to grab your money and run like the wind any time you hear a financial adviser "guarantee" any (Golden, can't loose, etc.) opportunity that can "make you fabulously wealthy". Even Government Bonds have risks (inflation, internal overthrow, debt repudiation or default, etc.). There is no such thing as a risk-less investment and the higher the risk, the higher the rate of return (should be).
Re-balance your portfolio as often as necessary. Don't trade excessively; but never be afraid of taking your profits from an investment that's done well. If any investment becomes an overly large percentage (in terms of dollars) of your portfolio, you should rebalance your portfolio, take some of the money off the table and reinvest it elsewhere. Always be aware of your gains and losses when you rebalance. How often you rebalance is really up to you. Many people choose to rebalance their portfolios each quarter; others do it once per year. I recommend you do it as often as you need to. If an investment has grown from 10% to 20% of your portfolio, sell enough to get bring the investment back down to the 10% level, regardless of when you last rebalanced. Like wise, if you have an investment that has a 20% gain, take some of the profits off the table and use the money to further diversify your portfolio by investing in another company or sector of the market. Don't ignore tax implications and wash rules however. Selling a stock in a taxable account on Dec 31st means you have to pay the taxes by April 15th of the following year. Selling that same stock on the first trading day of the New Year means you, again, don't pay taxes until April 15th of the following year. By delaying the sale a few days, you gain an extra 12 months to use the tax money (wisely). The same applies if you need to claim a loss, selling on or before Dec 31 means you can claim the loss on this year's taxes, waiting means you must claim the loss on next year's taxes. If this seems complicated, find a professional tax preparer and use their services. Also don't forget that buying or selling a stock in any 30 day period is considered a wash transaction. It doesn't matter what order you do the transactions, or if you have some shares you've held for more than 30 days and you wish to sell those shares. Generally, as far as the IRS is concerned, most same stock buys and sells within any 30 day window fall under the wash rule even if the sale and purchase are done from separate accounts (such as a taxable investment account sale at a loss, and a Roth IRA purchase within 30 days before or after the sale).
Investing in the stock market may involve learning some new vocabulary. It is important that you understand what you are doing and how your decisions can affect your investments. If you don't understand a term, never be afraid to ask your broker to explain what they mean. For example, the terms stop-loss and stop-limit sound similar but are two different ways of setting an automatic selling point for your stocks.
If you have a stock that you bought at $10.00 and it's now at $80 (say something like Lucent Technologies before the bubble burst). This is a gain of about 700 percent. There are three things you may choose to do. First you can sell shares immediately and take some of your profits off the table. Second you can set a stop-loss order to sell when the price falls, say 10 percent. Lastly, you can set a stop-limit order to sell when the price falls 10 percent.
If you sell the shares and take your profits now, you lose out on any possible future growth (in the case of Lucent, there wasn't any future growth to be had). If you set a stop-loss order, your shares will be sold when the share price falls to $72.00/share or below. A stop-limit order will sell the shares once the stock price has fallen to $72.00/share or below, and returned above your limit price. If the stock stays below $72.00/share a stop-limit order will not be executed. If the stock does recover, a stop-loss order will have locked in a greater loss. Each type of order has it's own use.
In the case of Lucent, the stock fell from around $80.00/share to around $50.00/share literally over night. A stop-loss order would have sold at $50.00 while the stop-limit order would not have been processed until the share price had risen back above $72.00/share (which did happen briefly a few weeks later). For the sake of your portfolio balance, always be sure you understand the types of trades you are using, their risks, and how they may affect your profits and losses.
Always keep a record of any financial statements or letters your financial adviser mails to you, or you mail to them. It's a good idea to keep your records separated by account, and year. I keep my records in several notebooks, which are locked in a fire resistant home safe. It's also a good idea to keep copies of your records in a second location, such as a safe deposit box. If there are any future question about your investments, or you have to go over your accounts, everything will be in an easy to find location, even if your primary records are destroyed.
I try to take a long term view on any investment and not let the immediate emotional considerations dictate where I make my investments or when I buy or sell. Never fall in love with any stock, the stock will never love you back and that's a good recipe for a broken heart (and bank book). I usually buy a stock using a limit order, setting the price a little lower than the current price, rather than buying at market. On some of my investments I write short term covered calls (three to twelve months out) with a strike price at least 20% higher than I paid (after commissions). This means I get an immediate boost to my portfolio (the money I get from selling the call) and should the stock rise 20% above my cost (and my option is assigned) I get to reap the profit and then decide if I still like the investment and want to place a limit order and take advantage of the short term market fluctuations to buy the shares below the strike price, or see if my money would be better invested elsewhere. These aren't very exciting ways to build a portfolio; but if you find investing exciting, you're doing something wrong. As for me it's meant I could sleep well at night and that's worth a lot.
Now that you've done your due diligence, found a trustworthy brokerage, and one or more companies you'd like to invest in; what do you do if you aren't J. D. Gotrocks and have only a limited amount of money to invest each month? How do you invest a small amount for best effect? My best advice is not to deal in what are called penny stocks (stocks below five to seven dollars per share). While you can buy more shares of a low-priced stock than a high-priced stock, low-priced stocks usually belong to smaller companies that are easier to manipulate. If you only have a small amount of money to invest each month, it might be a better idea to wait and accumulate funds until you have enough to make a larger purchase. Making your purchase each quarter, or every six months, may make better financial sense. The idea is to reduce the percentage that you paid commissions for your purchase. Your commission should be no more than 2% of your total purchase. If you can't find a brokerage that's willing to meet these guidelines, I suggest you use something like Sharebuilder.com to make your purchase. Sharebuilder is designed for small investors and has a very low commission. Don't forget to use a DRiP program as well. Over time, this strategy can pay off.
That's the story of my financial experiences. I hope you've gained some information to help you in making your own financial choices. In the sections below, I've tried to assemble interesting and informative financial resources to help improve your investment results, leave you better prepared to deal with the complexities of financial markets, and make the investing community a better place. If you have questions or want to share financial planning experiences, there are organizations (some probably in your area) that can help. I recommend the Better Investing Community, the American Association of Individual Investors, the Investors Alliance, and the National Association of Investors Corporation. I hope this page has been helpful. If you have a question or comment please feel free to write me at Wilson@ds.net.
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He that hath a trade hath an estate, and he that hath a calling hath an office of profit and honor; but then the trade must be worked at, and the calling well followed, or neither the estate, nor the office, will enable us to pay our taxes. Benjamin Franklin
|EXELON CORPORATION (EXC)||47.78||23.65||169||4.30%||$8,074.82||$4,077.97||102.03%||Personal (Taxable)|
|HILLIARD-LYONS GOVERNMENT FUND (HLCXX)||0.30%||1.00||8,418.13||-||$8,418.13||$0.00||-||Personal (Taxable)|
|American Capital, Ltd. (ACAS)||2.295||34.01||1,252.524||N/A||$2,874.54||$39,930.20||93.28%||Personal (Taxable)|
|ALLIANCEBERNSTEIN (ACG)||7.14||8.74||508||8.40%||$3,627.12||$812.80||18.31%||Personal (Taxable)|
|ALLIED CAP CORP (ALD)||1.70||29.93||1,953.694||146.90%||$3,321.28||$55,308.67||94.34%||Personal (Taxable)|
|ALD Jan 2010 15.0000 put (YEDMC)||13.46||12.60||-3||-||$-4,038.00||$337.62||8.75%||Personal (Taxable)|
|BK OF AMERICA CP (BAC)||7.47||22.00||300||0.50%||$2,241.00||$4,503.00||66.77%||Personal (Taxable)|
|C B L & ASSOC PRP (CBL)||3.19||12.16||211.563||49.30%||$674.89||$1,972.52||74.51%||Personal (Taxable)|
|Comcast Corporation (CMCSA)||14.3375||20.28||300||1.90%||$4,301.25||$1,782.75||29.30%||Personal (Taxable)|
|Computer Programs and Systems (CPSI)||33.75||22.64||300||4.20%||$10,125.00||$3,202.36||46.26%||Personal (Taxable)|
|CVS CAREMARK CP (CVS)||28.88||29.61||100||1.10%||$2,888.00||$135.79||4.49%||Personal (Taxable)|
|CVS Jan 2010 35.0000 put (WSAMG)||8.20||10.10||-2||-||$-1,640.00||$333.69||16.15%||Personal (Taxable)|
|DOW CHEMICAL (DOW)||10.75||25.59||200||5.50%||$2,150.00||$3,072.74||58.83%||Personal (Taxable)|
|EATON VANCE C-E FD (EIV)||11.65||11.68||850||7.80%||$9,902.50||$357.27||3.48%||Personal (Taxable)|
|EATON VANCE MUNI INM (EVN)||9.304||9.76||1,500||9.00%||$13,956.00||$988.57||6.61%||Personal (Taxable)|
|FAIRPOINT COMM INC (FRP)||0.77||7.50||200||122.60%||$154.00||$1,428.00||90.27%||Personal (Taxable)|
|Gladstone Investment Corporation (GAIN)||4.02||5.75||218.021||21.80%||$876.44||$421.95||32.50%||Personal (Taxable)|
|HORIZON LINES INC (HRZ)||3.55||14.22||400||12.00%||$1,420.00||$4,358.57||75.43%||Personal (Taxable)|
|HRZ Jan 2010 10.0000 put (XUCMB)||7.20||6.95||-4||-||$-2,880.00||$176.67||6.18%||Personal (Taxable)|
|MUNI MTG (MMAB)||0.45||16.10||300||N/A||$135.00||$4,855.40||97.29%||Personal (Taxable)|
|NORDIC AM TNKR SHIP (NAT)||29.97||33.99||260.484||11.30%||$7,806.71||$1,170.35||13.04%||Personal (Taxable)|
|PCM FUND, INC. (PCM)||5.11||13.94||357.297||16.00%||$1,825.79||$3,254.67||64.06%||Personal (Taxable)|
|AT&T INC. (T)||26.43||24.93||152.445||6.10%||$4,029.12||$135.46||3.48%||Personal (Taxable)|
|THOMSON REUTERS CORP (TRI)||27.35||30.75||200||4.00%||$5,470.00||$810.95||12.91%||Personal (Taxable)|
|VERIZON COMMUNICATIONS (VZ)||32.75||30.95||504.556||5.60%||$16,524.21||$558.17||3.50%||Personal (Taxable)|
|WALGREEN CO (WAG)||26.84||34.43||100||1.70%||$2,684.00||$882.14||24.74%||Personal (Taxable)|
|WAG Jan 2010 32.5000 put (WFYMZ)||10.70||8.70||-2||-||$-2,140.00||$452.74||25.25%||Personal (Taxable)|
|FINANCIAL SEL SPDR (XLF)||9.42||19.76||300||-||$2,826.00||$3,238.51||53.40%||Personal (Taxable)|
|XLF Jan 2010 10.0000 call (YUWAJ)||1.96||4.94||3||-||$588.00||$894.00||60.32%||Personal (Taxable)|
|FRANKLIN CUSTODIAN FD INCOME CL (FKINX)||1.56||2.54||15,579.448||-||$24,303.94||$15,267.86||38.58%||Roth IRA|
|HILLIARD-LYONS GOVERNMENT FUND (HLCXX)||0.30%||1.00||3,008.73||-||$3,008.73||$0.00||-||Roth IRA|
|ALCOA INC (AA)||7.83||9.38||800||1.50%||$6,264.00||$1,240.00||16.52%||IRA|
|AA Jul 2009 15.0000 call (AAGC)||0.10||0.60||-8||-||$-80.00||$400.00||83.33%||IRA|
|AB Apr 2009 22.5000 call (ABDX)||0.05||0.90||-5||-||$-25.00||$425.00||94.44%||IRA|
|ALLSTATE CP (ALL)||20.41||29.07||300||3.80%||$6,123.00||$2,597.58||29.79%||IRA|
|ALL Jul 2009 40.0000 call (ALLGH)||0.09||2.00||-3||-||$-27.00||$573.00||95.50%||IRA|
|Comcast Corporation (CMCSA)||14.3375||13.33||150||1.90%||$2,150.63||$150.63||7.53%||IRA|
|CEMEX SAB DE CV ADR (CX)||7.30||8.94||900||N/A||$6,570.00||$1,476.00||18.34%||IRA|
|CX Jul 2009 15.0000 call (CXGC)||0.15||0.80||-9||-||$-135.00||$585.00||81.25%||IRA|
|DIAMOND OFFSHORE DRL (DO)||67.83||55.17||200||0.70%||$13,566.00||$2,532.00||22.95%||IRA|
|DO Jun 2009 70.0000 call (DOFN)||5.80||5.20||-2||-||$-1,160.00||$120.00||11.54%||IRA|
|DUKE ENERGY CP HL CO (DUK)||14.06||11.89||156||6.50%||$2,193.36||$268.80||13.97%||IRA|
|ENERGY TRANSFER PRNT (ETP)||39.73||32.59||200||9.10%||$7,946.00||$1,428.80||21.92%||IRA|
|ETP Jun 2009 40.0000 call (ETPFH)||1.40||0.80||-2||-||$-280.00||$120.00||75.00%||IRA|
|GENERAL MARITIME NEW (GMR)||7.91||36.47||268||25.60%||$2,119.88||$7,726.07||78.47%||IRA|
|HILLIARD-LYONS GOVERNMENT FUND (HLCXX)||0.30%||1.00||6,139.05||-||$6,139.05||$0.00||-||IRA|
|HARTFORD FIN SVC (HIG)||9.33||16.22||300||2.30%||$2,799.00||$2,066.58||42.47%||IRA|
|HIG Jun 2009 22.5000 call (HIGFX)||0.10||2.05||-3||-||$-30.00||$585.00||95.12%||IRA|
|ISHARES IBOXX HY BD (HYG)||70.41||75.06||110||-||$7,745.10||$511.50||6.20%||IRA|
|SOUTHERN COPPER CORP (PCU)||18.38||14.43||600||2.50%||$11,028.00||$2,370.00||27.37%||IRA|
|PCU Jun 2009 20.0000 call (PCUFD)||1.45||1.35||-6||-||$-870.00||$60.00||7.41%||IRA|
|POWERSHARES II PFD (PGX)||10.00||11.85||600||-||$6,000.00||$1,109.94||15.61%||IRA|
|PROLOGIS SBI (PLD)||7.73||11.64||1,000||12.40%||$7,730.00||$3,910.00||33.59%||IRA|
|PLD Jul 2009 20.0000 call (PLDGD)||0.10||2.33||-10||-||$-100.00||$2,230.00||95.71%||IRA|
|PENN WEST ENERGY TRUST (PWE)||10.50||24.66||300||21.30%||$3,150.00||$4,248.00||57.42%||IRA|
|SPECTRA ENERGY (SE)||14.66||11.89||78||6.70%||$1,143.48||$216.06||23.30%||IRA|
|STRYKER CP (SYK)||33.48||51.72||300||1.20%||$10,044.00||$5,673.82||36.10%||IRA|
|SPDR DB INT GOV BD (WIP)||47.23||47.64||160||-||$7,556.80||$65.58||0.86%||IRA|
|FINANCIAL SEL SPDR (XLF)||9.42||11.59||700||-||$6,594.00||$1,518.93||18.72%||IRA|
|XLF Jun 2009 16.0000 call (XJZFP)||0.08||0.70||-7||-||$-56.00||$434.00||88.57%||IRA|
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General Principals of Investing
Choose a few stocks that are likely to produce above-average returns over the long haul, concentrate the bulk of your investments in those stocks, and have the fortitude to hold steady during any short term market gyrations. Warren Buffett
From Beating the Street © 1993, 1994 by Peter Lynch ISBN 0-671-75915-9
From Becoming Rich: The Wealth-Building Secrets of the World's Master Investors Buffett, Icahn, Soros © 2005 Mark Tier ISBN-13: 978-0312339869
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Credit, Banking, and Identity Theft Reporting Sites
The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7
RepRx Reputation Management can help you manage the results returned on an internet search. +1 (800) 889-4812
FTC Identity Theft A one-stop natinal resource to help you implement the three D's (Deter, detect, defend).
Get Rich Slowly A great place to find info on preventing identity theft (and other financial information).
Securing your SS number Did you know you don't actually have to hand out your SS number to everyone that demands it?
Georgia Govenor's Office of Consumer Affairs Good suggestions of what to do in case of identity theft, regrardless of what state you live in.
Identity theft can be difficult to detect and expensive to correct. Call your banks, mortgage company, credit card companies, and brokerages first. Get a free copy of your credit reports from all three agencies and look for new or unused accounts or mortgages (close the unused accounts) in your name. File a complaint with the FTC and the Social Security office. Contact the Department of State and your state's Department of Motor vehicules to verify no one has applied for a passport or drivers license in your name. There may be additional steps for you to take depending on your particular circumstances.
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Rather go to bed supperless than rise in debt. Benjamin Franklin
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Dictionaries & Glossaries
Creditors have better memories than debtors. James Howell
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... taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay, we might more easily discharge them; but ... we are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly, and from these taxes the commissioners cannot ease or deliver us by allowing an abatement. Benjamin Franklin
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Exchanges and Rating Services
Diligence is the mother of good luck. Benjamin Franklin
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General Reference Material
For the love of money is the root of all evil. 1 Timothy 6:10
Beware of "free stuff" scams. Don't commit to future purchases, or "accept three deals from our vendors and you get a free..." scams. Free means free, no strings or obligations attached.
Beware: Never pay a stranger to help recover unclaimed funds or property. Don't give personal information (credit cards, bank accounts, Social Security number) to anyone offering to help you. Remember, these assets are yours already, don't let scammers steal them away from you.
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Get what you can, and what you get hold; 'Tis the stone that will turn all your lead into gold. Benjamin Franklin
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For wisdom is a defense, and money is a defense: but the excellency of knowledge is, that wisdom giveth life to them that have it. Ecclesiastes 7:12
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© 1997, 2004, 2005, 2006
Brian S. Wilson. All rights reserved.
Updated: [an error occurred while processing this directive]