Too Hot Investment Thread

HD has been a good dividend stock for us. We have done the bulk of our world wide travel off their dividend alone.
That being said, I acquired most of that stock when it was 20 to 60 bucks, not sure I would buy at current price.

 

Interesting. I owned them back in the day and did really well when I sold but hadn't looked at them in over a decade.

 

I have a bit of Ford as well. They're actually starting to execute on their EV plans -- they've got the Mach E coming out and their electric F-150 and Transit vans are coming out in the 2022 model year as well. Those are huge, high selling markets (light trucks and commercial vans) where Ford is already the market leader. My bet is they will do a lot of volume, which will serve as a springboard for the electrification of the rest of their product line.

 

Great thread...
Just to throw in 2 cents- No one has mentioned closed end funds.
And before I begin let me say they are "Exhibit A" of the statement that "markets always go too far, in both directions."
When times are good, they rock, with both appreciation and a sweet dividend.
When times are bad, they get pounded, far beyond their dividend.
If you are smart enough, and patient enough, to buy them after they've been pummeled, you can make good money quickly. Like 40-50% in a year. Or more.
But it's tough- I always get in too soon cause I'm not patient and I'm a sucker for bargains. Then I kick myself.

If interested- there are 2 things to know.
1) They are thinly traded. So they can move quickly up or down.
2) Most of them have a lot of leverage (debt.)

So why buy them...
1) If you love dividends, and don't get too depressed about market fluctuations, they can work for you.
2) If you are smart enough to buy low/ sell high, and are patient enough to be out of the market when they are too high, they can work for you.
3) Most have nice discounts to what they actually own. You can buy or sell based on where that discount is.
4) At the right time, they can be screaming buys because not many investors know about them, or can't handle their volatility.
Everyone and his brother follows AAPL or TSLA. Very few relatively follow closed ends.

Good examples of closed end funds are
NFJ - 6.5% dividend/ 13% discount. Holds equities.
DMO- 9% dividend/ currently almost no discount. Holds mortgages.
FOF - 8% dividend/ not much discount. This fund holds a variety of other closed end funds.
AOD- 7.3% dividend/ 11% discount. This fund is rare in that it has almost no leverage.
OPP - 13% dividend/ 4% discount.
MYI- 4.2% dividend TAX FREE/ 6% discount. Own munys, so their dividend is tax free and relatively safe compared to say, junk debt.

There are so many others. This is simply a sample I picked randomly.
Again, lots of caveats, but they can work for you as part of a wider portfolio.

 

It’s not a terrible bet for a couple hundred. I just wonder about the long-term viability. Maybe a temporary celeb endorsement is enough to keep it in the spotlight and a viable payment method which will increase its value over the years.

 

I tend to go with whatever is providing the latest information...in this case theres a message board called gator country... And motley fool is pretty good but you have to sift through a lot of stuff. They spend a boat load on advertising and tout their picks of stocks that have done really well but it would be more interesting to see the returns on all their selections. TSPVanguard is good but geared more to index fund investing as well as people who contribute to the 'government employee 401k' (the TSP) piece.

 

My advice is

x(VOO) + (1 - X)VBMFX

start with X = 1. As the years go by lower x bit by bit.

If you need excitement, find it elsewhere. As boring as I am, my wife who's a finance prof probably has not logged onto her retirement acct in 5 years which I am sure is well into the 7 figures.

Actually, another version of my advice would be to turn your finances over to your wife. I definitely have data to support this move. Also, I bet people who say, "I don't know anything about investing" do better than "investors".

Why Women Are Better At Investing

If you lack specific investment guidelines, like Ms. Weiss used, then perhaps the best guiding principle is to “know what you don’t know.” That’s arguably what gives women investors an edge over men.

 

Speaking of retirement, it’s remarkable how few have saved, and how far behind even those who have saved are. I was shocked at the percentile I fell into for my age. And I don’t think I have done anything extraordinary on it by any stretch other than invest regularly and fully with a decent company match.

Retirement Savings Percentile Comparison Calculator by Age - Personal Finance Data

what’s also interesting from that site is that being a millionaire is still a good achievement, but it’s hardly some exclusive club. Even for folks in their 50’s, it’s well north of 10 percent of households.

 

Yeah I'm very pissed at younger me for not getting on board with saving for retirement sooner. I should have probably 5 times what I currently have but I'm hitting it pretty hard now. I just had zero discipline until the age of 32 or so. According to that site I'm still in the top 75th percentile.

Currently (aside from buying Bitcoin in November) I'm on the Dave Ramsey plan for retirement. Slow and boring.

One good thing is I have zero debt outside of the mortgage (and we only owe $80k on that for a house worth 3x that).

 

When I was 31, I was $25,000 in debt & my wife got a job for $32,000 & I tagged along & made maybe $15,000 a year for those 2 years. We lived in a shack in Durango. In the BR that had been added on, I had to break ice in the toilet in the winter & had to duck to get my head under the shower & I'm not tall. It was the 1st time in our lives we had the opportunity to put money into ret accts & we maxed out what we could put in & have done so ever since. & I would not say we were all that disciplined....I spent $2000 on a used mt. bike ( I still ride it!) & it was the best 2 years of my life. So, we may not have started all that early, but we def took full advantage ever since.

 

Yeah recurring theme, I didn’t really start til my 30’s either. That’s another reason I’m shocked at where I am relatively speaking. And the power of compound interest in those early years is real - I put about 3k in my first retirement plan about 25 years ago. It’s at 26k today. So really wish I had been smarter, but in a way it worked out, because getting behind forced the discipline on me later.
now I have to start thinking about cutting back how much I save for retirement so I can save more liquid assets to draw on or divest with, since retirement is in good shape but that’s behind a bit.

 

My first year out of college a friendly co-worker recommended I check out fool.com. That's where I got my financial education. I've always been good at math, so compound interest really appealed to me. I started contributing to a 401k immediately. Got married, and my wife did the same when she started working. We are both in lucrative careers (engineer and attorney), so we were maxing out all of our retirement contributions in our late 20s. We're not hyper aggressive savers, but we've done really well over time - the calculator puts us in the 98th percentile for our age group (I'm 43).

 

Good job man! You don't even need to have extremely well paying jobs to get into the 85+ percentile. Just be consistent from a very young age. Compounding interest is pretty amazing.

As for my scenario it definitely does not help that my wife has zero retirement contributions. She has dealt with chronic illnesses that have gotten in the way basically our whole marriage. Had she held down a consistent job the whole time we would probably be bumped up another 5% points at least. It's all on me at this point which is OK but puts us behind some.

 

What does it say about you that I assumed it was intentional?

 

Edit. Fun fact about my job in Durango. I worked in the same building as Mike Judge's dad & got to know him a little. He's an archeologist.

 

"Huh-Huh-You said Durango"

 

First things first, will the market continue up in 2021?