Alright, I'm done with my portfolio.

[Orsorum]

Originally posted by: jumpr
I'm a HUGE saver (except for this summer...moved into a new place and had to get myself started buying groceries, some furniture, etc.). I've saved about 60% of what I've earned since I started working my freshman year of HS. Right now, my savings are sitting in an ING Direct Orange Savings account earning 2%, which I'm pretty happy with, considering that I have nowhere near $20,000. I've been looking around at IRAs and similar savings plans, and the best my bank (Bank One) could offer is something paltry like 1.75% on a Roth.

Personally, I feel that at this point, liquidity of funds is the most important aspect of my savings plan, as there may be expenses in the future that I won't be able to predict. For that reason, 2% makes me quite happy, as long as I can get my money quickly, which I currently can.

However, if there is a way for me to earn >2% while still keeping SOME liquidity, I'd definitely look into it. But in terms of an IRA, the only reason I'd be able to withdraw penalty free before retirement is for a home purchase, and it looks like I might need a newer car soon, so I need to stay away from that, at least for now.

I can't offer you any advice, but I'm just telling you my thoughts and current situation.

Thank you for your thoughts.

I already have a certain amount of funds that are liquid that I can survive off of, and I have some in savings, so I'm okay for now. I have to get a job that pays money, though.

 

[Orsorum]

Bump.

 

[Hector13]

Originally posted by: Orsorum
Alright, I think this is what I'm going to do.

$20,000 overall portfolio value (I honestly don't know the market value of my AEP holdings, but I'm guesstimating around $15,000 or so).

IRA
- FLSPX, 15% small-cap ($3,000)
regular brokerage acct
- VILPX, 15% municipal bonds ($3,000)
- FNMIX, 15% international bonds ($3,000)
DRIPs
- AEP, 35% mid-cap ($7,000)
- GRT, 10% mid-cap ($2,000)
- BA, 10% large-cap ($2,000)

the thought of having 55% of your portfolio concentrated in 3 stocks still scares me. I know DRIPs seem like a great thing and all, but I think you'd be doing yourself a huge favor by buying some ETFs or funds instead. You can buy MPY (the mid cap "spider") if you really want mid cap exposure or any one of the many ETFs that our out there.

If you get a no load/transaction fee index fund, I can't think of any reason to buy DRIPs instead.

 

[Orsorum]

Originally posted by: Hector13
the thought of having 55% of your portfolio concentrated in 3 stocks still scares me. I know DRIPs seem like a great thing and all, but I think you'd be doing yourself a huge favor by buying some ETFs or funds instead. You can buy MPY (the mid cap "spider") if you really want mid cap exposure or any one of the many ETFs that our out there.

If you get a no load/transaction fee index fund, I can't think of any reason to buy DRIPs instead.

Although I suppose another option is to lower the concentration of money in DRIPs and add in the Vanguard index fund, maybe reduce my AEP holdings to $2,000, GRT and BA to $1,000, then put $7,000 in the index fund.

The reason I really like DRIPs is the ability to add money in small increments. I don't have a substantial income, and my money comes in fits and starts. So I want the ability to add $40, 50 at a time without incurring fees. I can let the Vanguard fund appreciate and just add money into the DRIPs over time.

 

[Hector13]

Originally posted by: Orsorum

The reason I really like DRIPs is the ability to add money in small increments. I don't have a substantial income, and my money comes in fits and starts. So I want the ability to add $40, 50 at a time without incurring fees. I can let the Vanguard fund appreciate and just add money into the DRIPs over time.

check with your broker; most funds have a very small minimum "subsequent" investment amounts (ie, once you own shares in the fund you can buy as little as $50 or $100 more of the fund). If you bank/broker doesn't offer this, find one that does (I think the mutual company actually sets this amount, but your broker might set a higher minimum for some reason).

Once you find a couple funds like this, I would forget about the DRIPs all together. They are not worth the extra effort and give you no diversification whatsoever.

 

[Chaotic42]

Where did you get all of this money?

Every time I get any money saved up my car gets blown away by a hurricane, a roomate screws me out of a few thousand dollars, or I get some kind of insane medical bill.

 

[Orsorum]

Originally posted by: Chaotic42
Where did you get all of this money?

Every time I get any money saved up my car gets blown away by a hurricane, a roomate screws me out of a few thousand dollars, or I get some kind of insane medical bill.

I don't have a car (thank god for living in Seattle, ), I don't have roommates (my job is an RA-type position, actually, ), and I'm fairly healthy. I've just saved quite a bit of money and I've had some given to me by my grandfather.

 

[YingYang]

If I were you, I wouldn't do anything with your AEP stocks. It's earning 4.92% and it's going to get paid a dividend on September 10th. The only thing I'm concerned with is that it's EPS (earnings per share) is in the negatives and also it doesn't have a P/E ratio. I used to own EIX (Edison International) in which I bought it close to $11 and held on to it for a couple of years. I finally decided to get rid of it because it wasn't paying any dividend and for the longest time it's EPS was in the negative. I finally decided to sell it at $16.30, thinking that I could do better elsewhere. Call it bad timing or whatever but as soon as I got rid of the stock it jumped to well above $18 on the news that the California courts decided in favor of EIX in a lawsuit. I think you should keep your AEP stocks since it was your grandfather's intent for you to have.

 

[Orsorum]

Originally posted by: YingYang
If I were you, I wouldn't do anything with your AEP stocks. It's earning 4.92% and it's going to get paid a dividend on September 10th. The only thing I'm concerned with is that it's EPS (earnings per share) is in the negatives and also it doesn't have a P/E ratio. I used to own EIX (Edison International) in which I bought it close to $11 and held on to it for a couple of years. I finally decided to get rid of it because it wasn't paying any dividend and for the longest time it's EPS was in the negative. I finally decided to sell it at $16.30, thinking that I could do better elsewhere. Call it bad timing or whatever but as soon as I got rid of the stock it jumped to well above $18 on the news that the California courts decided in favor of EIX in a lawsuit. I think you should keep your AEP stocks since it was your grandfather's intent for you to have.

I'm going to hold onto the AEP no matter what, but I may most some of it and use that to broaden the portfolio.

I have to agree with Hector's comment, there is a saying (I think): invest without emotion. People who invest sentimentally or emotionally will get burned. That doesn't mean that you can't have favorite stocks or funds, but be rational and realistic in equity/bond choices.

 

[Hector13]

Originally posted by: YingYang
If I were you, I wouldn't do anything with your AEP stocks. It's earning 4.92% and it's going to get paid a dividend on September 10th. The only thing I'm concerned with is that it's EPS (earnings per share) is in the negatives and also it doesn't have a P/E ratio. I used to own EIX (Edison International) in which I bought it close to $11 and held on to it for a couple of years. I finally decided to get rid of it because it wasn't paying any dividend and for the longest time it's EPS was in the negative. I finally decided to sell it at $16.30, thinking that I could do better elsewhere. Call it bad timing or whatever but as soon as I got rid of the stock it jumped to well above $18 on the news that the California courts decided in favor of EIX in a lawsuit. I think you should keep your AEP stocks since it was your grandfather's intent for you to have.

dividend yield is far from the only thing to look at. It's odd that you are okay with a nice high yield, but your only concern is the fact that the company doesn't make any money!
Unless you have some sort of insider info, there is almost no logical reason to hold such a large amount of your portfolio in a single stock. It is just asking for trouble. Remember, back before its big crash, even Enron had a pretty nice dividend yield.

 

[Storm]

Any good books or websites to read besides www.fool.com which I havent totally read through yet?

Im reading this thread and a lot of this stuff is going over my head.

 

[Cyberian]

Originally posted by: Storm
Any good books or websites to read besides www.fool.com which I havent totally read through yet?

Im reading this thread and a lot of this stuff is going over my head.

I think that Hector13 is a professional in the the investment field.
I would listen to him and/or do some of your own research at a place like Morningstar, etc.

 

[GasX]

Sounds like you have got your sh!t together pretty damn well for a college kid. Kudos to you.

This is a personal preference, but I would NOT renvest dividends. I don't do this for two reasons.

1. It makes calculating your cost basis on an ongoing basis a huge pain in the ass. Tracking performance over time gets complicated after a few dividend cycles.
2. Not reinvesting dividends keeps a steady stream of cash entering you account. This can be used to reallocate your portfolio or to buy a stock when a good opportunity arises.

 

[Orsorum]

Originally posted by: Mwilding
Sounds like you have got your sh!t together pretty damn well for a college kid. Kudos to you.

This is a personal preference, but I would NOT renvest dividends. I don't do this for two reasons.

1. It makes calculating your cost basis on an ongoing basis a huge pain in the ass. Tracking performance over time gets complicated after a few dividend cycles.
2. Not reinvesting dividends keeps a steady stream of cash entering you account. This can be used to reallocate your portfolio or to buy a stock when a good opportunity arises.

How old are you?

 

[GasX]

I am 34

 

[Orsorum]

Originally posted by: Mwilding
I am 34

How often do you reevaluate your portfolio?

 

[Pepsi90919]

how about instead of all this you go outside into the world and realize there's more to this short life than money.

 

[Orsorum]

Originally posted by: Pepsi90919
how about instead of all this you go outside into the world and realize there's more to this short life than money.

Thank you for your contribution to the thread.

 

[GasX]

Originally posted by: Orsorum

Originally posted by: Mwilding
I am 34

How often do you reevaluate your portfolio?

I have quite a bit more than you, but I am less focused on allocation. I am mainly focused in stocks with my diversification coming through the different industries my investments are in.

My taxable brokerage account has 7 positions. 5 are high dividend paying stocks

CNP
C PRS (Citigroup preferred)
CI
CNP-A (preferred CNP)
RGR
CALP (a high tech company my father helped found)
Cash ( almost 30% at the moment )

My IRAs include the following:

QQQ - should be in everyone's portfolio
CNP
C PRS
CNP-A
RGR
PFE
ELN
L
TYC
UST
CPHD
Cash (<10%)

As far as rebalancing goes, I sell all or part of a position when it gets more than around 15% of the portfolio or if it sh!tcans and I have a better place to put the money and/or a gain to write off the loss against.

Oh, and ignore pepsi90919's comment. Money doesn't make the world go around, but managing your money wisely is the best thing you can do for your future other than finding the right girl...

 

[GasX]

You should go buy the current issue of Money magazine. It has a great article on the value of stocks that pay high dividends.

 

[gopunk]

i like how 60% of this thread is bump

 

[SP33Demon]

Originally posted by: Mwilding
You should go buy the current issue of Money magazine. It has a great article on the value of stocks that pay high dividends.

I usually read Kiplinger's, it has great investing advice... one of the past couple months' issues has advice to take advantage of the new tax changes and the "loopholes" that it presents... check it out, especially if you have kids under 14

 

[Orsorum]

Originally posted by: gopunk
i like how 60% of this thread is bump

I like how 60% of your mom is... oh. :Q






No one likes my portfolio.

 

[Orsorum]

Originally posted by: SP33Demon

Originally posted by: Mwilding
You should go buy the current issue of Money magazine. It has a great article on the value of stocks that pay high dividends.

I usually read Kiplinger's, it has great investing advice... one of the past couple months' issues has advice to take advantage of the new tax changes and the "loopholes" that it presents... check it out, especially if you have kids under 14

I'm only 20 - I'm very, very glad I don't have children right now.