Core Investing Thoughts

Investing Core Ideas --

The concept is simple. Buy low - sell high. So many people lose this simple idea. I like selling at a 37% profit myself.
Profit = Ending Amount - (Starting Investment amount + 9.99) - 9.99

9.99 is my transaction fee from my broker. I pay this fee to buy and sell a stock.

The "Ending Amount" is fairly hard to come up with for everyone. This is a personal thing. Myself I use 37% for my small trading account. This does change if you want to increase the sales profits in your IRA.

Invest with money that you don't need for even emergencies. If you have a emergency fund or money set off from regular expense money you are good to go...

Try to invest in stocks for more than a year. If you trade before the year is up your taxes will decrease your profits at tax time. If the tax code is changed to allow profits from stocks to be non-tax then I will most likely look at day trading.. Just kidding.

Personally I trade stocks with a 3-5 year window. For this reason I want the stock to pay dividends. I want the stock to pay me as I own the stock. Certainly I want the stock to go up in price as well.

Where did I start in checking out companies?
I started out looking at the S&P 500 dividend aristocrats. Here is a link to the list of companies that have paid increasing dividends over the last 25 years.

S&P Dividend Stock list

After getting a list of companies that you might be interested in learning about you might create a spread sheet (or use paper) that tracks a stock. Play like you buy the stock today or 5 weeks ago. Put the spreadsheet away and update it in a week. Did your investments go up or down?  What I have seen if I try to buy a stock at a low price as the price is declining the stock will sometimes go further down. This gives me another buying opportunity if I really believe in the stock and the company leadership. Generally after buying a stock during the year the stock might decrease 10%. After the second year you should show some positive ground if the economy is doing well.

As a long term investor people have asked me how to invest money for college for my children. I would put most of the money in a S&P 500 based mutual fund. These companies are the top 500 companies of the world! For a low cost fund check out Vanguard. There are different grades or entry points in funds so do your homework. Fees are not your friend. This fund approach decreases your risk at the company level. Bad companies or poor performers do drop from the S&P 500.

Another successful way I have invested is by using the fireman approach. If your home catches fire a fireman runs in to get your loved ones. They are the truly important ones. If a company has a problem like when McDonalds had Mad Cow in burgers in Europe the stock dived in price. I bought it. Use the news to look at stocks.

You have to decide where you are comfortable. I am pretty conservative since I like to sleep at night without worrying about my investments.