Advice Needed from you Gurus

[GGal]

I have about $20K I want to invest. I've chosen 6 buy and holders that have great earnings, and really strong buy recommendations. My friend says don't put the $20 K in the market right now, wait for it to drop. I thought it had already dropped.

What ya'll think?

GAWGA

 

[FundSurfer]

I'm a buyer for long term right now. I'd probably pick large caps, oil (BP looks good after the drop), and maybe something overseas.

If someone is waiting for a drop they may pick up a percent or two if they time it well. You might also miss a rally of a percent. Either way, if you are long term you probably should not be fishing for the exact bottom. JMHO.

 

[Birchtree]

Be sure your buy and holders have export related businesses - this is a great time to buy - sort of like doing your grocery shopping at midnight, there ain't nobody there and parking is never a problem. Maybe you could look at Sharebuilders for online investing at low commissions - I know a Navy guy that gets 187 dividend hits a year in his program - it's all the time and free.

 

[dell]

Birch: Could you elaborate more on the dividend hits? I am very interetsted in dividend paying stocks.

Thanks - Dell

 

[Birchtree]

Dell,
Glad to help. Here is a small portion of history. When Winn Dixie was in her prime only a few years back they were one of the few listed stocks that paid a monthly dividend. Any one who owned this particular stock from 1950 did wonderful because it split 14 times - dull and boring Winn Dixie that is now in chapter 11.

The moral of the story is that dividend reinvestment is a self feeding system. Once you acquire your initial stock it has a dividend date and will pay every three months. If the stock price has dropped some you buy more stock with the current dividend - which means next time it pays the dividend will be greater because you now have more stock - self feeding and automatic.

The Navy guy has 46 different stocks in his portfolio which is a deferred comp plan - he buys 5 on a recurring basis evey two weeks no matter what the price. He gets 187 dividend payouts over the year all at different times so there is always money arriving - and it feels best when the market is correcting.

The only problem is that once you sell the stock that ends the dividend payment so one has to be able to absorb the painful corrections that come along. I have one company that pays me $2000.00/year so I invest $500 every three months or 4 times/year. That $500 will grow every time I buy more stock - self feeding mechanism. And as the price of the stock goes up the valuation becomes greater. Hope this helps.

 

[Dave M]

Dividend Reinvestment

In 1988 my folks bought my daughter -- their grand daughter -- 20 shares of NY State Electric and Gas, NYSEG, on the dividend reinvestment plan. Today there are 150 shares. By the time she is ready to retire there will be around 1000 shares in the plan.

Dave

 

[GGal]

here's my picks, any comments:

ABCB
RNT
SBKC
IYXI.OB
RNAI
ALNY

 

[Birchtree]

Peaches,

The blessing is you won't go broke with $20K on the line. I'd keep the banks and the pharma and push the three dogs out the portfolio door.

 

[GGal]

Well, I dunno, $20 K is a lot to me....I think I will drop INYX....hey, but Aaron Rents (RNT) is one of the top rated public companies in GA...

Thanks for responding!
GAWGA

 

[Ichiro]

If I had $20K to invest, I would put $10K into Dodge and Cox International Funds (before it closes) and the balance into dividend paying stocks such as Johnson and Johnson, Wrigley, Well Fargo, etc. I invested in those dividend reinvestment programs for the past 25 years and i have done well! With the stock splits and dividends, one of my stock became a 110 baggers...