New beginnings
Sep. 13th, 2009 07:00 am![[personal profile]](http://s.dreamwidth.org/img/silk/identity/user.png){kind=small}
blackbyrd2I've had this Dreamwidth account for several months, and have been debating what to use it for.
For now, I'm going to track my investments and personal finances here. I'll use this to keep track of what I buy and sell, (although not quantities. Who really wants to know that sort of thing?), and my thoughts on the market, what things I'm unsure of or puzzled by, and my perspectives and recommendations, for those crazy enough to want to follow me.
Let me preface this by saying that I am not wealthy by any conceivable yardstick, but that I am currently making enough in my job that I can make small but regular investments towards my rapidly approachingold age retirement.
So, back in 07, I started putting a little money into some mutual funds (SSAIX, IFAFX, AMAGX, ANEFX) through my Wells Fargo PMA account, which offers me 100 free trades a year, and when the bubble burst in the fall of 08, they all lost about 50% of their value. (Ok, AMAGX only lost about 25-30%, and the others varied above that up to about 50%.) I watched them slowly climb out of the hole. I bought a little more to help them out, because hey- buying when the market is down is what it's all about, right?
But until March of 09, the bottom never quit falling out, really.
Now in March, when the DJI hit around 6500, I thought, now is the time to buy some stuff that will do better for me than mutual funds, because this whole diversity thing? It's just not working like it's supposed to.
Basically, I'm giving my money to some guy to manage the portfolio, and I have no control over what he does with it. I've had several different mutual funds in my life, through Merril Lynch, Saloman, Smith and Barney (both of whom handled my 401k accounts, and neither of whome made any money with my investments,) and now, Ed Jones is hawking American Funds, which, btw, seem to be doing reasonably well, as they are nearly back to breaking even with what I've invested in them. But breaking even isn't where I need to be. If all I wanted was to have the same amount of money when I get out, I'd buy CDs, ladder them up until I had a regular emergency fund maturing each month, and then grow that amount. The problem though, as you well know, is that inflation eats away at savings. You have to grow it faster than what's available in CDs, generally.
Now, when I was a teenager, one of the school projects other kids did was to buy some stocks on paper, and see how their 'accounts' did over time. I'm sure there were discussions and education involved, but since I wasn't actually IN that class, I missed out on all that.
However, it intrigued me, and I did buy some Honeywell stock on paper, and watched it for several months, as it grew, then grew rapidly, then fell like a rock (which I later figured out wasn't a crash, but a split) and then grew again.
Several years later, (in the 70's) I spent time working at a gas station which was 'company-owned'. As a Chevron employee, I was enrolled in the ESOP, which which let me buy shares of Chevron stock each payday, and which, as a forerunner of today's 401ks, involved the company matching contributions. Chevron matched an incredible 3 shares for every share I bought. When I finally moved on to another career (because who can pump gas their whole life? Well, actually some of those guys retired off those plans, but I couldn't see doing that) I had a nice little nest egg built up. I cashed it out, spent it, and regretted doing that ever since. I watched Chevron's share prices, dividends and splits for several years afterwards.
So, when the market bottomed out in March, and I had a few dollars to invest, you know what I did. I started buying stocks. They immediately outperformed the mutual funds dramatically, and I decided that I would continue my IRA with Ed Jones, in nice safe mutual funds, but that all my other available investment money was going to go into a portfolio at Wells Fargo, where I and I alone had control over my money.
So far, the lowest the value of my purchases has fallen has been a couple days at about 2% above what I paid. Mostly, they're running an average of about 7-8%. Because nearly everything I buy provides a dividend, the actual return (not including the 'potential' or paper return) has been 8%.
Those mutual funds I mentioned above? Around May and again in July they were getting near the breakeven point. I sold them off and bought stocks, and have never looked back. Selling them brought my total holdings out of the red for the first time in months, and it's never been back. (I know, the sale at a loss, even if it's a small loss, has to play into the grand total return. Overall though, the loss will be non-material, and will only skew the numbers very slightly as the portfolio grows.)
In my next post, I'll discuss some of my 'philosophy' about the market, and my personal investments. And I'll talk about my mistakes, too. I'll continue to cross post these to LJ for a while, but LJ is more a personal place where I rant and comment on politics and talk about what's going on with me.
I want the Dreamwidth account to be more about things I'm doing which might act as a resource for others. Along with my financial commentary, I hope to post some recipes, maybe some artsy-craftsy stuff if/as it comes up, etc.
For now, I'm going to track my investments and personal finances here. I'll use this to keep track of what I buy and sell, (although not quantities. Who really wants to know that sort of thing?), and my thoughts on the market, what things I'm unsure of or puzzled by, and my perspectives and recommendations, for those crazy enough to want to follow me.
Let me preface this by saying that I am not wealthy by any conceivable yardstick, but that I am currently making enough in my job that I can make small but regular investments towards my rapidly approaching
So, back in 07, I started putting a little money into some mutual funds (SSAIX, IFAFX, AMAGX, ANEFX) through my Wells Fargo PMA account, which offers me 100 free trades a year, and when the bubble burst in the fall of 08, they all lost about 50% of their value. (Ok, AMAGX only lost about 25-30%, and the others varied above that up to about 50%.) I watched them slowly climb out of the hole. I bought a little more to help them out, because hey- buying when the market is down is what it's all about, right?
But until March of 09, the bottom never quit falling out, really.
Now in March, when the DJI hit around 6500, I thought, now is the time to buy some stuff that will do better for me than mutual funds, because this whole diversity thing? It's just not working like it's supposed to.
Basically, I'm giving my money to some guy to manage the portfolio, and I have no control over what he does with it. I've had several different mutual funds in my life, through Merril Lynch, Saloman, Smith and Barney (both of whom handled my 401k accounts, and neither of whome made any money with my investments,) and now, Ed Jones is hawking American Funds, which, btw, seem to be doing reasonably well, as they are nearly back to breaking even with what I've invested in them. But breaking even isn't where I need to be. If all I wanted was to have the same amount of money when I get out, I'd buy CDs, ladder them up until I had a regular emergency fund maturing each month, and then grow that amount. The problem though, as you well know, is that inflation eats away at savings. You have to grow it faster than what's available in CDs, generally.
Now, when I was a teenager, one of the school projects other kids did was to buy some stocks on paper, and see how their 'accounts' did over time. I'm sure there were discussions and education involved, but since I wasn't actually IN that class, I missed out on all that.
However, it intrigued me, and I did buy some Honeywell stock on paper, and watched it for several months, as it grew, then grew rapidly, then fell like a rock (which I later figured out wasn't a crash, but a split) and then grew again.
Several years later, (in the 70's) I spent time working at a gas station which was 'company-owned'. As a Chevron employee, I was enrolled in the ESOP, which which let me buy shares of Chevron stock each payday, and which, as a forerunner of today's 401ks, involved the company matching contributions. Chevron matched an incredible 3 shares for every share I bought. When I finally moved on to another career (because who can pump gas their whole life? Well, actually some of those guys retired off those plans, but I couldn't see doing that) I had a nice little nest egg built up. I cashed it out, spent it, and regretted doing that ever since. I watched Chevron's share prices, dividends and splits for several years afterwards.
So, when the market bottomed out in March, and I had a few dollars to invest, you know what I did. I started buying stocks. They immediately outperformed the mutual funds dramatically, and I decided that I would continue my IRA with Ed Jones, in nice safe mutual funds, but that all my other available investment money was going to go into a portfolio at Wells Fargo, where I and I alone had control over my money.
So far, the lowest the value of my purchases has fallen has been a couple days at about 2% above what I paid. Mostly, they're running an average of about 7-8%. Because nearly everything I buy provides a dividend, the actual return (not including the 'potential' or paper return) has been 8%.
Those mutual funds I mentioned above? Around May and again in July they were getting near the breakeven point. I sold them off and bought stocks, and have never looked back. Selling them brought my total holdings out of the red for the first time in months, and it's never been back. (I know, the sale at a loss, even if it's a small loss, has to play into the grand total return. Overall though, the loss will be non-material, and will only skew the numbers very slightly as the portfolio grows.)
In my next post, I'll discuss some of my 'philosophy' about the market, and my personal investments. And I'll talk about my mistakes, too. I'll continue to cross post these to LJ for a while, but LJ is more a personal place where I rant and comment on politics and talk about what's going on with me.
I want the Dreamwidth account to be more about things I'm doing which might act as a resource for others. Along with my financial commentary, I hope to post some recipes, maybe some artsy-craftsy stuff if/as it comes up, etc.