Tough to be Positive

With a month left in 2015, I find it hard to be positive about the stock market.  I expect the market to continue to be ambiguous and directionless.  I also believe that the downside risk is higher than the upside potential.

Given my poor track record of anticipating short term stock market direction, I'm maintaining hold on our current investments.  I like my current investments, my level of cash, and can still sleep at night if the market falls.   So I'm bracing myself for a decline, and ready to make some additional purchases should the stock market go lower.

If my psychological preparation is wasted, I will be happy to be wrong.

For more on Reflections and Musings , check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2015 Achievement Catalyst, LLC

My Watching Paint Dry Investments

Tracking my investments in 2015 has been lot like watching paint dry.   A lot of time goes by and very little seems to happen.   With 2015 almost over, most of my accounts within a couple percent of the beginning of the year.   One managed account is down about 7% and one is up about 10%.    So overall, everything is about the same.

One reason is that I have chosen to invest in stocks that pay above average dividends to build a more dependable source of retirement income.  These stocks usually don't see significant short term price appreciation, and thus have a smaller impact on the account value.  In fact, several of my purchases have fallen with the expectation of Fed raising rates.   So most of my account growth will come from dividend payments, which will be about  1- 1.5% of the invested value per quarter.

Another reason is that we chose to be conservative in 2014 and put significant amounts in 5-10 year CDs paying 2-3%.   While better that the 0.01% of money market accounts, 2-3% still feels like very little annual growth.   But it's steady.

Finally, I don't get any immediate benefit from income,  since the investments are in IRA accounts and I am still below the age for penalty free withdrawals.    In about 2 years, I will be eligible for penalty free withdrawals and hopefully will benefit from "watching paint dry" during this time.

For more on The Practice of Personal Finance, check back every Wednesday  for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2015 Achievement Catalyst, LLC

Seeking Higher Interest Savings Accounts

Yesterday, my bank informed me that I am now eligible for 0.7% on our money market savings accounts.  Historically speaking, that may not be much, but it is significantly higher than the 0.01% we are getting today.

This info caused me to check with our other financial institutions on similar interest rate increases.  Unfortunately, there were no matching hikes by other institutions.   However, most had 5-6  month CDs paying 0.5%, which seemed like a reasonable alternative to me.

So in the next month, I'll be moving our 0.01% money market funds into higher paying money market funds or CDs, especially if the Fed raises interest rate in December.

For more on  New Beginnings, check back Sundays for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2015 Achievement Catalyst, LLC

A Frustrating Investing Year

2015 has been a very frustrating year for my investing.  The markets have been ambiguous and directionless. The indices have been seesawing all year, neither breaking out to new highs or falling o new lows. In addition, my company stock has fallen about 18% after hitting new highs in 2014.

My strategy of buying beaten down dividend paying stocks has lead to the purchase of several energy stocks, which unfortunately have fallen further.   The only highlight is the 4-8% dividend these stocks pay, if the dividend is maintained.   A dividend cut would only add to my frustration.

My last frustrating year was 2012, which was followed by a significant market advance in 2013.   However, my previous frustrating year was 2008, which was followed by a further large drop in early 2009.  It's not clear to me which will follow 2015, but right now I feel a negative outcome is more likely.

If there is a significant year end rally, I may take the opportunity to sell off some positions for a profit.  Otherwise, I will wait for a significant drop in the market to put more funds back into equities.
More than likely, the market will continue to be frustrating and not allow me to do either.

For more on Reflections and Musings, check back Saturdays.

This is not financial advice. Please consult a professional advisor.

Copyright © 2015 Achievement Catalyst, LLC