Buying Opportunity

The market downturn of the previous two days and today's volatility gave me the opportunity to make some purchases in our investment accounts.  I chose to buy several index ETFs and some individual stocks.   I expect the downturn/volatility to continue and will be making more purchases during this time.

Fortunately, I have qualified for free trades at a couple of my brokerages, which allows me to buy in small amounts without any commission costs.  Thus, I can avoid the pain of a large position falling soon after I buy it.

The following are the ETFs and stocks I have bought:

Growth

• MTUM - This ETF follows the MSCI Momentum Index.   It has a low expense ratio of .15%
• VONG -  This is a Russell 1000 Growth Index ETF.  .12% expense ratio.

Total Market

• VOO - This is a S&P 500 Index ETF  .04% expense ratio.

International

• VEA -  This is a FTSE Developed Market Index.  It is mostly (99%) non-US. .07% expense ratio.
• DFJ - This is a Japan Small Cap Dividend ETF. This the highest expense ratio ETF that I purchased at .58%

Income Stocks

• GLPI -  Gaming and Leisure Property, Inc.  REIT paying 7%
• WPC -  W.P. Carey, Inc.  REIT paying 6.3%
• NNN - National Retail Property, Inc.  REIT paying 4.8%
• O - Realty Income Corporation.  REIT paying 4.95%
• STAG - Stag Industrial, Inc.  REIT paying 5.7%

I will continue to make small additions to the positions as the market declines.   Also, I may buy other ETFs and stocks that meet our investment criteria.

Disclosure:  As of the time of posting, we own shares of all the above mentioned stocks/ETFs in our investment accounts.

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

Copyright © 2018 Achievement Catalyst, LLC

My Investing Dilemma

"If it's too good to be true, it probably is."  ~  old adage

The market returns have been unexpectedly and shockingly great in January.   I fully expected at least a small pullback as investors locked in 2017 gains and sold on the news of tax reform.   However, the market has continued to march upward, showing the enthusiasm of investors for the stock market.

I did add some funds this month, but much less than I was planning to do.  I am now faced with a decision of adding significant funds just before a pullback or holding back and missing another 5% advance.   Of course, a third scenario would be adding significant funds just before another 5% advance, but I give this a low probability:-)

I recall in 2007, I faced the same decision.   Without much concern, I put a significant amount of retirement cash into equities.   Everything was going up; my company stock was at an all time high; the indices were at an all time high.   A year later about 40% of our retirement savings were wiped out by the great recession.   The memory keeps me from jumping into a rising market without caution.

So my plan now is to stay invested in our managed accounts, which have all done exceptionally well in January, and continue to take profits when the account exceed the minimum required amounts by 1-2%.   Since I am currently underexposed to international stocks, I will slowly add funds to select international commission free ETFs until the target investment levels are reached.   That way if the market corrects, I will mitigate our losses and acquire some shares at a lower cost basis.

However, now I will be waiting for a correction before adding significant funds to equity investments.

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

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

Copyright © 2018 Achievement Catalyst, LLC

Letting Profits Run

As the market continues to rise, I am very tempted to sell some of my new positions for a 20% gain or more.  After all, taking profits isn't bad to do.  And I've had gains turn into losses when I waited too long.

Recently, however, the stocks I sell have continued to go up about 80% of the time.   As a result, I've left a lot of money on the table.

So I'm going to start following this investing rule:   Keep the winners and let profits run.

We'll see how this works over the next few weeks.

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

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

Copyright © 2018 Achievement Catalyst, LLC

Convincing Myself to Buy More Stocks

At the end of 2017, I posted that I would add funds if the market went up or if the market went down.  Well, the market went up the eight out of the nine first trading days of the year.   I didn't expect that.   I was planning on a decline, which would allow me to add funds at a lower cost basis. (For reference, I did buy some on the down day.)  Now, I will need to buy at higher prices, with the fear that the market will fall right after I buy.

After spending the last week considering my options, I have convinced myself to add funds systematically by purchasing on the dip with winning stocks and buying good stocks in beaten down sectors to mitigate the downside risk.  However, I will wait for a correction before adding significantly more funds.

Despite many arguments for the market being too high and the bull market being too long, below are my reasons that I believe the stock market will continue to rise:

• The stock market advance indicates approval of the government's actions over the past year.  The sentiment is the economy will improve, businesses will grow, and 
• Trump will continue to drive his pro-business, anti-regulation, and America first agenda.  wall Street and business are responding well in this environment.

Of course, interest rates could rise sharply, which would cause stocks to decline.

Finally, an Wall Street adage is " A bull market climbs a wall of worry."   And there is a lot of worry right now.

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

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

Copyright © 2018 Achievement Catalyst, LLC

Million Dollar Poverty

"A nickel ain't worth a dime anymore." ~ Yogi Berra

When I was growing up, a million dollars or being a millionaire was the holy grail.  I thought I would have it made if I could accumulate a million dollars.  It definitely would have been enough

Nowadays, a million dollars may not be enough according to CNBC for today's retirees.   A million dollar nest egg would yield $40,000/year using a 4% withdrawal rule.   This would last about 12 to 25 years depending on one's state of residence.   For 42 year old GenXer, the withdrawal would be $19,000/year inflation adjusted.   The articles notes for a 32 year millennial, the withdrawal would be below the poverty line, which the article characterizes as "million dollar poverty."

Given inflation and longer life expectancies, I estimate the nest egg holy grail for our kids will be at least $5 million...or even more.  

For more on Crossing Generations, check back Thursdays for a new segment.

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

Copyright © 2018 Achievement Catalyst, LLC

Going with the Flow in 2018

I am convinced the next couple months will be a good time to put more funds back into the market.  If the market goes up, I will buy into the advance.  If the market declines, I will buy into the dip.   If it stays flat, I will wait before buying.

My plan is to buy commission free ETFs so that I can make several buys in small quantities.  That way if my timing is off, I can use the opportunity to dollar cost average down..

Tomorrow, January 2, is the first trading day of 2018 and will be my first read of the market sentiment/direction.

For more on Strategies and Plans, check back Mondays  for a new segment.

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

Copyright © 2018 Achievement Catalyst, LLC