Definitely Not Buying

I have stopped buying equities and index ETFs and will wait until the next pullback before making purchases again. Given the events of this week (presidential primaries, Fed meeting), I expect there may be an outcome that disappoints the traders in the stock market.   So I may not need to wait too long before starting to make some purchases again.

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

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

Copyright © 2016 Achievement Catalyst, LLC

From Pain to Gain

Buying stocks in January and February this year has been slightly less painful than sticking a pin in my eye.  I was implementing my strategy of buying good companies whose stock had higher paying dividends.  However, I was continually punished as my purchases sunk further for several more weeks.   Near the bottom, with my confidences waning, I stopped making additional purchases.

When the pain to too great and I stop buying, the market usually bottoms and reverses itself.   So now I am enjoying some good gains as the market rallies.   In fact, I sometimes think I should have bought more, but I know better.   Placing more funds in equities would have put me above my threshold of financial pain.  

I still believe this rally is of the bear market kind, a respite from the selling pressure.   So I continue to use the opportunity to take some profits and lock in some gains.

Because I expect the pain will return shortly.

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

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

Copyright © 2016 Achievement Catalyst, LLC

Selling into the Rally

Although I have enjoyed the stock rally, it looks, feels and smells like a bear market rally.  Some of my beaten up stocks were up 10, 25 and even 120% on Friday.   So I'm taking this opportunity to lock in some profits by selling.   If the market continues to rally, I will continue to sell the total market ETFs  that we acquired over the last two months.

I expect that I will be able to buy back at lower prices when the bear market continues with its next downward leg in the next couple months.

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

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

Copyright © 2016 Achievement Catalyst, LLC

Trickling Funds into ETFs

We continue to trickle in funds to commission free dividend paying ETFs such as VNQ, VYM, VTI, FEU, SCHB and SCHD.   Since these ETFs are commission free, I can buy as little as one share at a time.  That way we can incrementally increase our investments without significant risk.   In fact, in today's market, we usually get to buy some cheaper shares a few days later.

These ETFs also pay dividends of 2-4%, which help mitigate the volatility in the current market.

Disclosure:  We own shares of VNQ, VYM, VTI, FEU, SCHB and SCHD in our investment acounts.

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

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

Copyright © 2016 Achievement Catalyst, LLC

Economic Slowdown or Recession?

Most economists seem to think the U.S. economy is just slowing down, but not heading towards recession.   However, the stock market seems to be forecasting a recession.

So which is it?

On one hand, the data indicates a slowing, but still positive, economy.   No contraction of GDP is sight yet.

However, individual stocks seem to be portraying a different situation.   Many stocks have been falling several months, with some down as much as 90% (e.g. oil and materials sector stocks).  Even the previous market leaders, technology and health care.  For example, Netflix is down about 38% from its all time high in December 2015.    Amazon is down about 28% in the same time frame.  Yesterday, Linkedin and Tableau both fell about 45% after disappointing earnings.

Either the stocks were extremely overpriced for perfection, or the economy is headed for a recession.
I think we are at an inflection point.   If the market continues lower, a recession is likely coming.  If the market demonstrates a major reversal in the next couple weeks, a slowdown could be the  explanation.

For now, I continue to remain cautious, waiting for market to show a clear direction.

Disclosure:  We own shares of Netflix.

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 © 2016 Achievement Catalyst, LLC

Dollar Stock Menu

"Buy when there is blood in the streets, even if the blood is your own." ~ Baron Rothschild

Baron Rothschild was a British nobleman that made a fortune by buying during the panic that followed the battle of  Waterloo against Napoleon.

2016 is looking pretty bloody for the stock market and my blood is part of the mix.  I am buying cautiously at this point, making small purchases of commission free index ETFs and select dividend paying stocks.  I believe there is still more significant downside risk than upside potential and will wait before putting significant funds into equities.

In preparation for the further decline. I am making a mental list of falling stocks that that I'd considering buying at a $1/share price in the near future.  I recall that I had a chance to buy Ford stock at $1/share during the 08/09 crash.  Today, Ford is a $12 stock and paying a $0.60/share dividend.

Perhaps, the upcoming bear market will create similar opportunities with the current batch of falling stock valuations.  One area of consideration is the oil/gas and materials sectors, where stocks that were previously around $50+/share are now in the low single digits.  Another area is biotechs.

Disclosure:   We currently own Ford, which was purchased in the last few months.  We also own several stocks from the oil/gas, materials and biotech sectors that have fallen to the low single digits.

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 © 2016 Achievement Catalyst, LLC

Waiting for More Clearance Prices

For the past couple weeks, I've been buying stocks on sale, at significant discounts of 20-50% off on average.   I've even been getting a few stocks at clearance prices - up to 90% off.

I think its time to stop buying on sale and wait for the inevitable clearance since there are few buyers and equities are in low demand.   I think the next two weeks will bring more prices down to clearance levels.

It will be worth waiting a couple weeks to see if I can get more stocks at clearance prices.

For more on Ideas You Can Use, check every Tuesdays for a new segment.

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

Copyright © 2016 Achievement Catalyst, LLC

Retirement Financial Security

I used to think having a large amount of investment assets would create retirement financial security.   Then came the 08/09 financial crisis.   This event has caused me to rethink depending mostly on stock market capital gains to support us in retirement.  Gone are the days of 7- 8% average returns for the stock market.

After a little more than 8 years of early retirement, I am revising our investments to create a steady stream of retirement income from our savings: a retirement paycheck.   Unfortunately, money market rates are less than 0.1% and short term CDs are about 1% and won't be returning to 5% during my lifetime.  I've outlined my current thinking in Creating Steady Sources of Income in Retirement,

Recently, I've been taking advantage of the stock market volatility to increase our holdings of dividend paying stocks.   With the current sector corrections, I've been able to purchase energy stocks with dividend percentages ranging from mid single digits to mid teens.  As the market falls further, I plan to continue adding to a few of these positions, and initiating some new positions with stocks from other sectors.

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

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

Copyright © 2016 Achievement Catalyst, LLC

Bracing for a Bear Market

"The beatings will continue until morale improves." ~ unknown

The market decline has been relentless for the first two weeks for 2016.  It will likely continue this week and maybe even for the entire month.   In the worst case, the low oil prices will lead to a financial crisis similar to 2008, despite all the new regulations implemented by the Federal government.

For now, I expect sellers to be in charge of the market, driving the indices down another 5 to 10%.  During that time, I will continue to invest in increments, buying small lots of a commission free total market ETF and small positions in dividend paying stocks.  I am still following my rule of only buying one or two positions a day since stock prices will likely be lower in the future.  In addition, I won't make any purchases on days the market rallies.

I will continue to buy incrementally until the market indices reach a 20% decline (S&P - 1707,78, Dow - 14681, Nasdaq - 4185).   At that point, I will decide if stocks are just on "sale" or if "clearance" prices are likely to come. Depending on my answer, I will either continue to buy, or move to the sidelines.

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

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

Copyright © 2016 Achievement Catalyst, LLC

Lions, Tiger and Bears...Oh my!

 Last week's stock market results, as well as the decline of many cyclical stocks over the past year, appear to be foretelling a dramatic end to the latest bull market.   In addition, North Korea has allegedly detonated a hydrogen bomb, Saudi Arabia and Iran will likely compete on oil production, and George Soros observed the economic environment seems eerily like 2008.

All that's needed is an end-of-the-world-prophet to proclaim the apocalypse will happen in 2016.

Seriously, I don't doubt the likelihood of another bear market occurring in the near future.  In fact, I think the potential is high for a steep market decline to continue next week.  I've been bracing myself for a significant fall in the market for a couple years now.   So even though a market crash will be painful, it will be a little less so since I've been expecting it.

This week, I will continue to buy small positions in a total market ETF and a few 3%+ dividend paying stocks.   But given the increased negative market sentiment, I will be further lowering the target purchase price points for these ETFs and stocks.

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

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

Copyright © 2016 Achievement Catalyst, LLC