I just opened a Roth IRA, and am ready to invest in the stock market

[spaggyroe]

I max out my Roth IRA every year, but that's as far as I go with stocks. I don't understand the market, and just know, for certain, that I would choose the losing horse 10/10 times. So I just try to load enough bucks into savings that I can live off the interest.

I made $3 this year on passive income that way, so off to a good start.

I don't think the "experts" really understand the market either John.

My personal views are, that time in the market is more important than timing the market.
I invest every month like clockwork. Sometimes the market is up, sometimes it's down. Sometimes I get funds that are cheap, and sometimes I get funds that are expensive. Ultimately, it all averages out ( A.K.A., "dollar cost averaging"). Over time, the market ALWAYS goes up. Sometimes you have to be more patient than other times to see those gains.

Over the last 3 years, I've made more in investments than I have working. Granted, the opposite might be true for the next 3 years. Nobody knows. Ultimately though, I feel very confident that long term, the market will perform well. I buy index funds, so I'm not singling out any horse in the horse race. I'm betting on them all.

 

[RockChucker]

@spaggyroe is your monthly investing in a retirement account (Roth, IRA, 401k) or just your own personal investing in the market?

 

[spaggyroe]

@spaggyroe is your monthly investing in a retirement account (Roth, IRA, 401k) or just your own personal investing in the market?

Yes. lol

I contribute to my company 401k, tax deferred money there.
I also invest on my own in taxable accounts. (Roth IRA, and just a brokerage account) as well. I use Fidelity for that and have an automatic transfer occur from a dedicated checking account that occurs on the 28th of each month. A portion of my paycheck is deposited into that dedicated checking account every 2 weeks. This process has been easy / automatic / and pretty much brainless once it's set up (which works well for me). I'm the Ron Popeil of investors... set it and forget it.

I find that if I let money hit my regular checking account, I end up buying bronco parts or something. If it's out of my normal financial view, and is set up to be an automatic thing, it actually gets invested.

One of my goals is early retirement, and I wanted some investments in areas that I could access when needed without paying the early withdrawal penalties.

 

[RockChucker]

That's what I've started doing the last year. I've had a company Roth/401k since i started working at my current job (and putting in at least the company match), but recently i've started investing in an index fund every month as well. I have similar goals but don't have the time/desire to spend large amounts of time researching the market.

 

[TurboMinivan]

I don't think the "experts" really understand the market either John.

Here is an extremely imortant fact that every investor should know: nobody--nobody--can repeatedly and accurately predict the stock market. This fact doesn't stop the so-called gurus from trying it, though. They'll make loud predictions, and when they don't come to pass exactly as predicted the guru will wait briefly, then make another loud prediction. Once they finally get one right, they'll dig up evidence of this one correct prediction and begin boasting to the world, "See? I called it!". The public will now award this guru fame and perhaps fortune, and they'll be repeatedly mentioned as an investing wizard... until they fail to predict the next major move of the market. Then they fade away and are replaced by the next guru who finally made their one lucky guess.

Don't fall for any of it. At any given moment, somebody is loudly predicting a market crash while someone else is loudly predicting new market highs. There is no guarantee that either of them will be right. Ignore them both, and keep doing things that lead to success over time. This is the way.

My personal views are, that time in the market is more important than timing the market.
I invest every month like clockwork. Sometimes the market is up, sometimes it's down. Sometimes I get funds that are cheap, and sometimes I get funds that are expensive. Ultimately, it all averages out ( A.K.A., "dollar cost averaging").

This is a winning strategy, one that has been proven again and again to lead to financial success.

Over time, the market ALWAYS goes up.

Exactly. In the short term, the market can be extremely volatile... but in the long term, it always goes up.

Over the last 3 years, I've made more in investments than I have working.

Fantastic! This shows your strategy is working. Keep it up, and don't change a thing.

 

[spaggyroe]

I have similar goals but don't have the time/desire to spend large amounts of time researching the market.

Me neither, nor am I ever going to pretend that I'm intelligent enough to analyze a companies finances to determine if their stock is a good buy or not. This is why index funds work for me. Think of it as buying a piece of the entire U.S. economy, and every person from the factory floor to the CEO's corner office is working towards making you money. Also, the fees associated with an index fund are WAY cheaper than an actively managed fund (which makes a BIG difference to a long term investor). There are even 0 fee index funds now (such as Fidelity's FZROX). Finally, actively managed funds may beat the index for a year or two, here and there, but it's almost unheard of for one to beat the index long term.

 

[johngottfredson]

I wonder if self employed folk view investing differently than paycheckers. Beyond my Roth IRA, most of my investment money goes into growing my own business, or other cash flow deals that I can have some control over. Would be interesting to know if that's a personality trend.

 

[cruiseroutfit]

I wonder if self employed folk view investing differently than paycheckers. Beyond my Roth IRA, most of my investment money goes into growing my own business, or other cash flow deals that I can have some control over. Would be interesting to know if that's a personality trend.

I'm similar. I have some very limited traditional investments (ie 401k or IRA) but I invest & re-invest in my business continually, inventory, tools, fixtures, real estate, vehicles. I can make 2x/3x annually on a dollar IF I choose the right inventory to invest it in and I can roll that inventory 5-10x a year. Of course like picking winning stocks, that is far from an exact science and I have hundreds of thousands in inventory that doesn't even turn once a year so I would have been better off investing that in plywood or toilet paper .

But, eventually someone will call and need the part so it doesn't really ever expire, just cost me annually on the books and the opportunity cost of that $$$. I need to be less emotional with my purchases. For example if I hear an xyz gasket is getting discontinued, I'll buy up everything my suppliers can get me. Next think you know I have 50 of them and we've sold 8 in the past decade. I like Cruisers, Cruiser parts and finding homes for those parts. I don't like having to think logically with purchases. Whomever is running CruiserOutfitters 3.0 (I'm 2.0) could likely really optimize by just yardselling many of those type of items. But as Grandpa always said, "you can't sell from an empty wagon".

Fortunately my Mrs. has retirement thru her work that we are trying to maximize to have some regular monthly income if/when we retire so we are not just pulling from whatever I save/build via my efforts and perhaps future sell-off or rental of real estate. My Gold Hill property will have to be worth 5 digits ($10,001) by the time I retire

 

[mesha]

I have realized that I am much less emotionally involved with dividend stocks than I am growth stocks. I don't care that much if they go up or down(to a certain extent) because I am still getting my dividends. A couple of stocks that I am invested in went down quite a bit, but I am still getting my dividends from them each month. I bought a bunch more because they were basically on sale. With growth stocks I get much more emotional when they go down. I am slowly increasing my monthly average dividend and it is addicting.

 

[mbryson]

I have realized that I am much less emotionally involved with dividend stocks than I am growth stocks. I don't care that much if they go up or down(to a certain extent) because I am still getting my dividends. A couple of stocks that I am invested in went down quite a bit, but I am still getting my dividends from them each month. I bought a bunch more because they were basically on sale. With growth stocks I get much more emotional when they go down. I am slowly increasing my monthly average dividend and it is addicting.

What are the best research parameters on dividend stocks? I've not had the greatest success with the dividend stocks

 

[nnnnnate]

Are dividends treated like regular income for tax purposes?

 

[TurboMinivan]

Are dividends treated like regular income for tax purposes?

Dividends come in two flavors: qualified and unqualified. Qualified dividends are taxed at the much lower long-term capital gains rates, whereas unqualified dividends are taxed at regular income rates. To be classed as a qualified dividend, the following three criteria must be met:

• The dividend must have been paid by a U.S. company or a qualifying foreign company.
• The dividends are not listed with the IRS as those that do not qualify.
• The required dividend holding period has been met.

The holding period is usually the main point. The IRS requires investors to hold shares for a minimum period of time to benefit from the lower tax rate on qualified dividends. Common stock investors must hold the shares for more than 60 days during the 121-day period that starts 60 days before the ex-dividend date, or the date after the dividend has been paid out and after which any new buyers would then be eligible to receive future dividends. So as long as you aren't day trading, it is pretty easy to meet this requirement.

The next most common catch is that a select few dividends are 'blacklisted' by the IRS as never being qualified. The most common examples are REITs and MLPs--their payouts are always taxed at regular income rates whenever they are assessed tax. (If you invest inside a Roth account like I do, REIT dividends are never taxed. MLPs, though, will still generate a tax bill if you exceed a certain amount.)

Anyway, that's the short version.

 

[TurboMinivan]

What are the best research parameters on dividend stocks? I've not had the greatest success with the dividend stocks

Hmm. What do you mean by "I've not had the greatest success," exactly? Poor dividend growth? Low capital (share price) appreciation? Frequent dividend cuts?

 

[mesha]

I started with dividend aristocrats and kind of went from there. I spread out the sectors I invested in and some safe and some more aggressive. I don’t know what I am doing. I just do what makes sense in my brain after I research.

 

[TurboMinivan]

I started with dividend aristocrats and kind of went from there.

Quite frankly, this is an excellent strategy, especially for those who are new to dividend investing. To aid your research, there is a member at Seeking Alpha who gathers and prints a quarterly report which ranks all current Dividend Aristocrats by numerous quality metrics. His most recent report was just published on September 24th. Do a google search for 'dividend aristocrats ranked by quality scores' and you'll find it. I suggest printing it out and studying it carefully--I always do.

$.02

 

[Greg]

So the company I work for (UPRR) started offering employee stock purchasing plans this Summer, at 40% off current price. I'm a bit suspect of their motives, but UP stock has been climbing steadily. I couldn't help but sign up for the program, putting 2% of my check into it. It's currently at $225/share.

 

[RockChucker]

I always max out the employee stock purchase plan at my work and immediately sell. The way I see it is a high yield savings account. I don’t care to hold the stock long term even though I know I’d pay less tax.

 

[N-Smooth]

So the company I work for (UPRR) started offering employee stock purchasing plans this Summer, at 40% off current price. I'm a bit suspect of their motives, but UP stock has been climbing steadily. I couldn't help but sign up for the program, putting 2% of my check into it. It's currently at $225/share.

Take full advantage of it IMO. My work provides 15% off the better price, start of (6 month) period or end of period and it almost always works out to be a sweet deal. When my wife started there 15ish years ago the stock was like $20 and now it’s hovering around $700. I regret so much! A few years ago when it hit like $300 a co-worker that had been there for like 20 years retired on it. He was like 50. Now I bet he looks at the prices and wishes he would’ve waited until it hit $5, 6 or $700 🤣

 

[mesha]

Take full advantage of it IMO. My work provides 15% off the better price, start of (6 month) period or end of period and it almost always works out to be a sweet deal. When my wife started there 15ish years ago the stock was like $20 and now it’s hovering around $700. I regret so much! A few years ago when it hit like $300 a co-worker that had been there for like 20 years retired on it. He was like 50. Now I bet he looks at the prices and wishes he would’ve waited until it hit $5, 6 or $700 🤣

I bet he is having too much fun being retired rather than working to worry about it.

 

[Greg]

I always max out the employee stock purchase plan at my work and immediately sell. The way I see it is a high yield savings account. I don’t care to hold the stock long term even though I know I’d pay less tax.

I'm still not sure how I'm going to play my company stock option, I will probably let it sit for 6 months and see how things are going at that point, then decide if this is going to be long or short term.

Take full advantage of it IMO. My work provides 15% off the better price, start of (6 month) period or end of period and it almost always works out to be a sweet deal. When my wife started there 15ish years ago the stock was like $20 and now it’s hovering around $700. I regret so much! A few years ago when it hit like $300 a co-worker that had been there for like 20 years retired on it. He was like 50. Now I bet he looks at the prices and wishes he would’ve waited until it hit $5, 6 or $700 🤣

At this point, 2% is pretty decent for me... that ends up being around $2000 in share purchases per year and worth around $2800, if the share price doesn't change much.

UP stock recently reached an all time high and the company has been squeezing every bit of value that it can out of its ROI. I don't see the stock values shooting up like crazy, honestly.

I'm already paying 12% into RR retirement, 10% into my 401k and now 2% into stock options. That's 24% of my salary going into retirement/investments.... I think that's plenty.