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

Noahfecks

El Destructo!
If you didn't get out before this crash you are in for the ride now. Be calm, stay in it, selling now only locks in your losses, if you bought quality stay with it. You may consider repositioning into value stocks that may be down at the moment but should have good earnings reports through this crisis.

If you were sitting on the sidelines I would stay there until we know how much longer this foolishness will last. If the market is not confident we will get back to work by the end of April it's going to continue to slide down sharply.
 

TurboMinivan

Still plays with cars
Location
Lehi, UT
Here is a philosophical update of sorts on the evolution of my Roth account (and my own mentality).


As you may (or may not) recall, when I first opened this account I hastily deposited $5000 and split it evenly into two index funds. Okay, I did do a tiny bit of screening and research when I chose the exact funds, but nevertheless it was mostly a knee-jerk move because the only thing I knew I wanted to do at that time was "start a Roth IRA."

But then I began reading and studying what others have done. I quickly decided I wanted to invest in individual dividend stocks rather than index funds. But, once again in hindsight, I didn't put nearly enough thought into it. Instead, early in my reading I found a generic Dow dividend strategy and blindly followed it by spreading my next $1000 deposit among four Dow stocks.

I continued reading, studying and learning. I winced when I realized the above Dow strategy did not delve into company fundamentals at all--it only selected stocks based on yield and price. Worse, that strategy seemed to focus almost entirely on maximizing overall capital gains. I gradually began to realize I want my account to focus on the dividends themselves. I now have a fundamental goal for this account: to offer dependable, growing (and tax-free) monthly income to supplement my 401(k) and whatever other income I may have in retirement. I can completely ignore stock price fluctuations and focus on the profits which my companies will share with me. Just as I was coming to this realization, the market crash began. One of my index funds was still up from its initial purchase, so I quickly sold my entire position in it, then turned around and put all those proceeds into a few individual stocks. The other index fund was left alone.

So far in 2020, I've managed to deposit another $6000 into my account (via numerous smaller deposits). My strategy has continued to evolve over the course of these deposits. I've finally settled into the idea that I want to diversify by owning portions of perhaps 25-30 companies across a variety of sectors. Initially, I will "build out" by investing initial portions in different companies; I've initially decided a "full portion" represents an investment of $1000 in one company. In the future when I feel I've got a stake in a sufficient number of companies, I will then begin to "build up" by adding more money to these companies. Now that I've learned to do a little digging into some basic corporate financials before I make further purchases, my hope is to select healthy companies which will thrive and produce reliable dividends for many years to come. If things go as hoped, I plan to never sell any of my shares. But as we all know, not everything goes as hoped... so when it eventually comes time to start building up, I can assess my holdings and see if I should sell out of any of my companies and replace them with others.

My remaining index fund has finally come back up almost to the break-even point (ie, $2500). Once it crosses that threshold, my plan is to sell out of it entirely and re-invest those funds into more stocks. I will add some of it to a few of my current positions to increase them to "full portion" investments, and the rest will be used to buy a full portion of another as-yet-unowned company.
 
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glockman

I hate Jeep trucks
Location
Pleasant Grove
When this whole COVID deal hit and the Feds announced they were going to send checks out, I watched my idiot neighbor who is the type of person that wins the lottery and is broke in 5 years. I knew the day he got his check because he bought a bunch of useless stuff that will depreciate. I decided if the government was going to give me $3500 of my own money back and charge me $10k for it over the next 5 years, I better try and recoup some of that loss.
I moved $5k to my stock account in April. I've been swing trading with some help from a friend and I'm currently at $8k. I've learned a lot in the last two months and it's been pretty fun. He showed me how to set stops to limit potential losses and his strategy for doing so. I'm going to keep playing with the governments leased money and see how far it goes.
 

TurboMinivan

Still plays with cars
Location
Lehi, UT
Earlier this month, my remaining index fund value crossed my desired value threshold and I sold out of it as planned. That let me fill out my portions of three different holdings, plus I bought a full portion of a new company. The remaining funds were added to two other existing holdings, though neither of them are up to full portion size yet.

Just this morning, I transferred one last thousand dollars into my account. I say last, because this maxes out my allowable deposit for the 2020 calendar year. I used those funds and bought a full portion (18 shares) of VZ. With the little bit of cash remaining, I was able to just barely buy one more share of AFL (a holding that is not yet up to full size). Now I have $0.04 remaining in my account. :rofl:

My short-term goal for 2020 was to get my account to where it is paying me $50 each month in dividends. After today's purchases, my current estimated income for July/Aug/Sept is $59.12, $50.01, and $50.51 respectively... so it looks like I've made that happen. Since I have all dividend payments set for automatic re-investment, those figures should continue to grow for the remainder of the calendar year.

My long-term goal is to have this account generate $2500+ per month by the time I retire. This is difficult to predict, but I've fiddled with a few dividend growth calculators and I think I can make this happen. We'll see.
 

TurboMinivan

Still plays with cars
Location
Lehi, UT
Me and my big mouth.

A couple posts above, I mentioned my long-term plan is to focus on and purchase solid, healthy companies and then never sell any of my shares. I also said that this strategy assumed things go as planned, which doesn’t always happen. Well, something happened which I wasn’t expecting.

I admit it: I was way overweight on Dominion. Rather than stopping at ~ $1000 invested, I was into them about $2400. As some of you might know, Dominion had been working on a huge new pipeline project for a while now... but their plan just collapsed and, earlier this month, they announced they were completely abandoning the whole project. This instantly saddled them with billions of dollars of debt that now had no hope of generating income to pay for itself. Worse, they also decided to sell off most/all of their gas business to Berkshire, so they lost a lot of income potential there, too. Now that their income is so tight, they announced that later this year their dividend payout would be cut nearly in half. That’s the LAST thing I wanted to hear.

As usually happens when a company announces a dividend cut, their stock price instantly plummeted. So did my heart. But then a strange thing happened: for a week and a half or so, their stock price stayed flat... and then it began to climb right back. Soon it was as high as before the dividend cut announcement. I took advantage of this opportunity and sold out of my entire position. This locked in a small realized gain, and now I could re-invest all those funds into companies that haven’t announced a dividend cut. After a few days of research and thought, I filled out portions of three other holdings, then bought a full portion of IBM. Now my projected income amounts are $50.73/$49.13/$60.47 for the next three months. Thankfully, this effectively puts me back at my goal of at least $50/month by the close of 2020.

Until the next bit of bad news, at least.
 

Greg

Make RME Rockcrawling Again!
Admin
So after doing pretty well with my 401K and feeling more comfortable with investing, I setup an account with Robinhood to try my hand at investing in the stock market.

Initially, I set this up in January.... not long after that, the Coronavirius effect hit the market and things crashed pretty hard. My thought was that right then was a great time to buy stocks, because most everything was cheap! I put $2500 into my account to 'play' with, knowing that it's quite possible to loose it, if I wasn't careful. At first I bought a handful of stocks from well known companies and made a little money, but it seemed like a lot of up & down. Obviously the market is pretty unstable right now, so that's understandable.

After talking to a coworker about Penny Stocks (he made enough money on penny stocks to buy some acreage in CO), I decided to buy some penny stocks and see what I could do. Basically, penny stocks are stocks under $5/share. Now these are even more risky, the same coworker has lost thousands, after doing quite well early on. That said, I purchased almost 550 shares from one company, at $2.60/share.... and they're currently trading at $5.40/share. :oops::eek: It gained over $1000 on Monday alone.

I currently don't have my Robinhood account too diversified, only own stock in 2 companies. I'm hoping I can get into the several thousand dollar range, then split up my penny stock trading between 4-5 companies and spread the risk.

I just did some reading on penny stocks to purchase and came up with the one, looked at his history, the company and plenty of reading about where it was going from here. I don't claim to know what I'm really doing with penny stocks, but at this point it's working out just fine! X-D I know there are guys that do this for a living and there are groups out there that you can join for a hefty fee, and go along for the ride with the big investors. Maybe some day...
 

mbryson

.......a few dollars more
Supporting Member
My dad has played penny stocks (and "junk" coins) my whole life. Predictably, he's had a lot of feast/famine periods in his life. He's currently HEAVILY leveraged in silver and silver mining/industrial stocks from when silver was between $32-35 (that's a while ago--10ish years I'd guess? It's been between $13-18 for a LONG time now. He's not getting any younger either. They are getting by but it's not my vision of their retirement years. It's their life and they live it, not me. They accept the position they are in but I know it's caused a LOT of marital friction over the years. Not sure where it's at with them being 71 and my dad working a "labor" hospital job after retiring from the Post Office as manager type. Again, their business, not mine but we are trying to do things differently and on our terms). He has sound logic in that the silver/gold relationship is WAY out of historical whack and silver is cheaper but almost as effective in industrial applications. The market just hasn't responded to his logic yet. You can KILL it on penny stocks but you can also make your life pretty miserable. I like Greg's attitude of don't invest what you can't afford to lose.

From my observation, I think you do like Greg did and do some significant research on multiple companies, diversify and hope for the best. If you hit it big on a $10k primary investment or thereabouts, it could really make a big change in your life. As a child of an "investor", I find it exhausting to watch.
 
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cruiseroutfit

Cruizah!
Moderator
Vendor
Location
Sandy, Ut
My dad has played penny stocks (and "junk" coins) my whole life. Predictably, he's had a lot of feast/famine periods in his life. He's currently HEAVILY leveraged in silver and silver mining/industrial stocks from when silver was between $32-35 (that's a while ago--10ish years I'd guess? It's been between $13-18 for a LONG time now. He's not getting any younger either. They are getting by but it's not my vision of their retirement years. It's their life and they live it, not me. They accept the position they are in but I know it's caused a LOT of marital friction over the years. Not sure where it's at with them being 71 and my dad working a "labor" hospital job after retiring from the Post Office as manager type. Again, their business, not mine but we are trying to do things differently and on our terms). He has sound logic in that the silver/gold relationship is WAY out of historical whack and silver is cheaper but almost as effective in industrial applications. The market just hasn't responded to his logic yet. You can KILL it on penny stocks but you can also make your life pretty miserable. I like Greg's attitude of don't invest what you can't afford to lose.

From my observation, I think you do like Greg did and do some significant research on multiple companies, diversify and hope for the best. If you hit it big on a $10k primary investment or thereabouts, it could really make a big change in your life. As a child of an "investor", I find it exhausting to watch.

See what silver has done in the recent month? Up 35% to $26.xx

It's on a major rally

82992.jpeg
 

Greg

Make RME Rockcrawling Again!
Admin

Based on the article above and considering the upcoming presidential election, I decided to sell all the stocks in my Robinhood account. I'm going to watch the market and see what things do over the next several months and probably get back in when things seem to be at their lowest.

I ended up with a 45% return, which makes me pretty happy!

My 401k is still doing pretty well, considering. 18% return since I started it a few years ago.
 

Greg

Make RME Rockcrawling Again!
Admin
Well, the FOMO got me.... I bought back in a couple weeks ago with my Robinhood account. I put 100% of what I had into Pinterest and it did quite well, selling today with a 40% gain.

Screenshot_20201028-164137_Robinhood.jpg


I picked up a couple more, just watching what they do. So far, my Robinhood account has seen a 120% return since I opened it. :oops:

I also tweaked my 401k holdings, dumped a couple poor performing options and reorganized where my money was going. My 18% return from when I started dropped down to 14.5% in the last few weeks, so I felt like it was time for a change.

I've said it before, but I enjoy this.... I'm pretty new to investing (and speculating) and making it work, but it's been a good experience!
 
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