Rob,sounds like you and I need to do some talking!
I had no idea you knew that much about investing in the market.
I have been wanting to for a while,but have no Idea where to start.
I would say this is the time to buy stock,the market probably won't dip too much farther. Then it's all up from there.
No prob, the difficult part is determining what the past dividends were, when you look them up on line, they don't usually state that clearly, sometimes they list it as "yield". Pimco Global. ticker PGP pays a monthly dividend, has been anywhere from 7.5% to 10.5% APR in the past, and since its monthly, it compounds a little quicker while others are quarterly, 6 months, or yearly.
Sometimes I just invest in some that seem like they have growth potential and spread out my money alot and then come back in a a year or so and see how they performed, those that paid good dividends I move more $$ to, those that didn't and didn't grow, I get rid of.
You can usually bank on commodities paying good dividends, utilities, and gold/mining companies. Others such as energy funds had huge growth, but very little dividends. Real Estates funds are down too right now, I suspect they will continue down for a while since the market will be flooded with commerical and residential foreclosures, but in a year or so may be prime buying time..real estate hasn't paid very good dividends either the past few years. I try to stay with funds that are something that people will always need... energy, healthcare, drug companies, and then some bonds..municipal and corporate. My goal is to live primarily off investiments in say 5 or so years, then work to supplement my income doing something I like to do
Oh..and another good tip....invest in the same stocks Warren Buffet does...he says he buys based on stocks he thinks are good deals...such as Burlington Northern Sante Fe...he bought tons of their stock...so I bought some too....he's made billions doing it his way..so if it works for him, I can follow in his leads..just have to be ready to act fast.
Let me know...you'll start with 1 or 2 funds...and then before you know it you have 10-15 with a few $k each in them if you are good at saving money in order to open the funds to begin with...you won't start with a few $k and turn it into $100k.....you have to systematically save and put into it and it takes forever to build it up...but after several years, its not uncommon to make $15k in a year...but you can also loose that much in a year too...I've lost more than $25k just in 2 months, but made well over that last year... SO lets hope the market has hit its low point...but bank failures like Bear Sterns happening overnight is scarey....all it takes is a few more banks for that to happen too and its the great depression all over...... Speaking of which..I also invest in Reverse Convertibles..one of which was Citigroup....
The basis of a RC is that you put up usually $10k min into a company that pays you interest of say 10% to as high as 18.5%..the term is usually 3 or 6 months.... the premise is still based on stock price, and there is a "knock out price". If the stock price of the said company does not fall below the "knock out" price, which is usually 20 or 25% of the starting price...you get all of your $$ back at the end of the term, and the company pays you the agree % APR each month. If the stock price falls below the "knock out" price, then you get however many shares of the stock that $10k would have bought at the start, but they still pay you the agreed % APR for the term no matter what the stock price is...
So back to Citigroup....I put in $10k for a 6 month term paying 12.5%, the stock price knock in price was $40...the "knock out" or cushion was 20%, which would have been $32....well thei rstock has plunged to about $22 now....so at the end of the 6 month term I only get back 55% of my investiment...$5500...a $4500 loss, but it did make me $625 in interest in that 6 months..so net loss was $3875...so its not all profitable and you have to be ready to stomach that kind of loss....I had Comcast and Micron Tech do the same thing just not as big of a loss this past 6 months.
