Stocks Are Down - Good Time to Start a Portfolio!
So, the last two weeks, the stock market has been going nuts! Oil and all of the things that surround it have been making the prices of many companies swing wildly both up and down, but mostly down, and this has been great for opportunistic investors who like to buy low, and hold, or sell high later. I happen to be the kind who wants to buy low and hold, but if I have to sell later, it still works out pretty well!
I'm not new to the stock market, but I am starting a new portfolio. I had built up a great portfolio of shares from high quality companies that all pay dividends. I had to sell of all of it last year, however, as my money was used better elsewhere. Now that I'm ready to start buying again, (and have already started), I figured I'd document some of it here on my blog. I don't have much else to write about, and not only do I hope that somebody will read it and find it entertaining, but I find it personally useful to write down what I've done and what I'm doing. Gives clarity.
Anyway, so, what stocks did I buy?
BNS (Bank of Nova Scotia) at $37.77 x 4 shares
T (AT&T) at $33.85 x 6 shares
MAIN (Main Street Captial Corporation) at $26.73 x 7 shares
JNJ (Johnson & Johnson) at $99.66 x 1 shares
UNP (United Pacific Railroad) at $76.72 x 4 shares
All in all, I'm pretty happy with everything, although I definitely could have done better with JNJ and UNP. Oh well, I was happy at the prices I bought at, and if I can get the oppportunity to buy more at a lower price in the future, I'll be happy then too!
Why Buy Stocks at All?
I buy stocks for three reasons:
The first reason, is because it's a great way to not spend money! Does that sound wrong to you? It might! Well, I'll explain. Basically, I'm guilty of spending the money that I make, and not saving enough of it. When I "buy" stocks, I look at it like I'm actually shoveling money away. I don't intend to sell these shares (unless the companies end up sour), and I hope to retire one day with the income these stocks could one day provide me. So, for me, it's not spending money, it's putting it away.
The second reason I buy stocks is because it's a smart investment. Wealthy investors typically invest in stocks for two reasons that I'm aware of. To either "preserve wealth", or to evade taxes. I do it because I want to retire from it one day, and if it preserves wealth, well, I have no wealth, but I can definitely keep adding to the pot until it turns into "wealth", even though I have no clue what that number will be for me.
The third reason why I buy stocks is because it's interesting and fun. I like reading up on companies, markets, trends, politics, and all that surrounds it. I also get a rush out of pressing the buy button. It is, after all, gambling. As far as I can tell, its just a smarter and classier way to gamble.
Why Did I Buy The Stocks I Bought?
To be honest, I just look through a list of high quality dividend stocks, see what a few of the analysts say about them, make some weird, unexplained calculations in my head about why the price looks right or wrong, and then I buy it. That's it. I have been watching the same stocks for about 4 years, and over time you just kind of know, "hey, thats a good company, and the price seems right". So, it's at that moment that I look to see if notables in the long-term dividend investing community have purchased in the last 6 months, and if they have, I check the numbers they bought at (or guess the price they bought at based on the time of publication), and I make my decision from there. Not a fancy method, but I have always come out on top.
Anywho, thanks for checking in!
Share your thoughts with a comment, I'd love to strike up a convo if you invest, or have an opinion on anything I wrote here today!