Flat Times

A couple of stocks in Cathy's account have me concerned about the way I set her account up. Sony and HP are both breaking through support to the down side, and I don't really have a solid rule for when to bail on a stock with her stuff. That's the great thing about the DOGS plan - if a stock doesn't have all the criteria, boom! your out! Both stocks are still paying a dividend, but even that isn't a criteria for Cathy. Her account just is relying on if the stock is a socially-responsible company. With my two sons' accounts, I know each company HAS to pay a dividend. That's a pretty good rule right there. If a company gets into real trouble, often the dividend is the first to go.

This market is getting into another one of it's flat times. In fact, it's looking like it really wants to go lower. Could be the election hangover. It could also be getting ready for the next step up. Don't know, don't care. We have cash to buy more if it does a larger correction.

Who cares?

Of course, right now we are all seeing a ton of political stuff going on with the elections coming up. I recently saw an ad asking "What will happen in the market if Obama gets re-elected?" My first reaction was 'Who cares?'

Actually, that's still my reaction. The market can be ready for a serious correction. I say 'can be' because, as far as I'm concerned, there has been enough time for any accounts that went through the last debacle (if they were using my methods) to accumulate plenty of cash in the case of a significant correction. Now, we probably need some more upside to really do well in the case of something more serious than just a 'correction,' like we saw in 2008. Those don't come around all that often, though. Yes, we've been hearing a bunch of doom-and-glommers saying how the world economies are on the brink of complete collapse...looking at history, however, collapses don't usually come after a period of caution and mild fear. They usually come after everyone thinks that nothing bad can ever happen again, and then when something bad does happen, they switch into extreme fear mode, and then the shit really hits the fan.

Yeah, there could be a mild bear run around the corner, but I think we've got some more 'wall of worry' to climb, with an occasional slip, before we see anything significantly downward.

At this point, though, like I said, it doesn't really matter. What a great position to be in - wouldn't you agree?

I had another transaction in my account this month, which indicates the market continues to march on, in what I would consider a "Wall of Worry" type of pattern. There seems to be constant concern, especially in the world economy, but the market keeps on going up amid occasional setbacks. Now, a week later, I find my account back in selling territory already. We could be in the middle of a sharp surge that could result in a fairly large amount sold off next month. You just don't know until the day of reconcile. I was thinking today about the problem with Cathy's account. There is nothing to determine if a stock is no longer eligible for that particular trading plan, other than being a stock that is socially responsible. That alone will not keep the stock from going to nothing. I must think of a remedy to this, and maybe change it slowly over time. I might consider not having stocks that are under $10 per share. The boys' stocks all pay dividends, and that is the main rule, as if their dividend falls below a certain point, the stock will be replaced.

Apologies

I haven't posted in over six months, and I know that is not a good blogger's way of doing things. I will be more diligent in posting in the future. The market has been slowly rising since my last post, but has become flat, and a little volatile recently. Could be a sign of a top, but we've been saying that for how long now? This month, no activity, as far as any transactions, but quite a few in Cathy's in the last few months. This is actually the first one in four months that I haven't sold stock in her account. Mine had a couple at the end of last year/beginning of this year. We are accumulating quite a bit of cash in both of our accounts, and I am feeling pretty good that if something drastic were to happen in the market, we'd be in good shape. I can have full confidence that we would at least be able to buy a substantial amount of stock if the market were to tank. I know, that is a pretty general statement. How about - we're both now approaching 30% cash in our accounts. Now, ideally, at the top of a bull run, you want to be at 50% cash, but I don't think this thing has finished quite yet. I was just a few dollars from selling another batch in my account this month. At least we have a good amount now, as opposed to in 2009, when we were both scraping the bottom of the barrel. By the way, I did open new accounts (IRAs) for my older sons, and used the criteria for the stocks as mainly the amount of dividends they pay, as well as the price (to start.) The dividends are all pretty close to 5% on all the stocks, and they are all under $30. Since both boys have less than $2000 to invest, I had to keep the stock prices as low as possible. A lot of them are under $20. There aren't very many recognizable stocks in the bunch, other than H & R Block, AT&T, and GE, but I figure the dividends being paid make up for that. I didn't go nuts on the amount of the dividends. I know that if you get a company paying 9% or more, that can be a bad sign. I checked to see how long they had been paying them to make sure they are relatively stable. I've done 3 updates so far, and neither account has moved much. Of course, neither has the market in general. You can be sure that if there is an upheaval either way, the stocks will move. That is the only thing in the stock market that is a sure thing.