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(02-12-2019, 12:36 PM)fenders53 Wrote: (02-12-2019, 12:23 PM)Otter Wrote: (02-12-2019, 11:58 AM)fenders53 Wrote: (02-12-2019, 11:42 AM)Otter Wrote: (02-12-2019, 11:35 AM)vbin Wrote: Given current market, I want to take money off the table from volatile stocks whenever there is an opportunity. FB will provide another opportunity to enter again
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I have done this in my 401k, which is 90% ultrashort bond fund at the moment. The DGI stuff in taxable accounts I just allow to keep doing their thing.
Vanguard ultra-short bond fund is where I have been hiding my Div and options selling premiums. Money I may choose to use in 2022-23. The fund's yield is pretty much a given but I sure never expected the share price to rise like it has lately. My very high div stocks are flying too. The market may be running but people are scared IMO.
I went heavy into the ultrashort funds at the end of last August. Just saw this article on SA:
https://seekingalpha.com/news/3432192-in...-bear-baml
Love the bullet-point for "contrarian buy signal." Gotta reel in the retail suckers for the blowoff top. However high that top may be, I can't see the risk/reward being anywhere close to 2009-2017 gains for whatever remaining time there is in this historically long bull market. Happy to leave my 401k assets in cash equivalents on the sideline and find a better buy-in point than S&P 500 P/E and Shiller P/E ratios that are near historic highs.
Yeah , who knows how high it goes. If I was 25yrs old I wouldn't care and that served me very well. A young person should keep a little cash on hand so he can buy the inevitable deals though. This market could run 50% more, but I doubt it, and not willing to wait ten years to break even on stocks purchased now at clearly high valuations. Not buying much until the market pulls back some. If that is next month then great. There are stocks out there in the buy range now, but the list is very short. It seems obvious that politics and the world economy will keep the market volatile enough to find some buys while we wait IMO.
I'm rapidly approaching 40, and hopefully "retired" at around 50 (don't intend to lay-around, but doing self-directed work on my own time is the goal). Intent is to then start laddering a portion of traditional IRA funds to Roth once income drops, prior to being able to withdraw from traditional at 59.5 without penalty.
So, my risk tolerance has dropped for the 401k nest egg. Even a three-year peak-trough-peak interlude could have a negative impact on that plan that costs years of time. Sure, maybe returns are higher if I leave everything in a mix of low-fee equity index funds, but I just don't see the risk/reward there, and was happy to remain fully invested in equity index funds for the entirety of 2009-2017 (even when there were lots of prior "market overvaluation" calls by multiple pundits during that period).
Then again, the best laid plans of mice and men . . .
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Bought some OXY and AMGN. As well as an ultrashort fund. I think this market needs a correction and is way extended at the moment. I see a few bargains and most are in the oil patch sector. APC, OXY, PSX, VLO ect.
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Stockguru I agree on oil. I took a position in OXY yesterday and a new position in CAH and added to UNH today.
Its getting harder by the day to find bargains. APC looks interesting as well at $42
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02-12-2019, 03:23 PM
(This post was last modified: 02-12-2019, 03:24 PM by fenders53.)
(02-12-2019, 12:55 PM)Otter Wrote: (02-12-2019, 12:36 PM)fenders53 Wrote: (02-12-2019, 12:23 PM)Otter Wrote: (02-12-2019, 11:58 AM)fenders53 Wrote: (02-12-2019, 11:42 AM)Otter Wrote: I have done this in my 401k, which is 90% ultrashort bond fund at the moment. The DGI stuff in taxable accounts I just allow to keep doing their thing.
Vanguard ultra-short bond fund is where I have been hiding my Div and options selling premiums. Money I may choose to use in 2022-23. The fund's yield is pretty much a given but I sure never expected the share price to rise like it has lately. My very high div stocks are flying too. The market may be running but people are scared IMO.
I went heavy into the ultrashort funds at the end of last August. Just saw this article on SA:
https://seekingalpha.com/news/3432192-in...-bear-baml
Love the bullet-point for "contrarian buy signal." Gotta reel in the retail suckers for the blowoff top. However high that top may be, I can't see the risk/reward being anywhere close to 2009-2017 gains for whatever remaining time there is in this historically long bull market. Happy to leave my 401k assets in cash equivalents on the sideline and find a better buy-in point than S&P 500 P/E and Shiller P/E ratios that are near historic highs.
Yeah , who knows how high it goes. If I was 25yrs old I wouldn't care and that served me very well. A young person should keep a little cash on hand so he can buy the inevitable deals though. This market could run 50% more, but I doubt it, and not willing to wait ten years to break even on stocks purchased now at clearly high valuations. Not buying much until the market pulls back some. If that is next month then great. There are stocks out there in the buy range now, but the list is very short. It seems obvious that politics and the world economy will keep the market volatile enough to find some buys while we wait IMO.
I'm rapidly approaching 40, and hopefully "retired" at around 50 (don't intend to lay-around, but doing self-directed work on my own time is the goal). Intent is to then start laddering a portion of traditional IRA funds to Roth once income drops, prior to being able to withdraw from traditional at 59.5 without penalty.
So, my risk tolerance has dropped for the 401k nest egg. Even a three-year peak-trough-peak interlude could have a negative impact on that plan that costs years of time. Sure, maybe returns are higher if I leave everything in a mix of low-fee equity index funds, but I just don't see the risk/reward there, and was happy to remain fully invested in equity index funds for the entirety of 2009-2017 (even when there were lots of prior "market overvaluation" calls by multiple pundits during that period).
Then again, the best laid plans of mice and men . . .
My financial plan was to retire at 53 and I have a 25yr old piece of paper to prove it.  I made it happen for three years and marked off some of my bucket list lol. Now back to work at least part-time so I can stay out of the IRAs until I can get them without the massive penalty for early withdrawal. It mostly worked out and I am happy, surely better off than most. My daughter turned out to be a little more expensive than I planned and I need to work a few years. She is 22 and she is supposed to be free now lol. Like you said, the best laid plans....
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All these oil stocks currently pay over a 3% yield. I did some calculations. To me OIL stocks represent the best values in the market. Below is with only 15k invested.
Symbol div shares bought (50) Dividend payout per year
RDS .94 50 shares cost $3150 ($188 in dividend payout per year)
TOT .72 50 shares cost $2700 ($144 in dividend payout per year)
OXY .78 50 shares cost $3200 ($156 in dividend payout per year)
XOM .82 50 shares cost $3700 ($164 in dividend payout per year)
CNQ .335 50 shares cost $1300 ($67 in dividend payout per year)
SU - .36 50 shares cost $1600 ($72 in dividend payout per year)
Total dividends from about 6 stocks per year $791
$15,650 cost for all 6 stocks to buy at 50 shares each (in 20 years of dividends will make up costs of stocks) $15,820 in dividends if you hold for 20 years. This does not include dividend raises.
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(02-12-2019, 05:42 PM)stockguru Wrote: All these oil stocks currently pay over a 3% yield. I did some calculations. To me OIL stocks represent the best values in the market. Below is with only 15k invested.
Symbol div shares bought (50) Dividend payout per year
RDS .94 50 shares cost $3150 ($188 in dividend payout per year)
TOT .72 50 shares cost $2700 ($144 in dividend payout per year)
OXY .78 50 shares cost $3200 ($156 in dividend payout per year)
XOM .82 50 shares cost $3700 ($164 in dividend payout per year)
CNQ .335 50 shares cost $1300 ($67 in dividend payout per year)
SU - .36 50 shares cost $1600 ($72 in dividend payout per year)
Total dividends from about 6 stocks per year $791
$15,650 cost for all 6 stocks to buy at 50 shares each (in 20 years of dividends will make up costs of stocks) $15,820 in dividends if you hold for 20 years. This does not include dividend raises.
Unsolicited advice alert:
On that list I like RDS and XOM as long-term holdings. I also like CVX, which is not on the list. Oil/gas can be a volatile sector, just like many other commodities, and the lows can last a lot longer than you may think. Oil stocks were a great buy in the mid 1980s, but price recovery in the sector didn't occur until nearly fifteen years later. Then they went on a tear for nearly a decade before hitting the 2008 highs and staying historically high through 2013.
I think some companies in the sector represent decent value at the moment, but I don't like to ever have too much of my portfolio allocated to oil/gas stocks. They have their own narrative and there's hardly anyone on Earth who can predict it with any certainty. The shale boom of the past decade is just the latest in the industry's long history of sudden, disruptive, and unexpected changes. Shame about all those deep-sea drillers that spent billions manufacturing MODUs and drillships, then went bankrupt, or are a pale shadow of their former selves. Pick the biggest players in the industry that have robust upstream and downstream operations, a long history of successfully rewarding shareholders through good times and bad, and don't put too much of your portfolio in that basket.
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(02-12-2019, 06:10 PM)Otter Wrote: (02-12-2019, 05:42 PM)stockguru Wrote: All these oil stocks currently pay over a 3% yield. I did some calculations. To me OIL stocks represent the best values in the market. Below is with only 15k invested.
Symbol div shares bought (50) Dividend payout per year
RDS .94 50 shares cost $3150 ($188 in dividend payout per year)
TOT .72 50 shares cost $2700 ($144 in dividend payout per year)
OXY .78 50 shares cost $3200 ($156 in dividend payout per year)
XOM .82 50 shares cost $3700 ($164 in dividend payout per year)
CNQ .335 50 shares cost $1300 ($67 in dividend payout per year)
SU - .36 50 shares cost $1600 ($72 in dividend payout per year)
Total dividends from about 6 stocks per year $791
$15,650 cost for all 6 stocks to buy at 50 shares each (in 20 years of dividends will make up costs of stocks) $15,820 in dividends if you hold for 20 years. This does not include dividend raises.
Unsolicited advice alert:
On that list I like RDS and XOM as long-term holdings. I also like CVX, which is not on the list. Oil/gas can be a volatile sector, just like many other commodities, and the lows can last a lot longer than you may think. Oil stocks were a great buy in the mid 1980s, but price recovery in the sector didn't occur until nearly fifteen years later. Then they went on a tear for nearly a decade before hitting the 2008 highs and staying historically high through 2013.
I think some companies in the sector represent decent value at the moment, but I don't like to ever have too much of my portfolio allocated to oil/gas stocks. They have their own narrative and there's hardly anyone on Earth who can predict it with any certainty. The shale boom of the past decade is just the latest in the industry's long history of sudden, disruptive, and unexpected changes. Shame about all those deep-sea drillers that spent billions manufacturing MODUs and drillships, then went bankrupt, or are a pale shadow of their former selves. Pick the biggest players in the industry that have robust upstream and downstream operations, a long history of successfully rewarding shareholders through good times and bad, and don't put too much of your portfolio in that basket.
Thanks for that oil dividend list. I have never been a big fan of oil as a long term investment. It seems there is always more bad news then good in that sector. The only names I own are OXY, CVX and PSX. I remember way back when all the oil stocks were at all time lows at $20 a barrel. Back then they represented a great buying opportunity. I think out of all the names OXY represents the best value in the oil patch. The stock could reach $80. Just have to have a lot of patience in this sector. And I agree spread your money into other sectors.
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Very much agree with Divmenow on oil. There was a time it was a good buy and hold, but the past few decades have been an under performer for years as the down cycles can be fairly long. You have to be willing to jump in when the smaller leveraged players are going bankrupt, and take money off the table before the next down cycle. I've been bitten hard on the small to mid-sized players repeatedly over the decades. I own CVX and BP but was a little late getting in yet again. I won't get caught holding it too long if I can possibly avoid it. If I was going to hold one long it would be XOM, CVX, RDS, and BP. Not necessarily in that order.
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small disclaimer: I like to keep my portfolio at about 20 stocks so one for oil is enough for me, it's RDS but I'm sure some of the other big ones would fit my criteria very well.
In my opinion oil is a good business to be in right now. Yes it's volatile, yes there are some veeeery long down cycles, yes there are companies that look good and they go bankrupt in a couple of years. But overall I really like what happened to the industry in the last down cycle: Profitability has gone through the roof since the companies had to adjust... those who didn't adjust are gone... those who did are making more profit at $60 a barrel today than they were making at $100 a barrel back in the day.
I would never have a large percentage of my assets in oil related companies but I think they are quite decently priced for long-term hold while the markets in general feel a little overpriced.
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Oil will do OK enough until the next time the world economy has another recession, or renewables stagnate oil demand permanently. IMO the latter isn't coming as soon as many predict. All I know for sure is when we get into the last half of an energy cycle, it always looks like the future is very bright for the industry, right up until it suddenly isn't and you are sitting on dead stocks for years hoping they don't cut the Div in half. This makes everything but the majors nothing but a swing trade for me. (and I finally gave up on that). The others pay those stupid high divs now because they have to or investors won't take the risk.
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(02-13-2019, 07:50 AM)fenders53 Wrote: Oil will do OK enough until the next time the world economy has another recession, or renewables stagnate oil demand permanently. IMO the latter isn't coming as soon as many predict. All I know for sure is when we get into the last half of an energy cycle, it always looks like the future is very bright for the industry, right up until it suddenly isn't and you are sitting on dead stocks for years hoping they don't cut the Div in half. This makes everything but the majors nothing but a swing trade for me. (and I finally gave up on that). The others pay those stupid high divs now because they have to or investors won't take the risk.
Sometimes the energy sector even helps kick start the next recession when supply crunches drive the price to unsustainable levels.
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Exactly that. Everyone involved knows there is a sweet spot for oil prices or your boom will be very temporary.
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