Tag Archives: stocks

Dividend Stocks, Free Lunch Experiment #6

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Well, it’s time for another update!  The dividend payout rates have not changed and the overall appreciation of the stocks has raised!

The Free Lunch Experiment, which invests in dividend stocks, is my first true experiment here at MoneyReasons.com and was started with the article called: “Paying An Adult Allowance, A Lunch Experiment”.

In a nutshell, the experiment is that I want focused investments in certain dividend stocks to pay for my lunch when I go out to eat at work.

The real advantage is that the money I’m investing in, is money that I would have spent for lunch anyway.  In my opinion, this make this money free because it would have been spent!  So if I were to lose all of the money tomorrow, I would be sad, but it’s money that I wouldn’t have had anyway had I not started the experiment.  In other words, the first dollar saved was a 100% gain on what I had previously, which was a spent dollar.

So much like the reference in the movie “Blade“, the Lunch Experiment has all of the advantages, and not of the disadvantages of being an stock dividend investment.

Stock Name Anworth EV Energy Chimera
Stock Ticket ANH EVEP CIM
# of Shares 260 45 600
Orig. Price $7.84 $23.25 $4.01
Curr. Price $7.14 $38.25 $4.13
Orig Cost $2,038.14 $1,046.25 $2,404.80
Curr Value $1,856.40 $1,721.25 $2,478.00
Annual Yield 12.89% 7.92% 17.43%
Actual Dividend $59.80 $34.07 $108.00
Total Dividends $807.48
52 weeks 52
Dividend / week $15.53
Total Gain in
Stock Apprec. $566.46
% Change 10.32%
Amt Loaned to myself: $1,726
Amt paid back to date: $1,139
Amt Still Owned: $587.00

Previous Update:  Dividend Stocks, Lunch Experiment Update #5

Thanks for following me and my “free lunch” experiment!

-MR

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Another Big Stock Market Dip, What Did I Do?

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Yesterday, the DOW stock market measure dipped 187 points, so what did I do?

I did nothing!

The market responded to something going on over in the Chinese government as they try to control inflation in China.  I’ve seen similar announcement like this before, the market drops like a bowling ball dropped in a toilet, then during the following week,  it recovers its losses.  In some way it’s like a broken record…

What I should have done was buy more quality stock or other investments while the market was low, but I froze.  I actually have money sitting. waiting for such a dip, but it’s hard to take that leap of faith, and I hesitated.

The market also took new about Walmart sales dropping slightly for same store sales.  But like last year and the year before that, it’ll be the day after Thanksgiving and the amount of shoppers out in the market on that day, that will determine if holiday sales are boom or bust.

I’ll admit, part of the reasons I hesitated was because I didn’t have any particular stocks that I wanted to buy.  The reason I didn’t have any stock that I was looking at, was not because of any stocks per se, but instead because I hadn’t really been following the market as closely as I usually do.

If I had done my homework, and had a stock lined up…  I might have jumped in.  Even with a stock lined up though, it’s still a hard decision when the forces that be are knocking the market down like a UFC fighter (like the old version of Chuck Liddell) throwing a knockout punch.

Most of us follow our hearts and stay put in such market downturns, or even worse sell shares…

Was anyone brave enough to jump in yesterday?

-MR

My 90% Dip In The Value Of One Of My Stocks

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In the past I was lucky, during the tech bubble  pop, I was lucky enough to be in ebay.  Not only did ebay hold it share price, it double in the 3 years that I had it.  I practically felt like a genius (Note, I not longer own ebay)!

With the “Great Recession“, things were different…  I had some stocks that were in the high beta category.  High beta stocks are stocks that can have wild fluctuations in share price based on the general stock market direction.  One of my worse performing stock dropped 90% in price in 2008!  Just to illustrate what a huge drop that is, if I had $1,000 invested prior to the “Great Recession”, the value of my investment would only be $100!  Ouch!!!  when I realized this, I started to get sick to my stomach, but then I remembered that most of my portfolio is invested in mutual fund and other more stable stocks, not to mention the equity in my house (which took a much smaller hit).

Since my portfolio was well diversified (including asset class), the market downturn didn’t make me worry as much as it probably did with others.  The key is to just have a small percentage of your investment in such high beta stocks (also called speculative stocks) like I talked about in the previous paragraph!  By having asset class diversification, I was able to keep my cool and leave my investments alone so they could recover!  All my accounts are positive again.  My high beta stock is only down 60% and recovering quickly!  I still might use it for tax purposes though instead of letting it fully recover 🙂

How is your investment portfolio diversified?  Do you have all of your eggs in one or many baskets?

-MR