How To Deal With Overvaluation Of A DGI Holding [View article]
if you are really confused about whether to sell MCD bcoz you have profit then you can use the covered call option or even simple sell half and wait. If it goes up the remaining half gained more. If it goes down buy the same amount you sold and decrease your cost basis. I would go with the second option since covered calls, or options in general, are not yielding very good since volatility is low. For some one selling options we want more volatility which boost the option premium.
How To Deal With Overvaluation Of A DGI Holding [View article]
RAS, i did not mean buy and forget. I buy and monitor the health of the company I am holding. What I meant was I dont give much regard if the stock price goes up after I sell or goes down after I buy. If I buy a good DGI company at good valuation I am not bothered if it goes down after my purchase bcoz I cannot find the bottom. Similarly when I sell I dont mind if the stock goes up after I sell bcoz I know I cannot find the absolute top.
I buy and monitor, sometimes too much by reading a lot but not because I am nervous but I have began a liking for investing.
How To Deal With Overvaluation Of A DGI Holding [View article]
RAS, i stopped putting much thought into the after buying/ selling process. Now i learnt to be happy with my buys or sells after I started DGI process. I cannot be time it right all the time but I have learnt that I don't have to. Just buy solid companies at good valuation, not necessarily at the cheapest level and have discipline to sit back and let it compound.
How To Deal With Overvaluation Of A DGI Holding [View article]
I also have same line of thoughts some times. For example, PM has raised 35% this year. Should one sell bcoz that's equivalent to 3-4 years of average market return so move to something cheaper? This is always a hard decision and this is where discipline comes to play.
Personally myself, if presented an option of 35% gain I would take it and look for other DGI candidate thats undervalued according top FAST graphs.
How To Deal With Overvaluation Of A DGI Holding [View article]
Thanks Eddie.
selling is a tricky subject. For people who had the discipline to hold on to their KO stocks from 90's its easy not to sell because they have witnessed the power of buy and hold and compounding. But an average investor does not have that patience, particularly watching CNBC. Thank god I don't have cable TV. That 50 - 100 bucks / month can buy few shares of KO.
I do not remember who said it " you make money when buying (at a good valuation) and not when selling"
While that is partly true, with options selling is the best way since a little more than 80% of options expire worthless.
How To Deal With Overvaluation Of A DGI Holding [View article]
I like the idea of trimming except I don't have very many stocks to do that. with my capital I buy max 200 shares and hence sell 2 option contracts. Trimming is good when you use covered call. Sell CC option for half the shares you have, if called away sell naked puts. If executed you end up with same shares you started with may be with a lower cost basis.
How To Deal With Overvaluation Of A DGI Holding [View article]
David, I know what you mean. I sold PM earlier this year when it crossed 82. Then watched it sail over 90. Also sold KO but luckily that money went to buy PEP which also took off. One should learn to deal with emotions like "I should have sold it when it was that high" or " oh , why did I sell it soon". Instead learn from why we did it and what changed that went against our decision. I am still figuring out the market after nearly 8 years... not actually figuring out the marker but the investors. I realized if I can understand the investors better I have a better chance of coming a ahead. Example: buying solid companies when they go on sale, like 2008, when a typical investor is selling without thinking about long term.
I did construct my own spreadsheet with hypothetical price to analysed what happens with money invested in a DGI stock when it goes up in value, goes sideways or going down, for long term. Turns out the best thing that could happen is if the stock goes down long term like the 70s. We buy more with our dividend and end up with huge income. amazing.
How To Deal With Overvaluation Of A DGI Holding [View article]
I know. The commissions kill the profits (or should I say the income). I sell covered call or naked puts on stocks that are below $40. easier to buy 100 or 200 and sell options. With stocks like MCD and PM are priced high so its tough. 100 shares in each of these would cost about 9K. But when my nest egg gets bigger I will use options on those as well. On weeks with high volatility, like with PM last week one could earn well by selling options on these.
How To Deal With Overvaluation Of A DGI Holding [View article]
my IRA is with fidelity and Vanguard. Fidelity allows naked puts as long as you have cash to cover. No margin on IRAs. Vanguard account holds securities which just get the dividends and automatically reinvest.
How To Deal With Overvaluation Of A DGI Holding [View article]
depends. I do not have that many positions since I am still young and dont have that much to invest. I have about 10 positions. Also I moved from the USA to Canada and here the option premiums aren't that juicy. But I do have MCD, WAG, PG, PEP, CAH and ADM in my IRA thats still in USA. Bcoz I do not have a lot of shares I don't use options that much since the commission is high. But I like the income and will be doing it as my nest egg gets bigger.
How To Deal With Overvaluation Of A DGI Holding [View article]
Thanks.
I don't like to sell either. I like to sit and let the compounding do its job but sometimes it is so tempting to get some income by selling covered call when I feel the stock has become over valued. My rule is, if I decide to sell a stock why not sell a slightly OTM covered call and sell it for a higher price than what Mr. Market is offering me today.
The strategy is a great one if a person is well aware of options trading. I myself utilize both naked puts and covered calls, but one needs to know their limitations regarding emotions.
I will never touch a stock like GM myself, let alone options.
I do not mind if my stock gets called away at the price I sold the CC for. But not the case for everyone. Similarly, selling NP can be dangerous. I always sell on the stock I want to own so its a great, but very underutilized, strategy.
Great article for someone who is not using options to boost returns. But do not jump right away selling options, try to do paper trade and understand the way options work. If done with discipline, options are great to boost the returns, even when one is conservative.
Bank Of Montreal: Go North Of The Border For This 5% Yielder [View article]
great stock. Also Bank of Nova Scotia (BNS) is also a great investment. BNS has a better play in latin america. With the population growth and emerging middle class, its a great play.
Being in Canada, its awesome to own div paying stocks. Super low tax rate for average Canadian income.
Both are good yield play, although BMO has better yield right now.
And the canadian banks did not cut their dividend during the crisis which is a good sign. Wish I bought them then, yield was north of 8% .
The Rational Case For Dividend Growth Investing (Part 2) [View article]
Koyunbaba, its great to see you find DGI strategy after your investments went south. Some people just give up on the market.
I remember in 2006 I was visiting my friends parents for Thanksgiving . It was actually a small town near Joplin, MO. One of my friends buddy, who works in local construction, was saying about 5k he lost in a stock he invested based on a tip from his broker. He actually put 2k more after the initial 3k when the stock went south. Had no idea what that company he invested was doing. Based on that experience he was saying how he will never go back to investing. A couple of his friends were agreeing with him. It was neither my place nor I was as savy as now to explain him about investing in DG stocks.
I see how people lose money and some never return to invest bcoz of bad experience, particularly with brokers.
How To Deal With Overvaluation Of A DGI Holding [View article]
How To Deal With Overvaluation Of A DGI Holding [View article]
i did not mean buy and forget. I buy and monitor the health of the company I am holding. What I meant was I dont give much regard if the stock price goes up after I sell or goes down after I buy. If I buy a good DGI company at good valuation I am not bothered if it goes down after my purchase bcoz I cannot find the bottom. Similarly when I sell I dont mind if the stock goes up after I sell bcoz I know I cannot find the absolute top.
I buy and monitor, sometimes too much by reading a lot but not because I am nervous but I have began a liking for investing.
How To Deal With Overvaluation Of A DGI Holding [View article]
i stopped putting much thought into the after buying/ selling process. Now i learnt to be happy with my buys or sells after I started DGI process. I cannot be time it right all the time but I have learnt that I don't have to. Just buy solid companies at good valuation, not necessarily at the cheapest level and have discipline to sit back and let it compound.
How To Deal With Overvaluation Of A DGI Holding [View article]
Personally myself, if presented an option of 35% gain I would take it and look for other DGI candidate thats undervalued according top FAST graphs.
How To Deal With Overvaluation Of A DGI Holding [View article]
selling is a tricky subject. For people who had the discipline to hold on to their KO stocks from 90's its easy not to sell because they have witnessed the power of buy and hold and compounding. But an average investor does not have that patience, particularly watching CNBC. Thank god I don't have cable TV. That 50 - 100 bucks / month can buy few shares of KO.
I do not remember who said it " you make money when buying (at a good valuation) and not when selling"
While that is partly true, with options selling is the best way since a little more than 80% of options expire worthless.
How To Deal With Overvaluation Of A DGI Holding [View article]
How To Deal With Overvaluation Of A DGI Holding [View article]
I know what you mean. I sold PM earlier this year when it crossed 82. Then watched it sail over 90. Also sold KO but luckily that money went to buy PEP which also took off. One should learn to deal with emotions like "I should have sold it when it was that high" or " oh , why did I sell it soon". Instead learn from why we did it and what changed that went against our decision. I am still figuring out the market after nearly 8 years... not actually figuring out the marker but the investors. I realized if I can understand the investors better I have a better chance of coming a ahead. Example: buying solid companies when they go on sale, like 2008, when a typical investor is selling without thinking about long term.
I did construct my own spreadsheet with hypothetical price to analysed what happens with money invested in a DGI stock when it goes up in value, goes sideways or going down, for long term. Turns out the best thing that could happen is if the stock goes down long term like the 70s. We buy more with our dividend and end up with huge income. amazing.
How To Deal With Overvaluation Of A DGI Holding [View article]
How To Deal With Overvaluation Of A DGI Holding [View article]
How To Deal With Overvaluation Of A DGI Holding [View article]
How To Deal With Overvaluation Of A DGI Holding [View article]
I don't like to sell either. I like to sit and let the compounding do its job but sometimes it is so tempting to get some income by selling covered call when I feel the stock has become over valued. My rule is, if I decide to sell a stock why not sell a slightly OTM covered call and sell it for a higher price than what Mr. Market is offering me today.
Sell In May And Do Not Go Away [View article]
I will never touch a stock like GM myself, let alone options.
I do not mind if my stock gets called away at the price I sold the CC for. But not the case for everyone. Similarly, selling NP can be dangerous. I always sell on the stock I want to own so its a great, but very underutilized, strategy.
Great article for someone who is not using options to boost returns. But do not jump right away selling options, try to do paper trade and understand the way options work. If done with discipline, options are great to boost the returns, even when one is conservative.
Warren Buffett's Fundamental Strategies For Investment Success [View article]
I know. he kept a whopping 1% of his wealth to himself and pledged only 99% of his billions of $ for charity.
why don't you donate at least 0.01% more of your wealth than he did and then talk about the oracle.
after all, you can make it up with your AAPL in future.
Bank Of Montreal: Go North Of The Border For This 5% Yielder [View article]
Being in Canada, its awesome to own div paying stocks. Super low tax rate for average Canadian income.
Both are good yield play, although BMO has better yield right now.
And the canadian banks did not cut their dividend during the crisis which is a good sign. Wish I bought them then, yield was north of 8% .
The Rational Case For Dividend Growth Investing (Part 2) [View article]
its great to see you find DGI strategy after your investments went south. Some people just give up on the market.
I remember in 2006 I was visiting my friends parents for Thanksgiving . It was actually a small town near Joplin, MO. One of my friends buddy, who works in local construction, was saying about 5k he lost in a stock he invested based on a tip from his broker. He actually put 2k more after the initial 3k when the stock went south. Had no idea what that company he invested was doing. Based on that experience he was saying how he will never go back to investing. A couple of his friends were agreeing with him. It was neither my place nor I was as savy as now to explain him about investing in DG stocks.
I see how people lose money and some never return to invest bcoz of bad experience, particularly with brokers.