Money Article Library LOGO spacer.gif - 1kb Top Commissions, Great Re-orders, Best Support & Promotions

Home | Stock Strategies

The World's Perfect Global Home-Based Business
Unbeatable 80% Re-Order Rate Makes the Perfect Home-Based Business. Top demonstratable products in 5-Mega-Profit Industries, World-Class Training, Free Website, Huge Commissions, Bonuses, Travel, Cars. Top Support Team & LEADS Program... CLICK HERE FOR FREE DETAILS!


Basic Investing for the Small (micro) Investor

By: Basic Investor

April 4, 2001 To the Kids.
Subject: Your financial future - the portfolio I’m managing for you.

This is a follow-up to my letters of a few years ago. It is to let you know that I’ve been busy with my task (given to me by your Grandfather). I’ve attempted to buy companies that fall into only a few categories.

The perennial top performers, and promising turnaround prospects. Stocks that you accumulate slowly at depressed prices now that have the prospect of turning around after several years. Stocks that generally follow some basic rules.

A major player in a basic industry with a history of success. A multi-national corporation with a low P/E ratio, usually a strong dividend record, substantial insider holdings, or simply that I like and use their products.

Remember This ! : The Big What IF??? What if there is a [BIG] correction in the market? (translation: prices are dropping- may have dropped as much as 25%, 35%, even 40%? Sir John Templeton said on Wall Street Week 1/10/97 that such could be expected, as all markets fluctuate.

In the meantime, when times are good. While you are waiting for such a drop, park spare money in a money market account or savings account at the bank.

It is only necessary to pay enough attention to the stock market to notice the big tops and the deep lows.

No one in the history of any stock market has ever been able to time the market perfectly. So don’t try. Only try to be in the bottom third of the down cycle before you take your cash out of savings and spending it to add to your stock accounts.

At some point there will be some downward days in this Bull Market. No one can predict the when, or the if, of such an event. It arrived again in Jan 2001- after 8 good economic years of Bill Clinton, together with George Bush.

The key to financial success is to buy companies carefully, selecting well established companies that are leaders in their industries (#1, #2, or #3), and that have exposure to wide markets (preferably multi-country, or worldwide markets). Buy only companies with a proven track records of profits and earnings, a low P/E ratio (16 to 24), low Beta #’s, and consider more strongly companies that have a long track record of paying increasing dividends.

Hold your stock in a DRIP, so you can eliminate most purchasing fees. To learn this stuff, check out Value Line at the Public Library (for Free). You would spend more time on choosing a new car’s color. You must be willing to spend enough time to become financially independent. Find out about DRIPs at The Moneypaper, or NAIC.

MOST OF ALL, do not panic. You are buying good companies, not the market. Experienced stock investors and those familiar with investing principles will see stock market dips as stocks on sale. These are buying opportunities at the time others see gloom and doom. Sir John Templeton: “A million dollars invested one day before the 1929 stock market crash, today would be worth $117,000,000 and with reinvestment of all dividends would be worth $250,000,000.”

Don’t forget the need to fund DRIPs. Just opening an account (with the purchase of a single share) will not advance hopes of becoming financially independent. Once the account is open, shares in that company need to be purchased on a regular basis (monthly, quarterly, semi-annually, annually). The actual date of regular purchases is NOT important.

Several studies have proven this. The important thing is: to meet investment goals and save for posterity (you) and future prosperity (yours, and “yours”), you’ve got to add money to each account from time to time. Otherwise, the cost of opening the account is wasted, as well as the cost of the share itself should have better been invested elsewhere.

My calculations show that at about ten shares in an account, the cost of opening the account for that stock, thereafter becomes negligible on a per-share basis, especially if the share has advanced in price, or if dividends have been paid a couple of times.

So, Remember, when you can, send “Old Dad” some money to add to the kitty to add to the accounts. I’ll keep records of whom sent what, when, etc, so if a time comes when withdrawals are appropriate, then it can be done on a fair basis.

PS : I think we’re near the bottom of the current low. If you want me to add $$$ for you---- now, is the time for it. It does indicate an opportunity.

Love, Dad

Article Source:

George Wallace completed an MA and taught in the public schools for 28 years. He recently published a book on religion which lashes out at nearly all of the comfortable ideas about God, the trappings of organized religion, the excessive layers of money sucking priesthood, and their departures from the fundamental ideas and messages of Religion. His pithy comments and suggestions for a return to a God-centered personal religion are sure to outrage everyone.


Please Rate this Article


Not yet Rated

Click the XML Icon Above to Receive STOCK STRATEGIES Articles Via RSS!

Related Articles:
AWeber - Email Marketing Made Easy


The World's Perfect Global Home-Based Business
Unbeatable 80% Re-Order Rate Makes the Perfect Home-Based Business. Top demonstratable products in 5-Mega-Profit Industries, World-Class Training, Free Website, Huge Commissions, Bonuses, Travel, Cars. Top Support Team & LEADS Program... CLICK HERE FOR FREE DETAILS!

The owner of this website is an affiliate/advertiser for providers of products and/or services listed on this website and may receive compensation if you purchase those products and/or services. All referrals are made in good faith for sources believed to be credible and that offer good value. In all cases the decision to purchase, or not to purchase, should be made after performing your own due-diligence on the efficacy and suitability of the product or service being offered. By clicking on product/service links on this website you agree to hold this website's owners harmless in the event the product/service is found to be unsuitable for any reason. All claims for refunds must be made to the supplier/vendor of any product/service you purchase from any link on this site..

Public Disclaimer For All Users :

All articles in this directory are the sole property and opinion of the author. Author's assume all responsibility for any claims, or opinions, voiced in their articles. No article in this directory is intended to provide any legal or professional investment advise. Articles are written for entertainment and educational purposes only. Readers should, in all cases, consult a licensed professional before taking any actions with regard to money management, investments, business opportunities, etc.

This directory, it's web site developers, internet providers, web hosts, and designers accept no responsibility for any information in this directory. By submitting to this article directory, all author's agree to "defend and hold harmless" all individuals and companies associated with this director, in any claim or cause-of-action brought to any court of any jurisdiction, against them as a result of publishing and archiving the author's articles and information.

Powered by Article Dashboard