"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote
- quote -

I think they do, but sparseness is encouraged here, and I think generally
it's to the advantage of the dialogue.

Don't take offense. Just keep reading and responding to what interests you.

- quote -

GMTA? I bought some of it recently, too, and yes, its global presence was no
small factor in my decision.

- quote -

Likewise. For my individual stock picks, I feel more comfortable at the
moment investing strictly in U.S. stocks. The accounting laws are reasonably
transparent. I trust the U.S. legal system to root out serious violations
that affect the free markets.

- quote -

Big time, yes. I am about at the point where I won't buy the stock of any
U.S. company lacking a significant overseas presence.

- quote -

Ah, never kick yourself. That's a gamblers' game. I say: Stick with the
science of economics: Slow and steady has the better odds of winning the
race.

IMHO, there are enough resources
- quote -

I trust you noticed that at betterinvesting.com (web site of the national
investing club blah blah blah), they push an examination of management. My
favorite eccentric Millionaire-Next-Door relative has been saying the same,
as did his own father.

- quote -

Darn right. I am using the DIYers' "Rule of 72" a lot these days, to impress
upon myself the importance of going with a lot of strong-dividend-growth
companies. E.g. GE increases its dividend around 11% a year, on average, for
the last decade. The yield on an investment today will double in about 72/11
= around 6.5 years. Plus there's a decent chance the principal will grow,
too.

- quote -

Yes, as some "acquaintances" at misc.invest.mutual-funds like to pound the
buy-and-holders with: these seemingly flat markets are a boon to catching
bad hair days.

Still, I am not exactly tempted to effectively day-trade, for other reasons.

snip but comments noted
- quote -

Yes, I have been watching this thread. It's a bit "not applicable" to me,
though. I am not investing for retirement years down the road but for income
and growth now (knock on wood). The point about how dividends/cap gains of
mutual funds work is something I have to factor in a lot, though.

- quote -

I am not impressed with what my searches have turned up.

ETFs seem to show some promise, if one is comfortable with them.

- quote -

I don't know if it's most. I know the average is about 1.5%. Anyone having
the median value, please post it.

But my criterion for mutual fund fees went below 1% long ago. :-) (We won't
talk about paying a front load for a Fidelity Magellan position almost 20
years ago... <grin?> )

- quote -

Likewise.

Elle -

Thanks for your reply (I'm a little surprised that so many of the
people who start a new topic just disappear - makes one wonder if they
have even read the replies). Nice to know you have some first-hand
knowledge of the early 80's, and have paid attention to the 70's
-interesting points in time, when trying to make sound sense of the
markets and come up with a workable "best of middle of the road"
strategy (I'm not as young today as I was then, either).

For global diversification, I elected to go with KMB (Kimberly Clark),
a domestic company that has substantial operations overseas. Trying to
sort out the accounting standards and financial reporting of foreign
based companies is something I just haven't looked at. BP (British
Petroleum) is about as far away as I want to get, and even there, you
almost have to guess what their dividend will be. I think the major
exporter to the US from Japan is still IBM. A lot of growth does seem
to be occurring overseas; I've looked at Switzerland as a possible
model for what may happen in the US; for all the faults and mysteries
of the US, one thing we know how to do is produce, which includes
running a business. Hopefully you won't be disappointed with your
allocation choices 20 years from now, and I wonder if you have
considered diversifying your overseas investments with US companies
doing business overseas?

I also have not looked for funds - I'm sure there are some out there.
(I'm still kicking myself for having missed Dominion resources (D) at
$35 bucks a share, with a huge yield.) IMHO, there are enough resources
out there, to look for and find, a handful of solid companies. Under
another topic in this same forum, a David Efflandt mentioned his
purchase of a local bank or S&L based on his first-hand experience with
them. This was very similar to what you mentioned about Wells Fargo.
What I really like about companies that regularly increase their
dividends is the effective yield, ten years down the road, of the
original investment. But, the earnings must increase to support the
higher dividend and maintain the same dividend payout ratio. The price
of the stock should then follow the earnings upwards, on average, and
the yield provides a bit more stability. And, if you can catch Mr.
Market on one of his bad hair days, you can get a really good price -
Peter Lynch calls them "Fire Sales on Wall Street", as I recall.

Which brings me to the other point you touched on - the level of the
market, and the 70's. "The Motley Fool" did a recent piece on IR
(Ingersoll Rand) that was very interesting, and may or may not shed
some light on the current markets. I like Elliott Wave Theory for
charting, and IR looks a little high, right now, but the PE is not too
high, unless you compare to the 70's. I don't want to get too personal,
but one of the reasons I'm posting is "due to the regrettable loss of a
close personal relationship", otherwise known as, "getting over her".
So my perspective is perhaps somewhat saddened. The more years that
roll by, the closer the proverbial retirement comes, and I am moving
more to the conservative side of the spectrum. It's easier to get over
a financial loss than a personal loss, but with interest rates where
they are, and the market where it is, people nearing retirement have a
quandary to resolve. Now there is also the "unfunded pension liability"
to look for in the 10K's, besides the lawsuit silliness.

My solution is pretty much what I suggested for Cindy, with the
difference that I am looking for individual stocks, principally. I am
open to funds, and under the topic "Mutual Funds v. Stocks" in this
forum, there are what may be some worthwhile suggestions. I'm sure
there are funds that focus on large-cap-value-dividend-increasing
companies, but for now, I still favor stocks. Eventually, I'll get
around to looking in Morningstar. Most funds take better than 1% in
fees each year, and in my prior experience, as you mentioned elsewhere,
pick up some junk.

Again, thanks for your reply. It's nice sharing ideas and perspectives
with you.

--
Dapperdobbs

"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote
- quote -

You bet I remember those days. I was still young, but I had cash coming in
and didn't know where to put it until I figured out a long-term plan.
Short-term CDs were paying around 10% in the late 1980s, IIRC. So I was
buying these for a couple of years.

Sure would be nice to have some of those in my current bond/CD ladder! Bond
and CDs yields are so low that I am fairly easily wooed away to a fair
amount of stocks with nice dividend yields and a good record of dividend
(and price) growth, along the lines of what you suggest at the end.

- quote -

Yeabut as you know, no one can forecast the future. Throw in that current
interest rates are pretty anomalous, as is the economy, and I'd be skeptical
of anyone who said they weren't puzzled as to what the future promises with
interest rates.

I think they may very well stay flat or at best creep up at an astonishingly
slow rate upwards. But I would bet no money on this!

snip but I like the suggestions made. A little aside on Wells Fargo: I have
no account with Wells Fargo, but I have shown up at my local Wells Fargo
branch a few times in the last year for minor business that only a bank like
it could offer. Their employees are professional, courteous and totally
non-pushy. (Can't say this about other banks in my area.) Someone posted at
misc.invest.mutual-funds that WF's brokerage side stock commission rates
have plummeted. I'd sure consider doing more business with WF.

- quote -

Being in this for the long-term (which AFAIC is what every stock investor
should assume), and having looked at the 1970s, for one, I just can't see
justification for tarrying much over current levels.

I do try to diversify towards more globally oriented stock, though, out of a
fear that U.S. demand is saturated, or simply that there is much more room
for growth internationally. But I don't know; maybe I'll eat my words on
this come 20 years.

- quote -

Any funds in particular you like for this?

Elle -

Very nice piece.

I'm principally in stocks, but also have some familiarity with bonds.
I've been looking at some of the same stuff you've mentioned - recent
historically low yields back to the 1940's, and the prospects of
declining bond prices. Don't know how long you've been around, but back
in the early 1980's the interest rate environment was as close to the
opposite to today as you can get, I suppose. (E.g. Care for a Duke
Power muni trading at 94, yielding 13.5%, callable at 135?) I know a
lot of people a lot smarter than me are puzzled by today's interest
rate picture.

I hope this may add something to what you've said, even if it's simply
a viewpoint: if Cindy could "hijack" someone in Wells' bond department,
they might be willing to either refer them to some text-book reading on
how to ladder a bond portfolio, or even give them a first-hand
explanation. Certainly Wells has an interest in their employees'
retirement. Make sure the bond-expert doesn't just "sell you" on what
he happens to have in inventory, and make sure he gives you a review
and opinion on the course of interest rates for several years out!
Never take investment advice without sleeping on it for a week.

There are also Ginnie Maes, Fannie Maes, and Freddie Macs - I bought
some, but I just melted down trying to really understand ... some of
the math is enough to float the Queen Mary. Those yields are somewhat
better, but there is the influence from the housing market on repayment
of principal v. interest.

It sounds like Cindy had funds that got hit by the 2000 crash in the
"hiccup-tech" and telecom sectors - which are stock funds, not bond
funds, and - just my extrapolation - that Cindy & Co., are focused on
their jobs, and are not investment pro's. One thing I have done is look
carefully at companies who regularly increase their already substantial
dividends - but you then have the question about the level of the stock
market, exactly what Cindy appears most concerned about.

The US Treasury offers virtually free accounts linked to checking (a
piece of cake for Cindy), T-Bill yields are safe and better than
money-market, and she could park there, as rates rise. If her fears
about the market turn out to be true, she could then begin to invest
into a large-cap-value-dividend-increasing fund, and probably make out
like a bandit.

Cindy Liu <ciliu321[at]aol.com> wrote
snip
- quote -

Have you considered a bond ladder instead of an investment grade (IG) bond
mutual fund?

By some measures the ladder is a safer investment than the fund. Many feel
we are in a rising interest rate environment right now. As interest rates
rise, the principal of your IG bond fund investment will decline. For
example, DODIX is a mostly IG bond fund (with a bit of junk thrown in, which
helps the yield), of intermediate duration. Its NAV will decline as interest
rates rise, meaning that the principal you invest right now will decline. By
buying into an intermediate term IG bond fund now, you lock in a certain
absolute dollar yield. With a bond ladder, you lose no principal, and the
yield rises as interest rates rise. You do have to have a little discipline
insofar as cashing in parts of the bond ladder. I would think that would not
be a problem at your age.

FOHFX behaves similarly.

If you keep funds like DODIX and FOHFX a very long time, then the advantage
of enormous diversity that they offer may easily outweigh your losing some
principal.

I estimate you could lose around 10% of principal with these funds, based on
their historical charts.

- quote -

Is this a typ-o? Do you mean FOHFX?

- quote -

I can't find any fund that uses the symbol "hadbx."

Try getting some experience with mutual fund screeners like those at
finance.yahoo.com and www.morningstar.com

- quote -

Investment grade bonds are considered the ideal diversification tool for a
portfolio otherwise consisting of stocks. Very generally speaking, when
stock returns are poor, bond returns are good, with the only caveat being
when bond funds are purchased when interest rates are near record lows, as
they are now.

The following was returned to the poster because it was cross-posted.
Since it was on-topic for this newsgroup and the moderators had time,
herewith is the post with corrected headers.

--------------------------Begin copy

Subject: Rate My Fund Picks Please
From: Cindy Liu <ciliu321[at]aol.com

Hello All,

My husband & I are just 8yrs away from retirement. We've managed
to save 220K that we've kept in some different mutual funds.

I work as a secretary at Wells Fargo. I talk to a lot of people
there and they all seem to think we are headed for another
recession soon or that the next few years will be "choppy"
and "unpredictable" or "sluggish".

I don't want to risk our retirement on another market crash.
Honestly, we are just barely recovering from the last one. It scares
us to think that in a few years we have another crash and we end up
with less for our retirement.

We have been looking at the safest possible investments in the bond
area. Here is what we have come up with, please share with me what
you think:

fohx - ohio, municipal bonds around since 1990, usually
average 6-8% a year (we live in Ohio). 5 star rating from
Morningstar

dodix - dodge and cox bond fund
hadbx - managed by bill gross

I pulled the last two off of someone else's postings on this
newsgroup!

Do these seem like investments that would be safe for the coming years
if we hit hard times yet again?

_Cindy


-----------------------------End copy





-HW "Skip" Weldon
Columbia, SC