December 11, 2013
PiC was relatively unimpressed when I announced that our Christmas presents this year were going to be Costco stock.
“… I like Costco….”
Yup. So do most people I know. Fun fact: Costco apparently ed to keep offering mainland prices when they opened up their Hawaii stores. This was from a Hawaii-based friend. We’ve shopped there and while I won’t say all the prices are still on par with mainland prices, they’re pretty close. For a place that easily charges 3-5x more for basics than the mainland, that’s not bad.
I’ve been on the hunt for an addition to my tiny portfolio, so I started thinking over the businesses that I’ve tracked over the years, as well as the businesses we frequent. If we’re consistently willing to spend money at a business that has a strong foundation and cash flow, it makes sense to consider them as a stock holding after some research.
I’m looking for stocks with dividends this round and Costco (COST) fits that bill. Their fundamentals looked tolerably good, though the ratios are on the lower side compared to some other stocks that are flying high. I will admit that my working knowledge of the market is pretty rusty after spending enough years sitting on stocks and not doing a lot of research. It makes Evan’s Investment Club an attractive idea; you’d think this was like riding a bike but apparently I was never that good at riding bikes/stock picking!
I decided the number of stocks I wanted (based on how much cash I had on hand, honestly), the price I’d be willing to pay and set a GTC (good til canceled) stop order at that price.
My portfolio is currently at TradeKing (referral link gets you and me $50) which has been great for my style: simple, low-cost at $4.95 per trade, easy to navigate and good information resources. I buy and hold, reinvest dividends, and balance growth and income stocks.
::Update: I’m now the proud owner of COST. PiC remains slightly indifferent. 🙂
January 6, 2011
We rang in the new year driving down the highway counting down about ten seconds off the real time. But never mind that, onward!
Savings
I’m looking at three specific areas to save money in January:
1. Cell phones – consolidating my parents and PiC and myself onto one family plan
2. Cable/internet/landline – PiC’s promotional rate for all three services has expired and he’s now happy to let me reduce to the most basic or do without some services. I’m considering the options, though my heart is sad to consider options that don’t include BBC. Alas.
3. Insurance – I’ve been carrying a variety of insurance policies and he and I need to take a closer look at whether we’re overlapping or if we can consolidate for better rates at some point. This is mostly planning, I’m in favor of getting an umbrella policy if we end up combining finances and y’know, marrying it up this year.
Income
1. There’s bonus talk in the air this year, based on last year’s performance, and I had intended to put it toward a big fat trip this spring but as it turns out, that might not really take the form we once imagined. (That bit goes under spending, doesn’t it?)
2. My first year comes to an end this spring and I’ll be up for a review. I fully expect to make a strong case for a raise since my six month review was entirely positive but I’m not sure that the organization tends to be generous on either front (raise or bonus) in comparison to previous years and employers.
Investing
1. PiC and I will be sitting down to evaluate his investment strategies for age and goal appropriateness.
2. My trading account has been dormant, accumulating bits of dividends, and it’d be nice to have a few more income-earning stocks. Time for more research!
Spending
1. Travel will take a chunk of money, depending where we go, and if we count honeymooning in there, that’s another chunk. Then again, honeymooning might happen next year.
2. There’s the small matter of a wedding. I’ve got no plans other than to keep it as simple as possible.
What are your plans this year?
October 27, 2010
You might have already heard about this from the granddaddy of all PF blogs, My Money Blog.
If not, those of you who invest with Vanguard index funds and hold more than $10,000 in those funds, you ay qualify to convert those funds to Admiral Shares.
A quick synopsis on Admiral Shares from their site:
Admiral Shares are a separate share class of more than 50 Vanguard funds that follow the same investment strategy as traditional shares, but with significantly lower expense ratios. They were created to recognize and encourage the cost savings that Vanguard derives from large accounts, and to pass those savings on to investors.
Thanks to their low costs, Admiral Shares can reduce your expenses 18%–50% below the already low expense ratios of our standard Investor Shares. (Find out why investment costs matter.)
For example, if you invest $50,000 in a fund’s Admiral Shares with a 0.07% expense ratio instead of its Investor Shares with a 0.18% expense ratio, you could keep approximately $1,200 more in net returns for your account over a 10-year period, assuming an average annual return of 8%. (This is a hypothetical illustration and does not represent any particular investment. Actual savings for your specific funds may be higher or lower.)
Only one of my funds qualified for conversion so I swapped that right over. I’m no longer actively contributing to my Vanguard funds at the moment but the Roth IRA could use a fresh infusion of funds when I’m ready to let go of some cash. My current accounts stand at $42,768.87 and I’d like to break $50,000 by this time next year [for the record: October 26th, 2011] so I need all the help I can get.
Be sure to take advantage of the lower expense ratios in the Admiral Shares if you can!
August 9, 2010
My high school service award was a $500 savings bond for college.
Our lovely Kiwanians, however, hadn’t really looked carefully at the terms of the bond, or the kind of bond they were buying, and 10 years later, the Series EE bond has only appreciated to a grand total of $374. It’s the sort of bond that takes thirty years to accrue to full value, you see, and so was probably the worst choice for a college fund.
I can’t really decide if it’s worth waiting another 20 years for that bond to mature. Why not cash it out at $374 now and invest it or just put it toward one of my mid-term savings goals?
June 4, 2010
Will the cornerstone of Future Me’s Castle crumble to bits?
As excited as I was to start contributions to my new 401(k) as soon as I was eligible, the sad truth is that the plan carried by my company is less than ideal. By that I mean, the expense ratios start at .65% and go up, way up, from there. For any asset allocation, an investor would have to accept a hit of 10-20% of contributions along with the usual investing risks.
I’m a Vanguarder: no fees and low fees are my mantra! While we have an up-to-4% match with a 6% contribution, mediocre funds, outrageous fees and other additional fees I’ve not yet ferreted out are already eating up any possible gains. Is that now 2% or less worth it?
Certainly it’s 2% that I didn’t have to contribute but consider that my money won’t have the opportunity to perform in a stable fund like the ones I can find with Vanguard. There are 5 index funds and their online access is limited – witness the fine print disclaimer that access may be restricted and will be limited during peak times.
I’m not sure the pros [the match and the tax benefits] outweigh the cons [poor funds, many fees].
Alternatively, I could always take cash and dump it into a ROTH, which doesn’t actually give me any tax benefits right now, and also open up either a SIMPLE IRA or a SEP-IRA for the freelance income. It’s giving up the 4% match, but I can stick with Vanguard and not give up any of that match sacrificed to high fees.
It’s hard for me to say: I won’t invest in the 401(k) and will give up free money. But it’s harder to say I’m going to blindly follow conventional wisdom when I know it’s not the usual free money is great scheme.
February 3, 2010
Today we have a guest post from Silicon Valley Blogger (SVB) of The Digerati Life, my Northward neighbor and savvy investing problogger. Please make her welcome!
The Digerati Life is a site that covers financial topics, from investing and budgeting to debt management. Check the site for online stock trading promotions, including this OptionsHouse promotion code page for cheap brokerage commission rates.
When a stock broker mentions growth investing, they are referring to companies that show a lot of future potential. To understand growth investing versus any other type of investing, it will also be helpful to understand market capitalization. The market capitalization figure will tell you the size of a company. I look at growth investing a little differently than what you’ll find from online definitions of the term. To me, you must figure the company’s market capitalization in order to know its place in its industry.
Many investors probably don’t pay much attention to market capitalization, but they all should. The market capitalization figure should be one of the first numbers you look at when analyzing a company. Companies can be divided into groupings by their market capitalization. A large cap company is greater than $10 billion, mid cap is $2 to $10 billion, small cap is $300 million to $2 billion, and there are smaller companies less than $300 million. This figure is the result of multiplying the price of a single share of stock by the shares which the company has issued outstanding. That is the equation to determine market capitalization if you don’t have a listing for it already on your information source. You should do the calculation anyway, because then you’ll know your stocks’ value, for sure.
Market Capitalization = Price of Single Share of Stock x Shares Outstanding
Now stocks can also be categorized as either growth or value stocks. A high growth company can have any kind of capitalization, whether it be micro cap, small cap, mid cap, or large cap. The growth part of the analysis has to do with potential. How much market share does the company hold in its industry? To figure market share of an industry, you’ll have to get the total market capitalization of the companies in the industry you are analyzing. Then divide each one into a hundred to figure its percentage share of the market. This figure will also give you a chance to see potential growth for your company. A company often grows by taking market share away from other companies.
Total Industry Market = Market Cap A + Market Cap B + Market Cap C
Market Share in % = Market Cap (A, B, or C) /Total Industry Market
All the calculations and rules of thumb in the world won’t help you identify a growth stock if you pick the wrong industry. You have to ask yourself, what kind of money is this company making right now, what could it be making ten years from now, and then look at the industry your company pick is in… is that industry in decline or not? In general value investors look for companies in established industries with an undervalued stock price. Growth investors look into emerging and presently hot industries for a company that is about to take off or has the potential for high growth in the future. In value investing, your gains are from buying cheap and selling at reasonable prices. In growth investing, your gains are made by buying at a reasonable prices and then selling at even higher prices. Pay attention to market capitalization figures, and the position of the industry your company is in, and that will make you a better investor.
January 26, 2010
I’m blushing right now. I’ve talked about dipping my toe into building a modest portfolio before. Bought my first set of shares, decided on a Watch List of about ten stocks with decent dividends and sat back to wait. I was waiting for: more money to spend, and lower prices all around. After all, I’d learned from my 10 share experience, right?
Nope.
I knew that Berkshire Hathaway was going to split the B-shares 50-1 on Thursday and that put individual shares within reach starting in the $60s per share. A little knowledge, my friends, is indeed a dangerous thing.
Kinda like Mapgirl, except I had the warning in her comment specifically about BRKB: I jumped too soon.
With just over $500 sitting in the account, it’s not like I was flush with cash but … *ducking head* I was bedazzled by the brand name of BRK.B and bought 7 shares. I know! I know! Of all the things to impulse buy! I’ve been seduced by a name and a deal. And 7?? What is that number about?
Feels like this is the beginning of a slippery slope, innit? The buying strategy for this investment account was to buy more than 10 shares at a time of a good company at a low price that paid decent dividends. Watch List, remember?
Ah well, not really. There’s a simple solution to that mistake. I have no more ready money.
Thus ends my foray into investing through the Trade King account until I scare up an income and have the cash flow to divert.
Ed Note: Yes, BRK.B is under $70 and has been since I bought the stock. Le sigh. I have no one but myself to blame. Myself and this horrendous cold that won’t go away.
By request:
