The Long Term Investor

Thank you ZUKODANY.....for the reinstatement of the posting privileges.....even if only through November. I OBVIOUSLY agree with your post above........but to keep things investment related.......it is going to be a very long holiday season this year with election turmoil and potential for stock market turmoil.

I hope you are right, TomB16. At least the NVDA is starting out on the right foot being UP for my by 3.73% today.

Other holdings that had a very nice day were......TSLA up by 2.41% and AAPL up by a whooping 5.15%. Obviously all my accounts were GREEN today and a really big beat of the SP500 today by 1.49%. I am totally kicking ass on the SP500 lately. If the market rotates to different sectors or back to value.......I will pay the price.

NICE to see that I am NOT the only one that is making some buys recently. Zukodany (in NVDA) and Trahn (in TSLA) joining me along with Roadtonowhere08 in Apple. Nice to have some company. You guys DO REALIZE that those buys are probably putting your posting privileges at risk.........right?

 

AND.......I am so glad that TomB16 is on this board. I have learned a lot from his posts and his investing thread. He opened my eyes to TESLA and is a good supportive, Stocckaholics friend. He has some very sharp analytical skills. Thanks Tom.

In fact I am very glad that ALL the regular and not so regular people post on here. I learn something every day. I strongly encourage ANYONE that is any style of investor or simply likes to talk money or investing to........feel free to post.

 

The little article below........EVERYONE already knows this.....right? Well......when you look at investing statistics......it does not seem like it. So simple, yet so difficult.

Why Owning Stocks Is the Single Best Way to Get Rich

https://www.riskhedge.com/outplacement/why-owning-stocks-is-the-single-best-way-to-get-rich/RCM

(BOLD is my opinion OR what I consider important content)

"The world’s richest man just made history. Amazon (AMZN) founder Jeff Bezos set a new record when his net worth jumped by $13 billion in one day.

Bloomberg now estimates Bezos is worth $185 billion. And get this: he’s now personally worth more than oil giant Exxon Mobil or Nike!

The secret behind Bezos’ financial triumph is simple. The billionaire CEO has made the same $81,840 salary for two decades. But the bulk of his vast fortune is tied to the 57 million shares of Amazon stock he owns—worth $180 billion.

So when Amazon’s stock jumped 10% on July 23, Bezos’ net worth spiked $13 billion in just a few hours. In fact, controlling vast sums of stock market wealth is a common thread among the world’s rich. Scroll through Bloomberg’s Billionaire Index and you’ll see they all vaulted to the top by owning their share of a successful business.

For example, look at the Waltons, heirs to the Walmart (WMT) throne. Bloomberg estimates they’re the richest family in the world, with a $200 billion treasure trove. And almost all of their vast fortune is tied to their 50% ownership stake in Walmart. And this isn’t just a case of super-rich guys getting even richer.

Every day, tens of thousands of regular Americans are reaching an entirely new level of wealth. According to Credit Suisse, one in every 17 Americans is now a millionaire! So, what’s going on here? As I’ll show you today, it comes down to what I believe is the single greatest wealth-building secret on the planet.

Owning a Successful Business Is the Single Best Way to Get Rich
These folks didn’t get rich solely by grinding their way through a 9 to 5 job. Even high earners like doctors and lawyers don’t typically earn millions of dollars a year. Instead, the path to amassing vast fortunes is paved by owning a successful business.

That doesn’t mean you have to build the next Amazon or Walmart. You can “piggyback” on billionaire CEOs like Bezos by buying shares of their companies on the stock market.

This is the playbook many wealthy folks follow. Recent data from investment bank Goldman Sachs shows the richest 1% of US households now own more than half the stocks in America! At the end of 2019, they controlled $21 trillion in stock market wealth.

Longtime RiskHedge readers know stocks have been on a tear over the past decade. The “tech heavy” Nasdaq has shot up 750% since 2009. And it just hit another all-time high:



Roughly nine out of 10 US households that earn over $100,000 own stocks. So it’s no wonder this decade-long stock market boom has minted a whole new class of millionaires.

These folks avoid the #1 pitfall to achieving financial freedom. As I said, even well-paid folks like doctors and lawyers rarely get rich through work alone. Instead, they save a big part of their paychecks and invest it in businesses.

In other words, it’s very hard to get truly wealthy by renting out your time. Think about it: you can only work so many hours. So even if you’re earning thousands of dollars a day, your “upside” is capped. It also means you’re not earning money when you’re sleeping… when you’re on vacation, or when you’re retired.

But when you save and invest your savings in a successful business, you accumulate assets that earn money while you sleep. For example, think about buying Amazon shares. Every time the disruptor bulldozes through another industry and its stock soars, you get a slice of the profits.

When it crushes earnings and Jeff Bezos’ net worth surges, it means you win, too. Think of it as a second income that often brings in more than your main job.

Stock Market Wealth Is One of the Biggest Separators Today
You hear a lot about the “top 1%” versus the have-nots in America these days. The gap between the rich and the poor has always existed. But never, ever on this level. And in many cases, the stock market has been the great separator.

Remember, nine out of every 10 households with incomes over $100,000 own stocks. I personally know many folks who’ve become millionaires on the back on the stock market’s surge over the past decade.

But the sad reality is most American’s don’t have a cent invested in stocks. Only 20% of households earning less than $40,000 own stocks. And research from the National Bureau of Economic Research shows almost two-thirds of investors have less than $10,000 in the stock market.

In other words, the stock market’s meteoric rise over the past decade has barely helped most families. In fact, a recent survey by robo-advisor Betterment highlights this great misfortune.

When asked how the stock market performed over the past decade, roughly half of folks said the market had gone nowhere. Worse yet, a further 20% said they thought it fell!

The number of Americans who own stocks has plunged since 2000. But after a relentless 20-year decline, this trend is reversing. Thanks to commission-free trading, all the major brokerages have seen millions of new investors flood into the market in 2020.

Charles Schwab said it opened more accounts last quarter than during any three-month period in the firm’s history. TD Ameritrade added 661,000 new accounts, with assets of $78 billion in the first half of 2020. And get this: the top 15 trading volume days in the firm’s history all happened in the past three months. New accounts opened on E*Trade in the first half of this year were more than double that of any prior full-year period.

In short, millions of new investors are getting into stocks for the first time. And it’s a wonderful thing.

Remember, You’ll Probably Never Get Rich “Renting Out Your Time”
Working hard and saving money is necessary. But it’s often not sufficient. Owning a piece of a successful business—aka owning stocks—is the main path to wealth that’s open to anybody.

From chatting with RiskHedge readers, I know many of you are walking this path. But if you’re unsure about investing in the stock market, now is the time to get off the sidelines.

It’s okay if you only have a little money to get started. These days it’s totally free to buy stocks through most big brokerages. And you can usually open an account with as little as $100.

The important thing is to break the inertia and start investing. No excuses. Do you own stocks? What percentage of your money is in stocks? If you don’t own any stocks—why not?

If you’re just getting started investing, first look to buy an index fund that owns a lot of stocks. That way you’ll own tiny fraction of hundreds of businesses.

MY COMMENT

WISE WORDS.....for all of us. NOT much I can add or say in reply to such sage advice.

 

Oh yeah....nearly forgot.........YES.......... the SP500 closed out yet another POSITIVE week. The Index was UP .72% for the week.

We are in the middle of a historic.......stealth......summer rally. I would bet that the average person has NO CLUE.

SP500 year to date +5.15%

DOW year to date (-2.13%)

 

HERE.......is my PORTFOLIO MODEL as it stands........right now........with the addition of Nvidia.

"HERE is a repeat of the portfolio model.......as usual:

I am once again posting my PORTFOLIO MODEL. My initial criteria to start the process to consider a business are.......BIG CAP, AMERICAN, DIVIDEND PAYING, GREAT MANAGEMENT, ICONIC PRODUCT, WORLD WIDE LEADER IN THEIR FIELD, LONG TERM HORIZON, etc, etc, etc.

PORTFOLIO MODEL

"Here is my "PORTFOLIO MODEL" for all accounts managed which is the basis for MUCH of my discussion in this thread. I am re-posting this since I often talk in this thread about my portfolio model. My custom in the past on this sort of thread was to re-post my portfolio model every once in a while since I will tend to talk about it once in a while. I "manage" six portfolios for various family including a trust. ALL are set up in this fashion. If I was starting this portfolio today, lets say with $200,000. I would put half the money into the stock side of the portfolio, with an equal amount going into each stock. The other half of the money would go into the fund side of the portfolio, with an equal amount going into each fund. As is my long time custom, I would than let the portfolio run as it wished with NO re-balancing, in other words, I would let the winners run. Over the LONG TERM of investing in this style (at least in my actual portfolios), the stock side seems to reach and settle in at about 55% of the total portfolio and the fund side at about 45% of the total portfolio over time. That is a GOOD THING since it tells me that my stock picks are generally beating the funds over the longer term. AND....since the funds in the account generally meet or beat the SP500, that is a VERY good thing.

As mentioned in a post in this thread, I include the funds in the portfolio as a counter-balance to my investing BIAS and stock picking BIAS and to add a top active management fund that often beats the SP500 (Fidelity Contra Fund) and a SP500 Index Fund to get broad exposure to the best 500 companies in AMERICAN business and economy. The funds also give me broad diversification as a counter-balance to my very concentrated 10 stock portfolio. At the same time the funds double and triple up on my individual stock holdings............that I consider the BEST individual businesses in the WORLD.

STOCKS:

Alphabet Inc
Amazon
Apple
Costco
Home Depot
Honeywell
Johnson & Johnson
Nike
Microsoft
Proctor & Gamble
Tesla
Nvidia

MUTUAL FUNDS:

SP500 Index Fund
Fidelity Contra Fund

CAUTION: This is a moderate aggressive to aggressive portfolio on the stock side with the small concentration of stocks and the mix of stocks that I hold and with the concentration of big name tech stocks. Especially for my age group. (70). So for anyone considering this sort of portfolio, be careful and consider your risk tolerance and where you are in your life and financial needs. I am able to do this sort of portfolio since my stock market account is NOT needed for my retirement income AND I have a fairly HIGH RISK TOLERANCE. In addition I am a fully invested, all the time, LONG TERM investor. (LONG TERM meaning many years, 5, 10, 20, years or more)"

MY COMMENT

This portfolio is HIGHLY CONCENTRATED on the big cap side of things. OBVIOUSLY between the funds and my twelve stock holdings there is MUCH doubling and tripling up on the stocks. THAT is INTENTIONAL. I strongly subscribe to the view of Buffett and some others that TOO MUCH diversification kills returns. I do NOT believe in the current diversification FAD that most people seem to now follow.......or think they are following. I DO NOT do bonds and think the current level of bonds held by younger investors.....those under age 50.....is extremely foolish.I DO NOT do market timing or Technical Analysis."

 

Your fractional share should get the same split.........it will increase by 4. So for example......if you have 1/2 of a share........after the split you will have 2 shares. If your 1/2 share is worth $200.....after the split your 2 will be worth $100 each.........$200.