Monday, December 31, 2012

End of 2012

So the end of 2012 is upon us. Things are not really much different in these last few hours of trading than they have been in the last few months.

The Wall Street indices look to be ending the year up overall. That is good news and hopefully some of you are on the receiving end of those profits. I personally count this year as a very good year, with the market up about 12%, I managed a 7% rise in my accounts, ok I wasn't in the really hot stocks I plodded down the middle of the road but I didn't lose out and any year that you can say that is a good year.

Next year I predict a series of stumble.s.

Congress is not doing much over the budget and fiscal cliff and that will add more volatility to the markets, It may also act as a brake on the economy in general so I will be looking for  a bumpy ride in the first half. Early 2013 will possibly look very much like the last few trading weeks of 2012. 

All in all though I am looking at transport stocks still, I still hold and acquire utilities and the top retailers and entertainment stocks look good too.

Bear in mind I am just an average investor, no items in this post or blog should be taken as financial advice, it is my opinion alone and predictions are not supportable as fact.

I wish you all very well for the New Year.

Back to quarter 1 again. Yippppeeeee!

Tuesday, December 11, 2012

Plan Now For Next Year

This is a good time to check over your investment strategy from this year and plan any changes for next year.

What about the fiscal cliff?

Well one cannot ignore the fiscal cliff, but one should still plan to go on investing in the new financial year, so have cash ready to pay into your IRA and ROTH IRA as soon as the ball falls on Times Square. Well maybe not at that very moment but at least begin investing in the earliest days of the New Year in order to get as much money working for you as you can.

You can look at all kinds of strategies for the new year too. A common favorite is the "Dogs of the DOW", a strategy whereby investors look to the worst performers of last year (2012) and invest a few bucks in those hoping for a bounce in those stocks.

I already think I have a dog in my pocket (it's not in the Dow, but is in the S&P 500 and NASDAQ) Yes Apple Inc. (AAPL) since September it has fallen almost $200 from highs of just over $700. I sold off some of my stock back then giving me an average price after costs of $326 per share. So I have some way to go to lose money but I'd rather be further away from that losing position than I am. I'll hold AAPL though till the summer of 2013 before I re-examine my ownership, unless of course it makes a dive toward the $400 level.

As things stand today, I have made a decent 7% return on my account for the year. That has been funded mostly by the jump of AAPL from $550 to $700 when I sold off some of my holding and a nice little dividend stock ING Prime Rate Trust (PPTR) that stock was under $4.90 when I bought it a couple of years ago. It pays a monthly dividend and has an annualised rate of around 6%. This little stock has motored its way in the last few months through the $6 level and stands now just above that.  I have on a couple of occassions trimmed my holding in PPR to reduce the downside risk, but I still hold some for the future mainly because of the great and regular dividend payment.

One area I am looking at expanding my holdings is in Transportation. I have held CSX Corp (CSX) for a couple of years, they are a pretty steady stock in the $18-22 range mostly, paying a reasonable dividend and profitable. Another Stock I am watching to buy is Union Pacific (UNP). a little higher in cost at around $120 per share UNP has a large portion of the Western United States within its coverage.

I am bullish on the economy begining to grow in the next couple of years and CSX and UNP offer a good chance to cash in as goods move to and from ports across the North American continent.

Saturday, December 8, 2012

Fiscal Cliff

Ok so we can't avoid talking about it even here.

The six hundred pound gorilla in the room is the fiscal cliff.

Well in reality its probably not much of a cliff for most of us. Not even a six hundred pound anything.

It has been talked up and up by the media into a frenzy of turbulent maelstroms converging upon us poor investors. Sorry us incredibly rich 1%ers.. But really if you had been really careful you will have invested as much in tax efficient products anyway. Your IRA or ROTH IRA for starters.

Then most of us will not pay so large an amount of tax for this year. Next year we may take a hit but so far we are ok.

Next politicians love to create a crisis. This crisis could be settled quickly, but as in the old time Westerns the cavalry must wait until at least the most popular old settler in the wagon train has been wounded before charging over the hill to chase off the marauding indinas. US politicians seem to have one fatal flaw, they love to play at the cavalry. Sometimes more often than not however they are playing at being the 7th Cavalry at the Little Bighorn.

The fiscal cliff will not so much harm investors in their bank balance. We can survive taxes and make adjustments over time. We will get used to them.

The damage is done by the constant brinkmanship of politicians playing hero.