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.

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