Bloomberg TV or CNBC?

As an investor information is important to me.

But where to turn for good information  that is a big question.

For me the answer actually came in hospital in the Fall of 2012.  I did not have my phone with me, nor did I have a watch so telling the time was difficult. Regular stations on the TV do not give regular time updates and skimming the stations one day I came across Bloomberg TV.

Not only did they tell me the time every half hour or so but I found their news coverage of the markets more interesting than my usual fare on CNBC.

Bloomberg though it does sometimes seem to focus upon its own magazine editorials reported items in a less catastrophic way.  CNBC often tended to the "sky is falling, sell now" style of reporting.

CNBC reports are also full of  "tips". " buy tjis now" "sell this immediately." Bloomberg has less of this kind of reporting.

One particular item that took my eye last year was a five part piece, a series of reports which showed operations on the Union Pacific Railroad (UNP) There was some financial news on the company but, for a train lover, lots of great footage of the reporter riding the trains, interviewing the rolling stock managers in marshalling yards. OK fun stuff, but also valuable information if the rolling stock manager tells you that they are moving X amount of goods more this quarter over the last years movement. You learn alot watching trains.

CNBC is tied to the studio and reporters seem to drive for the tip without any back-up for the investor to gain crucial information.

For me now Bloomberg TV is the main source of information on a daily basis.

You can also log into Bloomberg TV through the iPhone and iPad app available at the Apple Appstore

Rebalancing the Accounts.

Looking at my accounts yesterday I was left stunned and scared. In one account just one stock was dominting the account with 33% of the value. That if anything is a red flag to re-balance your account if ever I knew of one.

ING Prime Rate Trust was a nice little earner in 2011-12, it had grown from less than $5 to over $6.20 in eighteen months and as such had sucked much of my value into that one stock.

Yesterday I chose to re-balance the account by taking some profit from ING Prime Rate Trust (PPR) selling one third of my holding.

PPR is still a good cash generating dividend stock paying7% but it was just too much value in a single stock for my nerves.

The proceeds of the sale went back straight into stocks again.

Disney (DIS) is the entertainment and television conglomerate that owns ESPN and is doing streaming deals left and right at the moment. I added some stock of DIS to an existing hold position.
I also moved on XLV the Healthcare exchange traded fund. With security in the Affodable Care Act it seems likely that medical insurance will prosper in the coming few years and also medical praticioners and suppliers will benefit. XLV cover all these groups rather than the riskier one stock choice.

My third stock pick for the re-balanced cash was XOP the oil and gas exploration exchange traded fund. Again this was chosen because it limits the risk of choosing a bad stock in an are where I have little knowledge

Looking Muni?

This weekend I was looking over some of my investments and looked at my Muni stocks.

They have risen to the $111.25 level, a good return in that I bought at the $101 region and they have been giving me a good return too. Around 2% which equates to around 4% if you allow for taxes, Muni stocks often carry tax free status, though this is possibly in question as Washington DC continues to struggle with their finances.

This is leading me to question whether to hold or sell my muni stock.  Hold it and face the loss of attractive returns in a low yield market or hold and face losing cash when and if the dividends attract taxation.

EEEk. Not that old dilema again. Take the profit or face a possible fall from a great height. The investors eternal dilema. Witth this I don't want to do the old fatal trick and fall in love with this stock, but the returns are still good.

As well as some DRIP investing on the muni stock itself the monthly returns have boosted my cash flow to fuel purchases of lots of other stock.

I will hold for the moment but keep an eye on D.C. for their moves.

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!

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.

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.

Special Dividends

This December we will be seeing a glut of special dividends from corporations across all sectors.  We are told that these special dividends are in order to reward investors prior to the forthcoming possible tax hike in January 2013.

But are these special dividens really as rewarding as they seem?
I say NO!

These special dividends are nice chunks of money of course. But that money is coming out of the various companies in many forms. Some are using cash reserves, some are even borrowing money.

Using cash reserves is only ok if the company can really do without that cash in the short term. Personally I would rather take a slow steady smaller dividend and accept the risk of a tax hike myself, after all I have most invested in tax efficient vehicles such as a ROTH IRA for my non efficient brokerage account I have strong allocations of stocks in Muni Bond funds generating cash so limiting tax there.

Companies borrowing money to pay special dividends is stupid in the extreme. Why borrow money to give it away. If you can't pay a dividend then don't put yourself in debt for the future.

Some of the biggest earners from special dividends are members of the boards of some of the companies. They are in fact lining their own pockets  and claiming to have the best interests of shareholders in mind.

In order to reecover from these special dividends we will probably see dividends as a whole reduced for a year or two at least. This is because companies will need to either service the debt of loans or have little cash in the next year to maintain investment in growth of their business.

These special dividends are not the free money that they are hailed as. They come at a cost and I just hope that we the shareholders do not pay the ultimate cost, loss of our money.