My stock investments

[pyesetz]

A few months ago, I started getting mailings from Putnam Investments, with whom I had never done business.  The mailings purported to tell me how they were going to invest the 401(k) deductions from my future Company ℱ paychecks.  But I haven't worked for Company ℱ since 2006 and am not expecting any future paychecks from them, so I ignored the mailings.

Then I got a statement from The Vanguard Group, saying that all the money had been withdrawn from my 401(k) account but not saying where it went.  Well, *that* got my attention!  So I dug the Putnam stuff out of the wastebasket and logged onto their website.  Yep, that's where the money went.  Apparently Company ℱ decided to change their retirement service provider and my account got dragged along.  They sold my Euro index fund holdings and put me in “Retirement Ready 2025”.  Yuck!  Too conservative!  So I told them to transfer the money to my existing IRA account at Charles Schwab & Co.

Now what?  I’ve got this pile of money I need to invest.  I have never enjoyed investing.  I did a little of it years ago, before having kids.  Anything other than an index fund was just too nerve-wracking.  It was an “up” market back then, so you could buy almost anything and make money.  Things are different today.  Still, I have to try *something*.  So here's what I've bought so far:

RYOCX (Rydex NASDAQ 100 Index).  This is what I had in the IRA before the 401(k) money came in.  It came from pre-tax contributions before Company ℱ started their 401(k) plan.  I bought this in 2001, after its price had fallen for awhile.  It immediately fell some more.  Recently it's been up because it owns a lot of Apple Computer, which has done well with their iPod, iPhone, iPad, iCarly, etc.  I wouldn't buy AAPL stock directly because that company is too litigious for my taste.  But, as Scott Adams says, "Invest in the companies that you hate the most".

TNA (Direxion Small Cap Bull 3×).  This is a triple-leveraged investment in the Russell 2000 index.  If the index drops 30%, then this fund will drop 90%!  I wouldn't normally buy such a thing, but recently I got an email from HTMail offering me a free membership in SmallCapTimer, a service that calculates whether one should be owning TNA (the bull) or TZA (the bear; if the Russell 2000 goes up by 30% then this fund *loses* 90%).  It's been saying "Bull" since August and it usually switches at least every three months.  I'll keep it for awhile and see if I like it.

TD (Toronto-Dominion Bank).  Canadian banks made out like bandits at the Basel 2010 conference, which reduced their capital-reserve requirements while raising American ones.  This stock generates lots of dividends and will probably be doing even better over the next year or two.  I once heard that one should not buy dividend-producing stocks for a retirement account, but otherwise where will the money come from to buy more stocks?  I use TD for my personal banking.

RYN (Rayonier, Inc.).  I used a Schwab stock-screen to find a REIT that yields very high dividends while maintaining a high legitimacy score in Schwab's opinion.  RYN owns forests and has many enemies among environmentalists, so hopefully it will be profitable.  Maybe I'll sell it when I get sick of holding such a slimy stock.  Anyway, only 5% of the money is in RYN, vs. 10% in the other investments.

Cash (USD).  50% of the money is still in cash because I haven't thought of anything to buy with it yet.  I'm thinking of withdrawing 10% of it because of my low tax rate right now.  Why borrow mortgage money at 4% so I can keep a wad of cash earning 0%?

Questions for the audience:

1. Why should stuff like this be kept secret?  If everyone copies me, my investments will go up, right?
2. What stock screens should I use next?
3. The only investment I have faith in right now is Waterloo Region real estate, but there is no REIT for that.  How can I find things to invest in that won't worry me too much?  I'm probably stuck buying only things available from Schwab, so “Ma & Pa’s Waterloo Office Rentals, Inc.” is not a company I can buy.

Comments

[shadowcub67.livejournal.com]

Those are good, but I need higher returns because I can't afford to retire right now and I don't know how many more years I'll be able to work. Problem: most people cannot beat the market and there is no evidence that I am unusual in this way.

Exactly why I like the exchange traded versions of index funds. I don't expect to be exceptional either. And long term, the stock market indexes have done better than anything else.