Look Up Your Broker with FINRAs BrokerCheck

If you use an investment firm with a broker you can look them up by name at the FINRA BrokerCheck website.   FINRA regulates brokers.   The BrokerCheck site will give details on the brokers registration and list any complaints or violations against them.


From the site :

"FINRA oversees the people and firms that sell stocks, bonds, mutual funds and other securities. Simply type in your current or prospective broker’s name to see employment history, certifications, and licenses—as well as regulatory actions, violations or complaints you might want to know about. You also can get information about your broker’s firm. There’s no reason not to check."



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BPT Share Prices vs Oil Prices

I've owned BPT shares for a while now.    With the plunge in oil prices the performance of BPT hasn't been pretty lately.

If I were to try to time the oil market (which I am not recommending), then I think that buying some BPT right now might be a good idea.   The shares are trading just under $29 as I write this.   If oil recovers, as its likely to eventually do, then BPT will go up.    BPT doesn't track oil exactly but its very close and the price goes up and down with oil.

To see how well BPT tracks oil I got the last 10 years worth of monthly prices and charted them together.

Here is the chart:

I used the monthly closing prices of BPT off Yahoo finance.  Note thats just the share price and does not account for dividends paid.
Crude oil prices are from the EIA and are the WTI Cushing, OK price.

I'm actually not thinking of doubling down on BPT right now and in fact I'm considering closing out my Roth IRA with Scottrade and transferring to Fidelity.
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What Are Binary Options?

I know only a little about stock options.   Generally you can buy an option to purchase or sell a stock at a future point.   I have had options at work granted to me by my employer.  They allowed me to buy my our company stock for a set value, say $20, and then if the stock went up I'd be making money.   So when I hear about Binary Options, I think this is some fancy way to invest in stocks.   Nope...

Read this article at Forbes : Don't Gamble On Binary Options

They do a good job explaining that binary options are really just a form of gambling.

Also be aware that they are often unregulated and read the warning from the SEC : Binary options and Fraud

So what are they?  In short :
You can make a bet that a stock will go up or down for a very short time period.  For example you buy a $100 option that it will go up.   5 minutes later if you are right you get $170.  If you are wrong you get $15.    Do that 1000 times spending $100 x 1000 or $100,000 and get it right 50% and you make $92,500 and you lose $7500.    The allure here I think is that people think they can make informed guesses about what a stock or commodity will do.   But you can't.

Avoid binary options.  Its just gambling and the odds are stacked against you.    Plus its unregulated and prone to fraud.

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My Retirement Account Asset Mix - Jan. 2015

My personal retirement accounts are a little bit of a jumble.   I've got a Roth IRA, a 401k at my employer and another retirement account that my employer manages.   The funds are split about 2/3 in the employer managed account and 1/6 in each of the Roth and 401k.

I've got a mix of assets in the different accounts. The employer ran fund has a mix of stocks, foreign, bonds and other investments that the retirement program manages.  Its kind of like an all in one fund.    The money is in that fund by default though I should really start to move it to other funds.  My 401k is generally split between a general stock index fund and a broad bond fund about 50/50.   The Roth is mostly index funds with a dividend emphasis and a handful of individual stocks left over from my stock picking days.

Here is the current mix:

Its not looking too bad really.   The individual stocks are just whatever stuff left in my Roth IRA from when I was picking individual stocks more.   As its just ~1% of my total I"m not too concerned with it.  I've got some BPT I should liquidate next time oil goes up in value and some HPT that seems to be doing fair enough so I havent' got a plan to sell that.

The "other" category is whatever assets my employers retirement plan has that don't fall into the other categories.   Seems a mix of stuff like hedge funds and commodities.   I'd generally prefer to get out of that stuff as I don't know much about what it is and I'd prefer simple stock & bond mix.

I'd probably like to get the whole mix to something like more like 40% domestic stocks, 40% bonds and 20% foreign funds.   Or maybe 50% total stock funds and 50% bonds.

Other than my retirement accounts we have other assets in :  my wifes retirement accounts that she manages, rental real estate and cash.   The mix is roughly 40% rentals, 30% retirement, 20% house and 10% cash.    We're pretty heavily invested in real estate as you can see.

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My Roth IRA returns for 2013

In 2013 my Roth IRA had investment return of 28.0%.    The S&P500 returned 32.39% with dividends reinvested.   So I saw great growth but not as good as simply betting on 'average'.    And from that perspective I did poorly.  Its easy to feel happy about getting 28% but I could have gotten 4.39% more by simply buying a generic index fund.

Apparently I didn't figure my return for 2012 so I'm not sure how I did that year.     I don't have good records for that period but I've got one data point captured in Dec. 2011 and then I know how much I had in Dec 2012 so I can at least estimate based on that period.   At least from Dec to Dec I was up about 10%.  The S&P500 was up 16% for the year total.  Thats not perfect but close enough.   So it looks like I underperformed the S&P that year by 6%.
In 2011 I beat the S&P by1-2% so that wasn't bad.

Back in 2010 I doubled the performance of the S&P500 by getting 30.1% versus 15.06%

So for 4 years I'm  at +15%, +1%, -6% and -4%.    That puts be about 10% above the S&P500 in total for the 4 years.   Not bad I guess.   But the latest trend in the past 2 years isn't good and I'm really just riding the success of 2010.

	Me	S&P500
2010	30.10%	15.06%
2011	3.70%	2.11%
2012	10%	16%
2013	28%	32.39%
net	90%	80%

I've gotten away from my old dividend stock investing strategy due to lack of time and attention and I've now mostly switched over to investing in general index ETFs.   However I do have a preference for dividend focused ETFs.   Over 85% of my Roth account is now split between DVY, VTI and VYM.    DVY and VYM are dividend focused and VTI is just the total stock market.


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1 in 5 chance You'll Lose Money in the Stock Market in a 5 Year Period

With savings accounts generating less than 1% in interest nowadays it gets tempting for people to look elsewhere to find higher return on their savings.   Some folks then decide to invest their savings in stocks.   Now putting money in stocks is great for the long run and I still feel its going to net you the best return over 10 years or longer.   However if you have a need for money in a shorter term then putting it in the stock market can be quite risky. 

I pulled the historical return data of the S&P 500 from Yahoo Finance.  They have numbers going back to 1950, so thats over 60 years worth.

Lets just look at a 5 year period.   I'm looking at returns over 60 month periods starting on any given month.   So if you start from July 1950 and go to July 1955 or October 1983 to October 1988.  

Here's how frequently you would have gotten returns in different annual rates:

So just shy of 1 in 5 times you would have lost money in the market over a 5 year period.   About 1/3 of the time you would have averaged 10% or better, which is quite good.   In the middle you get 0% to 5% returns about 1 in 5 times and a little over 1 in 4 times you'd get between 5% and 10%. 

(side note:  The title of this article is written as a prediction but its based on the assumption that the future of the stock market will act the same as the previous 60 years and there is no guarantee that will happen moving forward, but I think it sounds better the way written and I personally think the market will more or less act similarly in the future)

The worst return for a 5 year period was -8.5%  annually and the best return was 26.2% annually.  

The odds are still in your favor that you'd have done well in any given 5 year period.     However the point here is that there is still a significant risk that you could lose money.   Theres still that roughly 1 in 5 times that people would have LOST money in the market.    Keep in mind that this doesn't account for inflation.     And it doesn't compare to simply making 1% or so in a CD or getting a safer 0-5% return in low risk bond funds.   Stock market investment is not for the short term.    If you can't stand to lose money then I wouldn't put money in the stock market for less than 5 years. 


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Hindenburg Omen is still NONSENSE

The Big Picture recently wrote  Why Do People Fear the Hindenburg Omen? and they have a nice graphic showing all the previous 'Hindenburg Omen moments mostly while the market grew but occasionally dropped.     Their mention of the Hindenburg Omen was the first I'd heard of it lately.   But apparently we hit another Hindenburg Omen on Friday.

I found the WSJ articles on it : Morning MoneyBeat: Hindenburg Omen Rears Ugly Head
 Hindenburg Omen Creator: ‘I’m Hunkering Down for Possible Rough Ride’
CNBC also says Why 'Hindenburg Omen' Is Just a Superstition


Please see my previous article on the topic: "Hindenburg Omen" is Nonsense

Its nonsense.   ... Nonsense.     Just ignore this stupidity.   The track record is a horrible 25% correct. 

You could do a better job predicting if the market will go up or down by flipping a coin.   Heads = bull, Tails = bear.  

I honestly think the only reason it gets any press mention is that it has a ominous sounding name that looks good in headlines.  Oh no!!!   The scary Hindenburg Omen is coming!!    Don't bother looking at the fact that its hardly ever right...   Hindenburg!!!

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BP Prudhoe Bay Royalty Trust (BPT) Annual Report for 2012

I still own some BP Prudhoe Bay Royalty Trust (BPT) shares in my Roth IRA.   I've been trying to decide when I should sell them.

I recently got the BPT annual report for 2012 in the mail.  I like to read the annual report of a company (or trust ) to get some more details on them.

Production :   Page 16 has a history of production for 2008 to 2012.   As of 2012 the working interests of the trust were ouputting 79.7 thousand barrels per day of Oil and 5.8 of Condensate.   That works out to 29M barrels of oil a year and 2.1M of condensate.

Reserves : Page 18 says: "BP Alaska has estimated that the net remaining proved reserves allocated to the Trust as of December 31, 2012 were 75.517 million barrels of oil and condensate,"

and they say:

"Based on the 2012 twelve-month average WTI Price of $94.71 per barrel, ... BP Alaska calculated that as of December 31, 2012 production of oil and condensate from the proved reserves allocated to the 1989 Working Interests will result in estimated future net revenues to the Trust of $2,176.0 million, with a present value of $1,314.9 million."

Page 22 says : "Royalty payments to the Trust are projected to cease after 2027"

I must be misunderstanding a detail in the report because as I figure it their current production rate and reserves would mean they only have about 3 years or oil left.  

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Dividends Are Not That Safe

I generally like the idea of investing in stocks that pay good dividends.  This has been a strategy of mine with my Roth IRA investments.    I was using a High dividend stock strategy in 2008 but at that time as I said it wasn't hard to find blue chip stocks paying 4-7% yields and ETFs yielding 4-9%.  That was a reflection of the stock market being full of bargains at the time.  Nowadays yields from dividends aren't as high and stocks aren't as cheap in general.

When you've been writing a blog for nearly five years like I have you sometimes end up repeating yourself.   I first wrote about this topic in 2009 with the article Are There Safe Dividends? and I pointed out then that dividends really are not 'safe'.   I found out myself after GE slashed their dividend not long after I had bought them.   I later questioned Why Do I Own GE Stock?

Of course it wasn't just GE that cut their dividend.   A lot of major companies cut dividends during the financial crash around the Great Recession.

Lets look back at the Dow components from 2008.

8 of the 2008 Dow components  have since had dividend cuts:
Bank of America (BAC) down from 0.32 to .01
Alcola (AA) slashed dividend from .17 to .03
American International Group (AIG) went from $4.40 to 0
Citigroup (C) cut their dividend a few times from $5.40 to $3.20 then $1.60 then finally to 0.10 after 1:10 split
GE from .31 to .10 like I mentioned
General Motors - bankrupt from 0.25 to 0
JP Morgan Chase (JPM) - 0.38 to 0.05 back up to 0.3
Pfizer (PFZ) .32 to .16 but the up to .22


Now not all those stocks are still on the Dow as the Dow changes gradually over the years  as some stocks are removed and others added.

Thats just over 25% of the Dow components from 2008.   And these are the big name blue chip companies that are generally safer and more established.

Now this is not to say that investing in dividend paying companies isn't a good strategy.  But you shouldn't put too much faith in the future payout rates on those dividends.   I see people building dividend paying portfolios with the intention of building a passive income.  If you'd done that in 2007 and bought up Dow stocks then retired early with the intention of living off the dividends then you might have been in for a nasty ~25% cut in income come around 2009.


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Transitioning to More Passive Investments in my Roth IRA

I recently sold off four of the individual stocks that I held in my Roth IRA account.   I had shares of Verizon, AT&T, Merck and Johnson & Johnson.   All but JNJ had performed pretty well overall.   The V and T were up >10% annually during the time I held them, so not bad.  

A bigger reason that I'm selling is that I haven't spent much time managing and actively watching my Roth IRA investments.    It takes time to keep track of stocks and I haven't been dedicating any time to my Roth IRA investments.  So for now at least I think it makes more sense to invest in board index funds if I'm going to set it on 'auto pilot'.  

Overall this year my Roth IRA is up about 15.4%.  Thats not bad at all, but if I'd bought the S&P 500 index (VOO) I'd be up 17.9% in the same period.   So my +15.4% didn't beat a basic index. 

I did have one setback when my shares in the BP oil trust (BPT) dropped significantly.   From what I gather the Wall Street Journal ran an article pointing out that oil trusts are depleting resources and that caused the trust to drop significantly.  Apparently many investors weren't really aware of what they'd bought.   Right now BPT is pretty fairly valued, so I'm holding it for the moment.  Its still paying a healthy dividend and its a good hedge against oil prices.

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S&P 500 Return Calculator

This is a post about another post.    DQYDJ created a S&P 500 Return Calculator 
Their calculator is neat for a few reasons.  It lets you pick any start date and end dates by month and year.  You can see the total growth and the annualized returns.   They also figure the returns if dividends are reinvested and without dividends.  Finally the calculator  also has a feature to adjust the figures for inflation so you can see how the return performed in real dollar terms. 

One good use of the calculator is to compare your own investment returns to the S&P 500 index.   I've done this kind of thing in the past with my own returns on my Roth IRA investments.   Comparing your return rates to an index is an important step to make sure you're performing well versus a simple benchmark. 

Lets walk through an example of benchmarking your investment returns to the S&P 500 using the calculator:   Lets say you put $5000 into your Roth IRA back in April 2009 and its grown by 45% over the past 3 years.   If we figure the compound annual growth rate on that it comes out to about 13%.   Thats pretty good right?   Who would complain about 13% annual growth?    But... how does it compare to the S&P 500?  If you use the S&P 500 Return Calculator  then you can see how the S&P 500 index compares as a benchmark.   Using the calculator I plug in April 2009 for the start date and April 2012 for the end date.  I'll leave the 'adjust for inflation' box unchecked since we're not accounting for inflation now.  I hit calculate and it informs me that in the same period the S&P 500 was up a total 66.2% with dividends reinvested for annual compound growth of 18.4%.   Now that 13% annual return doesn't seem so hot does it?   The index beat my returns by 5% annually.  

You probably have multiple investment purchases spread over time.  So rather than having a single IRA contribution in 4/09 you more likely added money in April of 2008, April 2009, March 2010, April 2011, and finally in April 2012.   In that kind of case you can use the   S&P 500 Return Calculator multiple times to figure the growth of the S&P 500 for each time frame.  So if you put $5000 in each year then use the calculator on each date period to see how each  $5000  contribution would have grown.  From April 08 to '12 the S&P is up 3%.  So that $5000 is now worth about $5150 (103% x $5000).   From April 09 to '12 the S&P is up a nice 66% so that contribution would have grown to $8300.  If you do this for each contribution and add them up you'll get the total growth of similar investments in the S&P over time.  You can then compare that to what your own account balance has grown to.

Someone could argue that the S&P 500 isn't a great benchmark.   That may be true in general but its a basic starting place.   For example if your investments are all in safe bond funds then comparing to the S&P 500 is a bit of an apples to oranges comparison.   I really wouldn't expect bonds to out perform the S&P500 long term.   But its still good to know where your investments fall in comparison to a basic stock index like the S&P.







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The Volatility of Stocks versus Gold

Lately the stock market has been on a fairly wild ride of ups and downs.   Some people may be thinking that they don't have the stomach for that rollercoaster and choose instead to put their money into gold.   However gold prices can be just as volatile as the stock market.

To compare volatility I decided to compare the monthly high and low prices in 2011 for both gold and the Dow.  I grabbed historical prices for the Dow Jones for 2011 on a monthly basis.   I then go the monthly highs and lows for the spot gold price off the Kitco website.

First the Dow:

	HI	LOW	DIFF
January	12,072	11,546	5%
February	12,418	11,893	4%
March	12,423	11,548	8%
April	12,886	12,094	7%
May	12,928	12,272	5%
June	12,569	11,822	6%
July	12,794	12,044	6%
August	12,321	10,589	16%
September	11,733	10,572	11%
October	12,303	10,362	19%
November	12,212	11,193	9%
December	12,357	11,728	5%

The average difference between high and low per month was 8.5%.    In October there was a 19% range between the high and low trading values of the Dow.    February had the smallest range between high and low at only 4% difference.

Here is the data for the gold prices:

	HI	LOW	DIFF
January	1388	1319	5%
February	1411	1328	6%
March	1447	1400	3%
April	1535	1418	8%
May	1541	1478	4%
June	1552	1498	4%
July	1628	1483	10%
August	1877	1623	16%
September	1895	1598	19%
October	1741	1617	8%
November	1795	1681	7%
December	1752	1531	14%

The average difference between high and low price for spot gold was 8.7%.   March had the smallest difference between high and low at only $47 or 3% difference from $1400 to $1447.     September had the highest variation and prices ranged from $1598 to $1895 in that month which is about 19% difference.

Comparing these values you can see that the volatility in prices between spot gold and the Dow were actually quite similar in 2011.   

Lets take one more look at the data.  Here is a graph showing the monthly highs and lows of gold and the Dow plotted.    Gold price is on the left axis in dollars and the Dow value is on the right axis.

Viewing it visually you can also see the similar amount of volatility between gold prices and stock prices over the 2011 year.

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2011 Total Returns for my Stock / Retirement Investments

My stock investments are all in my retirement accounts.   In total my retirement accounts are up 3.9% for the year 2011.    Thats not bad.

I have retirement spread over 3 accounts :
Roth IRA +3.7%
401k -7.6%
Company retirement +6.9%

The Roth IRA and the 401k are controlled by myself and the company retirement money is managed by my employer.  

I did fair with my Roth IRA money but I didn't do very well with my 401k investments for the year.   Combined the Roth & 401k are up 2.3% total.    I didn't have much of a strategy for my 401k.   Much of the year I wasn't paying a lot of attention to my Roth or 401k investments.  

Most of the money is in the company retirement account.   I'm fortunate that my employer did a pretty good job of handling that investment on my behalf. 

If I had put all my money in the Vanguard S&P 500 ETF (VOO) then it would be up about 1.3% for the year total.

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How Have My ETF Investments Done

I have had several investments in ETF funds in my Roth IRA.  I've bought the funds to have widely diversified investments.  Some of the funds are ones that hold stocks with higher dividend payouts.


Here is a table for all the ETFs that I have bought.   I show the original purchase daid, the amount I paid per share, total dividends received to date, the current trading value per share and the cumulative annual return rate for the investments.

ETF	bought	paid	dividends	current	return
DVY	May-10	$44.37	$2.68	$52.94	15%
ICLN	May-10	$15	$0.57	$8.40	-28%
ICLN	May-10	$15		$17.63	17%
PEY	Sep-10	$8.08	$0.44	$0.07	22%
VTI	Mar-11	$68.32	$0.86	$63.49	-9%
VYM	Jan-09	$35.41	$3.20	$44.54	10%
VYM	Aug-11	$41.14	$0.30	$44.54	29%

I bought ICLN and then sold off most of it at $17.63 making a profit.   It has then dropped under $9 so the stock I've got left is negative.  All together I'm down 5% on that one.
I bought VYM two times so theres two entries for that one.

Here is how my investments have compared to the S&P 500's performance in the same periods :

	mine	SP500	diff
DVY	15%	8.6%	6%
ICLN	-5%	8.6%	-14%
PEY	22%	10.1%	12%
VTI	-9%	-8.6%	0%
VYM	10%	10.3%	0%
VYM	29%	6.1%	23%

As you can see I'm beating or equalling the S&P in most cases.   My investments in VTI & VYM are in broad market indexes so I'd expect those to be a lot closer to the performance of the S&P 500 than not.
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How my HPT and HRP/CWH REIT Investments have Fared

I've had two major investments in REITs in my Roth IRA.   Hospitality Properties Trust (HPT)  and HRPT Properties Trust (HRP) which later changed name to CommonWealth REIT (CWH).    Both were part of my original high dividend stock strategy.   The idea was to buy stocks in my Roth that had good value and high dividends.   At that time in late 2008 it was not hard to find REITs with yields in the double digits and the REIT ETFs were paying 9% plus.    HRP & HPT were two REITs that I'd watched and evaluated for some time and I felt both were good buys.    Both of these REITs performed quite well and in fact within a year my HRP had doubled in value.

First the HPT: 

I bought my HPT stock in January 2009.  I paid $14.15 for it.   Today it trades for $22.21 and it has given me $4.37 per share total dividends so far.   In the time I've owned it my HPT has returned 23% annually.

Second the HRP / CWH: 

I originally bought HRP in November 2008 for $3.45.  I then sold about half my shares in Sept. 2009 when it hit $7.20.   I sold a third of the remaining shares in March 2010 at $8.    Then HRP changed their name to CWH and did a 1 for 4 split.   I've also gotten about 76¢ per original share in dividends total the period I've owned them. My original investment has doubled.   Altogether my originally investment in HRP is up around 26% annually in the 3 years I've held it.

Compared to benchmarks.

I will use SPDR S&P 500 (SPY) and Vanguard REIT Index ETF (VNQ) as benchmarks for my performance.

Here is how each of my REITS fared versus the benchmarks in the given time periods that I owned them :

HRP	SPY	VNQ
26%	9%	20%

and

HPT	SPY	VNQ
23%	10%	20%

While I beat the S&P 500 index pretty handily I only beat the REIT index by a few points.   Outperforming an industry index by 3% or 6% is still quite a bit.   I would have taken less risk with VNQ however.

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How Well Did I Time the Market in Hindsight?

Hindsight is 20/20.   Lets get a good look at how well I did timing the market on some of my stock trades.   The following are all trades I did in my Roth IRA account.    I created graphs using the charts on Yahoo Finance to show how my buy and sell points looked in comparison to the ups and downs of the stocks in question. 

Here is my GE stock :

I paid $20.85 for GE in November 2008 and then sold it for $16.90 in December 2010.    I lost about 19%.   If I'd waited a few months to buy and then also waited a few months to sell I would have timed it perfect.  In March of 2009 GE traded for $7.06 and in Feb 11 it was up to $21.44.    If I'd bought in March 09 and sold in Feb. 11 then I could have tripled my money.   ON the other hand I could have been unlucky to buy GE before the financial collapse and paid $41 for it in October 2007.  If I had then panicked at the bottom when it hit $7 in March 2009 and sold then I would have seen a 83% loss.

Here is the HOG :

I paid $17.45 for HOG in January 2009 and sold it for $34.90 in April 2010.    I actually did quite well on this one.   I more than doubled my money on the deal.   If I'd timed it just right I could have bought for as low as $8.42 in March 2009 and then held it to the peak of $45.91 in July 2011.   That would have been 5 times what I paid.   If I'd timed it badly I might have paid $42.80 in September 2008 and then sold at the bottom of $8.42 in March 2009.   That would have been a 80% loss.

This is how the BMY looks :

Bought in July 2009 for $19.60 and sold in December 2011 for $33.36.   I actually did quite well on this one if you look at that chart.   We'll have to see what BMY does in the coming months to know how well.   If the price keeps going up and up then maybe I sold too soon.  We'll see.  



--This article may contain referral links which pay this site a commission for purchases made at the sites.

My Johnson & Johnson and Merck Investments

Last fall I bought shares of Johnson & Johnson (JNJ) and Merck (MRK).   I bought my JNJ in late October 2010 and the MRK in early September 2010.

JNJ =
I paid $1,532.88 for 24 shares at $63.87 each.    I've received dividends of $53.28.   Today JNJ trades at $63.51.   In total I'm up about 2.9%  


MRK =
I spent $1,072.50 on 30 shares at $35.75 each.   I've collected $57 in dividends.  MRK is trading at $35.41 now.    Overall its up about 4.3%


The S&P 500 has out performed both of these investments.   For the same periods the S&P 500 is up around 4.3% compared to JNJ at 2.9% and up over 12% compared to the 4.3% for MRK.

Combined my investments in JNJ & MRK are up about 3.4% total.   If I'd instead bought S&P500, I would be up about 7.4%.

The PE of MRK is currently a hefty 25.8 and their dividend is 4.7%.    JNJ's PE is a better 15.49 and their yield is 3.5%.
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My Investments in AT&T and Verizon

I own shares of AT&T (T) and Verizon (VZ) in my Roth IRA account.    I bought them because they are solid blue chip companies, they had relatively low PE and relatively high dividend yields.   I figured that both companies have decent income from a wide and stable business base. 

First the AT&T:

I bought 56 shares for $29.41 in November 2008 for a total cost of $1646.96.   Since then I've gotten $282.24 in dividends.   Currently AT&T trades at $29.01 so my 56 shares are worth $1624.56.     I'm up $259.84 total in just over 3 years.   Thats annual growth of just about 5% per year.  

Now the Verizon :

I bought my Verizon shares in January 2010.   I paid $1374.11 to get 44 shares at $31.23 each.     Today Verizon is worth $38.35.   Verizon has paid out $149.60 in dividends.    In July 2010 I got 10 shares of Frontier Communications as part of Verizon selling off some of their business to Frontier.  Frontier trades at $5.13 so my shares are worth $51.30.  I've also gotten $13.43 in dividends from them.  

My initial $1,374.11 is now worth $1,901.73 total.   Thats a 38% increase in just under two years.  This equates to about 17% annual growth.

Versus Benchmark

In about 3 years my AT&T shares have grown around 5% per year average.   In that same period the S&P 500 went from 970 to 1236.   That equates to around 8.4% annual growth.  My AT&T investment has underperformed the S&P 500 by a ways.

On the other hand my Verizon investment has grown 17% annually for the 2 years that I've owned it.  The S&P 500 went from 1150 to 1236 in that period and so only grew about 3.6% annually over the two years.

My AT&T investment did worse than the S&P 500 but my Verizon did better.   Combined I'm beating the index.  Between my AT&T and Verizon I'm up about 25% total.   If I'd instead bought the S&P 500 I'd be up about 18% now.


Today the PE for AT&T is at 14.7 and the dividend yield is 5.9%.   Verizon is PE of 15.4 and dividend yield of 5.2%.   They aren't any more or less attractive from when I bought them.   I am going to continue to hold for now.
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My Investment in Annaly Capital Management (NLY)

About a year ago I bought some shares in Annaly Capital Management, Inc. (NLY).    NLY is a REIT that is highly leveraged and pays out a substantial dividend yield.

I bought 26 shares at a price of $18.35 per share.    The total investment was $477.10.     In the past year I've received dividend payments of $65.26 total. 
Today NLY is now trading at just $16.18.    Combining the dividend payments of $65.26 and the current capital value of $420.68 the value is now $485.94.   

In total I'm up roughly 1.8% for the year on the investment.

The S&P 500 went from 1258 to 1234 in the same period so its down marginally by about 2%.

The Vanguard REIT ETF (VNQ) is virtually flat as well going from 55.17 to 55.13.   But the ETF has paid out about $2 in that time.   So in total VNQ is up around 3.6%

Considering that the NLY is up only 1.8% and the Vanguard REIT ETF is up about 3.6% I don't consider my NLY investment a very good one. Buying the diversified ETF would have been a lot safer and it has performed better as well.

I decided to sell my shares of NLY.    When I bought the idea I had in my head was that I'd make >10% dividend and expected that the market value of the shares would likely stay flat.   I knew the investment was a little risky given how NLY operates.   But I figured (hoped) with a 10%+ dividend that it would be hard to go wrong.  I didn't figure or really expect the market value of the shares to drop like they did.  I don't consider this investment a success but on the other hand I didn't lose money.

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I Sold Bristol Meyers Squibb

In July 2009 I bought Bristol Meyers Squibb (BMY)

At the time I paid $19.6 for 25 shares.

Reasons I gave for buying the stock were :
1)6% dividend yield
2) PE of 7.5
3) solid financials
4) adding pharmaceutical holding
5) diversified

I recently sold my holdings for $33.36 per share.   The PE is now up to 17.18 and the dividend yield is 4%.  
 I mainly sold because the PE had gotten much higher and it had a pretty good run up in price.  With that high of a PE it isn't a particularly good bargain/value stock today.

Thats a 70% increase in market value in 2 years 5 months.  Over the past couple years the stock has also paid out $72.75 in dividends.

Initially spend $490, received $72.75 in dividends then sold for $834.

This equates to about 29% annual growth on investment including the dividend pay out.

By comparison in July 2009 the S&P 500 was trading around 900 levels and today is up to 1234.  The index then has gone up about 33% total or around 12% annually.   My investment in BMY easily doubled the performance of the S&P 500 index.


I would consider this a successful investment.   I  bought a solid company with good financials that was trading for a relatively low price and then rode the stock till it grew substantially then cashed in nice profit.

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