Is the stock market trying to play nice today?

wasserball said:
If you take the time element out of investments you will do very well in the stock market. As the result of my strategy, my asset has increased in wealth equal to 1.5% of the people in the USA. A problem I see is the financial advisors scare you by presenting only the down side of the stock market rather than its long term growth over years. I am my own financial advisor since 1981 and profited from my decisions. You can too, but maybe too late.
Click to expand...
I agree wasserball. I've been my own financial advisor since about a year after I started investing (36 years ago). Since then, the two times I followed the advice of well known experts touting investments, they both lost money and I had to cut my losses and sell them, as previously mentioned in another thread. One did come in handy though to offset the capital gains.
 

It has been a long upward line over the last 10 years and at sometime it will be going the other way. Like most have said here if you invest go in it for the long haul. If you need market money and depend on it for life then you may need to do what works for you.
I'm a buy and hold investor just riding the waves and weathering the storms and enjoying the sunny days. It has worked very well for me.
 
street said:
It has been a long upward line over the last 10 years and at sometime it will be going the other way. Like most have said here if you invest go in it for the long haul. If you need market money and depend on it for life then you may need to do what works for you.
I'm a buy and hold investor just riding the waves and weathering the storms and enjoying the sunny days. It has worked very well for me.
Click to expand...


there are lots of all weather portfolio's that make money and protect in down markets ... we use one at this stage after having multiple 6 figure gains just in one year alone . we still participate in markets but we also are protected in down trends .

if anyone wants to discuss defensive portfolio's i will throw out some ideas ....
 

Buy low, sell high. Just looking at one of my stocks, it has been low all year. The dividends I've reinvested have gained me 266 shares of that stock. If the stock had been selling at its highest point I wouldn't have gained nearly as many shares.

The price per share matters only when buying or selling. A high price per share makes your account look good but if you're not selling it doesn't mean much. When reinvesting dividends you are buying so a low price gets you more shares.
 
rkunsaw said:
Buy low, sell high. Just looking at one of my stocks, it has been low all year. The dividends I've reinvested have gained me 266 shares of that stock. If the stock had been selling at its highest point I wouldn't have gained nearly as many shares.

The price per share matters only when buying or selling. A high price per share makes your account look good but if you're not selling it doesn't mean much. When reinvesting dividends you are buying so a low price gets you more shares.
Click to expand...


There is so much wrong with this post i don't know where to start .

first off there is no such thing as a loss or gain on paper because you did not sell , that is pure nonsense .

that is your value at any point in time .. whether you just hope you can ride this same investment back up , or sell and ride another investment is the same thing . selling may generate at tax implication but other then that , that is your value at that point in time .

you may not care because you are hoping it goes back but that is all you got .

we all know the saying buy low sell high. no other mantra has lost more money for investors . the real deal is buy high and sell higher which makes far more money .

why?

there is another saying " objects in motion stay in motion , until they hit something .

falling prices tend to feed on themselves and go lower until they don't. know one knows what low is because we all thought low in 2008-2009 was when the market fell 1000 points.

well that momentum turned into 5000 and 6000 points. people lost their shirt trying to buy low.

a better saying is buy high and sell higher. when that trend is already moving up that upward momentum may be the better time to buy . buy high and sell higher may be a whole lot more profitable but you never hear that.

why?

because the people who know don't tell , and the people who tell don't know.

think about it.

you are totally confused about dividends as that statement about had the stock been at its highest point proves that fact .

buying more shares in a down market via dividends is a wash in value .

each payout has a mandatory drop in share price of an equal amount ... it is a wash when reinvesting whether the price per share is up or down .

you need to add new money and buy equity at lower prices and add to holdings increasing dollars invested beyond what you had . reinvesting merely switches the existing value around so it is configured differently but adds no more new dollars . in fact it does the opposite if you do not reinvest and leaves you with less dollars starting out being acted on .

if you have 1000 shares of a 100 dollar stock, that is 100k invested

if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left for markets to act upon, that is 81k . if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same 90k for markets to compound on .

markets don't care about number of shares , that is why stock splits are a wash . more shares at a lower starting price equal the same value as you had .

so you need to understand there is nothing to be gained when you reinvest and share prices are down ...you need to invest new money increasing the dollars you had in a down market to see an advantage .

i suggest you do some research and get a handle on how dividends work if you are not following why you are wrong here .. stocks grow by total return-period . you need at least the same appreciation in the stock as the payout or you wont even see the return the dividend is ..
 
Last edited:
rkunsaw said:
Buy low, sell high. Just looking at one of my stocks, it has been low all year. The dividends I've reinvested have gained me 266 shares of that stock. If the stock had been selling at its highest point I wouldn't have gained nearly as many shares.

The price per share matters only when buying or selling. A high price per share makes your account look good but if you're not selling it doesn't mean much. When reinvesting dividends you are buying so a low price gets you more shares.
Click to expand...
You are spot on...when you are reinvesting your dividends when the stock price is low you will get more shares.

"The price per share matters only when buying or selling" That is a fact!
 
oldmontana said:
You are spot on...when you are reinvesting your dividends when the stock price is low you will get more shares.

"The price per share matters only when buying or selling" That is a fact!
Click to expand...


you get more shares but the investment is reduced by the same amount automatically .. there is no gain here at all ...go look at my example ...

it is like a stock split . you get more shares at a lower value .. it is still the same dollars being acted on by markets ...if you don't understand this i suggest you research how dividends work ....




if you have 1000 shares of a 100 dollar stock, that is 100k invested

if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left for markets to act upon, that is 81k . if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same 90k for markets to compound on .
 
oldmontana said:
You are spot on...when you are reinvesting your dividends when the stock price is low you will get more shares.

"The price per share matters only when buying or selling" That is a fact!
Click to expand...
i really hope you don't believe your own bull ... because you could not be more wrong .

in fact whether one sells or not your draw rate in retirement is based on portfolio value ... not just what you sell . your logic is pure nonsense . if your portfolio is down 50% , sell or not that is all you have . all you are doing is hoping it goes back .

the fact you don't care what it is worth does not mean that that value does not represent your net worth at any time as well as it can be decades for that stock to come back , or maybe never like the blue chip graveyard of failed stocks

are you trying to tell us if you close out your position each night and bought back the same stock at the same price that is somehow different from keeping the same money in play over night ? you got to be kidding with that logic ..

what we have here is the ill-informed parroting the ill-informed
 
Last edited:
mathjak107 said:
i really hope you don't believe your own bull ... because you could not be more wrong .

in fact whether one sells or not your draw rate in retirement is based on portfolio value ... not just what you sell . your logic is pure nonsense . if your portfolio is down 50% , sell or not that is all you have . all you are doing is hoping it goes back .

the fact you don't care what it is worth does not mean that that value does not represent your net worth at any time as well as it can be decades for that stock to come back , or maybe never like the blue chip graveyard of failed stocks

are you trying to tell us if you close out your position each night and bought back the same stock at the same price that is somehow different from keeping the same money in play over night ? you got to be kidding with that logic ..

what we have here is the ill-informed parroting the ill-informed
Click to expand...

When you are reinvesting your dividends when the stock price is low you will get more shares.

That is a fact and you can call me ill-informed but I am not.

"are you trying to tell us if you close out your position each night and bought back the same stock at the same price that is somehow different from keeping the same money in play over night ? you got to be kidding with that logic .."

No, and that has not got a thing to do with what I posted.
 
oldmontana said:
When you are reinvesting your dividends when the stock price is low you will get more shares.

That is a fact and you can call me ill-informed but I am not.

"are you trying to tell us if you close out your position each night and bought back the same stock at the same price that is somehow different from keeping the same money in play over night ? you got to be kidding with that logic .."

No, and that has not got a thing to do with what I posted.
Click to expand...
but it means nothing to you just like a stock split or a fund distribution . it is a wash

it is no different then a fund distribution or dividend is .

you go to sleep and have 10k invested in 1000 shares at 10 a share .... you wake up and the next day you got your distribution and reinvested it ..

you now have 10k invested consisting of 1100 shares at 9.09 a share ... you have more shares but the same 10k you had . the price has been lowered to match the payout automatically .

if markets go up 10% it is still on the same 10k . whether you got a dividend or not it is still 10k you have invested being compounded on regardless . in fact if you didn't reinvest all you would have had is 9k left invested and the 1k dividend in pocket


so lets suppose markets fell 50% like you say ...so now you have 5k invested ... 1100 shares at 4.55

the company pays out the same dividend so the yield is up to 20% , sounds great right ?

well you get your dividend and reinvest it . you now have 1210 shares at 4.13 , which is the exact same 5k you had before all the pocket switching .


if markets went up 10% your 5K goes up 10% on your 1210 shares at 4.13 .

if no dividend was paid the 5k went up 10% on your 1100 shares at 4.55

your balance is identical whether a dividend was paid and reinvested as if it was not paid out . it is always a wash in value .


here is what you miss ...your invested dollars must be reduced by the same amount paid out ... it is mandatory ...so what you had pre ex div is the same dollars you have after ex div ...it is as if no div was ever paid in effect .

i strongly suggest you learn this and go over it because what you think you know , ain't so and the way dividends work is important to understand .

here are the rules you fail to understand .

FINRA MANUAL :

5330. Adjustment of Orders

(a) A member holding an open order from a customer or another broker-dealer shall, prior to executing or permitting the order to be executed, reduce, increase, or adjust the price and/or number of shares of such order by an amount equal to the dividend, payment, or distribution on the day that the security is quoted ex-dividend, ex-rights, ex-distribution, or ex-interest, except where a cash dividend or distribution is less than one cent ($0.01)
 
Last edited:
oldmontana said:
When you are reinvesting your dividends when the stock price is low you will get more shares.

That is a fact and you can call me ill-informed but I am not.

"are you trying to tell us if you close out your position each night and bought back the same stock at the same price that is somehow different from keeping the same money in play over night ? you got to be kidding with that logic .."

No, and that has not got a thing to do with what I posted.
Click to expand...


sure it does . because you are trying to tell us the value of an investment is only relevant when you sell and that is just horse-doo ... it is so wrong in logic that i really hope you don't believe your own bull .
 
Last edited:
mathjak107 said:
There is so much wrong with this post i don't know where to start .

first off there is no such thing as a loss or gain on paper because you did not sell , that is pure nonsense .

that is your value at any point in time .. whether you just hope you can ride this same investment back up , or sell and ride another investment is the same thing . selling may generate at tax implication but other then that , that is your value at that point in time .

you may not care because you are hoping it goes back but that is all you got .

we all know the saying buy low sell high. no other mantra has lost more money for investors . the real deal is buy high and sell higher which makes far more money .

why?

there is another saying " objects in motion stay in motion , until they hit something .

falling prices tend to feed on themselves and go lower until they don't. know one knows what low is because we all thought low in 2008-2009 was when the market fell 1000 points.

well that momentum turned into 5000 and 6000 points. people lost their shirt trying to buy low.

a better saying is buy high and sell higher. when that trend is already moving up that upward momentum may be the better time to buy . buy high and sell higher may be a whole lot more profitable but you never hear that.

why?

because the people who know don't tell , and the people who tell don't know.

think about it.

you are totally confused about dividends as that statement about had the stock been at its highest point proves that fact .

buying more shares in a down market via dividends is a wash in value .

each payout has a mandatory drop in share price of an equal amount ... it is a wash when reinvesting whether the price per share is up or down .

you need to add new money and buy equity at lower prices and add to holdings increasing dollars invested beyond what you had . reinvesting merely switches the existing value around so it is configured differently but adds no more new dollars . in fact it does the opposite if you do not reinvest and leaves you with less dollars starting out being acted on .

if you have 1000 shares of a 100 dollar stock, that is 100k invested

if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left for markets to act upon, that is 81k . if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same 90k for markets to compound on .

markets don't care about number of shares , that is why stock splits are a wash . more shares at a lower starting price equal the same value as you had .

so you need to understand there is nothing to be gained when you reinvest and share prices are down ...you need to invest new money increasing the dollars you had in a down market to see an advantage .

i suggest you do some research and get a handle on how dividends work if you are not following why you are wrong here .. stocks grow by total return-period . you need at least the same appreciation in the stock as the payout or you wont even see the return the dividend is ..
Click to expand...
Once again I have to disagree with some of what you wrote. And we may be talking about apples and oranges here. You may be referencing individual stocks only where the dividends and capital gains are taken out as distributions. I'm referencing mutual funds and ETFs that are reinvested. The share prices don't always drop the same amount as their distributions. For instance on the day before the dividend was paid, the share price of one of my ETFs was $56.94. The dividend was .466/share on12/12 at which time the share price was $57.51. It closed Friday 12/20 at $58.06. So are you telling us that someone who's reinvested dividend bought 1,000 shares didn't make $550 in a week? Also, my first shares were purchased in the $28 - $30 range. Are you also saying that the $30 - $28 increase in share price doesn't make the dividends purchased at the former ranges worth much more money?
In addition, one of my mutual funds paid .149/share on 12/20 @ $19.10 share. The day before the NAV was $19.08. Stocks, ETFs and mutual funds fluctuate in value all the time. So yes, sometimes what you're saying holds true...but as share prices consistently increase over time as in the ETF example, I can't see how you can claim it's the same money. BTW...the mutual fund I reference here is in a Roth. I haven't contributed to it in over 22 years....yet the value has almost tripled. How can it be considered the same money?
 
Never have I trusted the group known as "financial advisors". I was aggressive in my own picks in my early 30's winning some and losing others coming out ahead. The biggest lesson I learned throughout the years was hanging on to a very successful mutual fund when the 2008-9 crack happened. The second lesson I learned (the hard way) was investing in a emotional favorite. In my silver years I invested in many dividend stocks and they have been good to my needs and expectations. Fortunately, I don't need to invest to earn money anymore but I am hooked on watching the markets. I watched them long before I had any money to invest as my dad got me interested, thankfully.
 
OneEyedDiva said:
Once again I have to disagree with some of what you wrote. And we may be talking about apples and oranges here. You may be referencing individual stocks only where the dividends and capital gains are taken out as distributions. I'm referencing mutual funds and ETFs that are reinvested. The share prices don't always drop the same amount as their distributions. For instance on the day before the dividend was paid, the share price of one of my ETFs was $56.94. The dividend was .466/share on12/12 at which time the share price was $57.51. It closed Friday 12/20 at $58.06. So are you telling us that someone who's reinvested dividend bought 1,000 shares didn't make $550 in a week? Also, my first shares were purchased in the $28 - $30 range. Are you also saying that the $30 - $28 increase in share price doesn't make the dividends purchased at the former ranges worth much more money?
In addition, one of my mutual funds paid .149/share on 12/20 @ $19.10 share. The day before the NAV was $19.08. Stocks, ETFs and mutual funds fluctuate in value all the time. So yes, sometimes what you're saying holds true...but as share prices consistently increase over time as in the ETF example, I can't see how you can claim it's the same money. BTW...the mutual fund I reference here is in a Roth. I haven't contributed to it in over 22 years....yet the value has almost tripled. How can it be considered the same money?
Click to expand...


Mutual funds are identical ...for every dollar they give you the share price is reset back ..Except mutual fund bond funds . Etf bond funds do drop the same though as stock etfs.
Mutual fund bond funds keep the interest on the side crediting the owner daily ....it does not get calculated in to the share price like etfs and stocks .

There is no exceptions ..

You need to look at the ex div. dates. And then the pay dates ..

One of my etfs went ex div last week ...the share price dropped by as much as they WILL pay out .. but we don’t get paid and reinvested until 12/26 ...

Only mutual fund bond funds work differently not etf bond funds, mutual funds ,stocks or etf stock funds

But for purposes of discussions it is easiest to understand from a next day perspective..

So once a stock or fund goes ex div whatever is paid out is subtracted off your value before the stock or fund can trade .....if you had 10k and got a 1k dividend then if you do not reinvest all you have is 9k being compounded on ...if markets soar the next day and shoot up 10% then you have 9k invested going up 10% and a 1 k dividend in pocket .

If you reinvest you have the exact same 10k only more shares at the reduced price at the bell and now the 10k goes up 10%

If the stock did not pay the dividend then you would have the same 10k only less shares at a higher price since it would not be reduced for a payout .

This is always , it is. Mandatory
 
Last edited:
rkunsaw said:
But when the next dividend payout comes I'll get paid for more shares.
Click to expand...
It is all about your total return because all growth is on dollars invested not number of shares ...whether you have 10k in 1000 shares at 10 dollars or 10k in 5000 shares worth 2 dollars a 10% gain is the same ..

Just imagine. I give you back 100 bucks from your investment and I subtract 100 bucks off the value ... you give me back the 100 bucks and I buy you back 100 bucks worth of stock but Based on the reduced value.....in the end you have back what you had only now it consists of more shares at a lower value because we bought back the same dollars at a lower price ....but you have nothing additional...if it goes up 10% it is the same dollars whether we left things alone or whether we did our little deal .


If you did not give me back the 100 bucks but kept it that 10% gain is on a balance 100 bucks less

Maybe people can see it better this way ...because the above is exactly how stocks ,funds and etfs all work

Dividends are always a return of your invested dollars and they are always subtracted off the value you have left ...always. There is no magical money that appears .


A 4% dividend is no different than pulling the same dollars from a portfolio of non div payers assuming the same total return
 
Last edited:
mathjak107 said:
in fact whether one sells or not your draw rate in retirement is based on portfolio value
Click to expand...
You are assuming I'm drawing from my funds. I am not. I'm living on my pension and SS and don't need to draw from my investments at this time. I'm trying to make them grow so I'll have more if I do need to start taking out rather than putting in

There was a time when retires could play it safe with their money with CD's and such, but no more. I think dividend stocks ( in quality companies) are the best way for people my age.
 
rkunsaw said:
You are assuming I'm drawing from my funds. I am not. I'm living on my pension and SS and don't need to draw from my investments at this time. I'm trying to make them grow so I'll have more if I do need to start taking out rather than putting in

There was a time when retires could play it safe with their money with CD's and such, but no more. I think dividend stocks ( in quality companies) are the best way for people my age.
Click to expand...
Who cares what you do ...this is standard retirement 101 whether you do it or not ... all safe withdrawal rates are based on Portfolio value....your net worth is based on portfolio value ,,, your estate taxes if any are based on portfolio value , an asset based loan is based on portfolio value ....the fact you may not care certainly does not make the statement it only counts if one sells true
 
Last edited:
rkunsaw said:
If and when I get ready to start drawing then of course I'll care what the value of my portfolio is.

Reinvesting is Buying, Drawing is Selling. Buy Low Sell High.
Click to expand...
Well that is what I am saying ,you don’t care right now but to say it only matters if you sell as a statement is bull... that value always matters , not caring is something else
 
Just so every one knows the different terminology

the record date is when the fund or company looks at the record to see who gets a dividend ..anyone buying on or after the record date does not get the dividend.

the ex dividend date is usually two days prior to the record date ...that is the date the amount of what will be paid out is subtracted off the share price ..anyone buying from the record date on gets the reduced price but no dividend . So basically for every dollar they hand Or will hand you they reduce your remaining dollars by the same amount before the investment can trade again .

the payout date is the date the dividend is credited ..if it is reinvested then it is reinvested at the price that day , it could be more or it could be less .

most mutual funds go ex div and payout the same day so when you wake up in the morning you have more shares , a lower share price and the same dollars working for you as you had when you went to sleep ...you just have more shares because they were bought after the price was knocked down but they still add up to what you had prior.. if you did not reinvest then you have the same shares at a price that was reduced by the amount you were paid out ...you would have less dollars compounding if you did not reinvest then you had prior
 
Last edited:
mathjak107 said:
Mutual funds are identical ...for every dollar they give you the share price is reset back ..Except mutual fund bond funds . Etf bond funds do drop the same though as stock etfs.
Mutual fund bond funds keep the interest on the side crediting the owner daily ....it does not get calculated in to the share price like etfs and stocks .

There is no exceptions ..

You need to look at the ex div. dates. And then the pay dates ..

One of my etfs went ex div last week ...the share price dropped by as much as they WILL pay out .. but we don’t get paid and reinvested until 12/26 ...

Only mutual fund bond funds work differently not etf bond funds, mutual funds ,stocks or etf stock funds

But for purposes of discussions it is easiest to understand from a next day perspective..

So once a stock or fund goes ex div whatever is paid out is subtracted off your value before the stock or fund can trade .....if you had 10k and got a 1k dividend then if you do not reinvest all you have is 9k being compounded on ...if markets soar the next day and shoot up 10% then you have 9k invested going up 10% and a 1 k dividend in pocket .

If you reinvest you have the exact same 10k only more shares at the reduced price at the bell and now the 10k goes up 10%

If the stock did not pay the dividend then you would have the same 10k only less shares at a higher price since it would not be reduced for a payout .

This is always , it is. Mandatory
Click to expand...
You are incorrect. There obviously are some exceptions. Your claims cannot change what's in black and white. And as I already acknowledged, funds will fluctuate anyway. Ex dividend and pay dates have already passed on all the examples I gave you MJ. Schwab does a very good job of letting investors know what the ex dividend and pay dates. I also found the information on estimated distribution sheets for each investment. I'm still waiting to see how many shares will be purchased for one of the ETFs, which has the longest span between the Ex and payout date and is the only one of my investments that hasn't paid out yet. But I already know how much the per share dividend will be.
 
fmdog44 said:
Never have I trusted the group known as "financial advisors". I was aggressive in my own picks in my early 30's winning some and losing others coming out ahead. The biggest lesson I learned throughout the years was hanging on to a very successful mutual fund when the 2008-9 crack happened. The second lesson I learned (the hard way) was investing in a emotional favorite. In my silver years I invested in many dividend stocks and they have been good to my needs and expectations. Fortunately, I don't need to invest to earn money anymore but I am hooked on watching the markets. I watched them long before I had any money to invest as my dad got me interested, thankfully.
Click to expand...
That's great Frmdog44. As I've said in the past, the two times I followed financial experts' picks, I lost money. I do way better on my own. Like you, I didn't panic in the 2008 crash. I'm in it for the long haul. Like the old Excedrin commercial said "When something works...that's what you use". I still invest because don't know what else I'd do with it...except I'm in the process of searching for what I'd like for new flooring throughout the apartment and to remodel my kitchen. I vacation whenever I want, not much left to buy except food and I want to make sure I have enough to cover exorbitant N.J. nursing home fees if needed. I'm hooked on watching the markets too as well as reading financial and retirement articles.
 
OneEyedDiva said:
You are incorrect. There obviously are some exceptions. Your claims cannot change what's in black and white. And as I already acknowledged, funds will fluctuate anyway. Ex dividend and pay dates have already passed on all the examples I gave you MJ. Schwab does a very good job of letting investors know what the ex dividend and pay dates. I also found the information on estimated distribution sheets for each investment. I'm still waiting to see how many shares will be purchased for one of the ETFs, which has the longest span between the Ex and payout date and is the only one of my investments that hasn't paid out yet. But I already know how much the per share dividend will be.
Click to expand...

it has nothing to do with fund fluctuations, market action or anything else .. there is always , yes alway a mandatory reduction in the value of your investment by the same amount as is paid —-period .. Unless it is a bond mutual fund it is impossible to not have an offset in price , it is mandatory. but in any case this the only way it can work whether you think so or not So tell us which fund has no reduction in price going ex div like you say , tell us which fund you claim is exempt ....

Don’t forget a stock can go ex div and drop by a lot , and market action can make it higher then before . But even if markets went up 100% the next day it is 100% on an a lower opening balance than had it been up 100% on the price before it went ex div
 
Last edited:
My IRA posted the year end dividends today, and it was a nice year end "bonus". I think it was just about this time last year when the markets tanked and it took weeks/months to recover. I keep watching for another "correction", which appears to be quite overdue, and I wonder how long this market can keep advancing. When, not if, the next downturn arrives, I suspect it will be quite severe.
 


Back
Top