Growing Ones Budgeted Money Supply

Who Do You Listen To

Investment newsletters are the bane of my money-making existence. I have probably subscribed to more periodicals with sensational claims about fantastic returns than anybody. They offer you tantalizing tidbits that promise high returns within a short period of time. You pay a high price for access to their secret power trip.

What these newsletters really are selling is a “shortcut” to knowledge you can eventually obtain for yourself. With a little effort, you can do your own research and find out the exact same things without paying a useless high price for essentially stale revelations that is set forth by them.

One thing I found out is that if a particular investment newsletter pushes a particular stock, and enough readers are convinced, the stock tends to rise in price for the short period of time that it is being promoted. You need to jump on board quickly before the hype subsides and the hot item drifts back down in value.

Expositors Among The Clutter Of Hype

I finally found a newsletter that delivers excellent guesses on what is being promoted. Stock Gumshoe analyzes the data sensationalized by each promoter and arrives at a valid conclusion to determine what it is. You then know what you are getting into before subscribing to a costly periodical. Their mantra is: Secret Teaser Stocks Revealed”!

On the other hand, you can just bypass paying for the hype and go directly to the vaunted recommendation yourself. The problem is, almost all the newsletters that are exposed show recommended investments that are standard, and well established entities.

These endless prognosticators say little about an up and coming contender for high returns with a small amount of cash needed to buy into the stock. With their pics, you need lots of money to generate the dollar figures that they predict for your portfolio.

If you want great advice about a truly viable investment opportunity, you are probably going to have to pay big bucks for that info. After all, the more valuable the inside information, the hungrier the big-ticket investors are to get their hands on it. And that drives price of revealing the hot item way up.

What about Investing In A Recessionary Period

I find that the best gurus to follow are the ones that make money when most others are issuing sell orders on their faulty pics. Or at least their advice is minimizing your losses.

If you follow independent reviews that show the performance of each prognosticator, you can gain some insight. But if the reviewer is advising that the top choices are also being sold on his or her website, the review is next to useless. Flee from that spot on your computer.

Many reviews today are bogus. 5 stars abound whereby the reviewer gives a generic off-the-cuff comment about a place or product. The descriptions easily reveal that the commentator had no direct experience with the item they are talking about. This goes for investment newsletters as well. Beware!

Patience Is A Virtue

My best ever stock recommendation came from my former accountant. I hired him because he was adept at dealing with the IRS. He also advised me to invest in a new pharmaceutical stock that was selling for $3.50 a share.

I had a significant amount of money at the time and bought 7500 shares at that price. After numerous failed choices beforehand, I was very anxious. And also impatient.

The stock kept going up. And up and up. Within a relatively short period of time, the price hit $13 a share. I was excited beyond belief. My investment was worth over $97,000. The sky seemed like the limit.

But then it stalled out and started to drift down. As it approached $10 a share I tried to contact my accountant to ask him what I should do. Should I stay or sell? He was unavailable to be reached for advice.

I initiated a stop-loss order to sell before it drifted much lower. My patience was waning with the current scenario. I did not want to see all my gains wiped out. It sold when the price dropped to $10.

When I was finally able to reach my accountant, he told me “belatedly” that I should not have sold. It was eventually going to rise higher. Too late!

I tried to cover my decision by buying options in the stock hoping for a swift recovery. When it hit $8 a share I was wiped out.

Some years later the stock hit $45 a share. My investment would have been worth over $337,000. My impatience defeated my long-term possibilities.

Beyond The Interest Paid By Savings Accounts

Interest on Certificates of Deposit (CD)or on regular savings accounts is a joke. At 1% or 2%, you are getting virtually nothing. Anything below 5% is a waste of time to even consider.

It seems like you have to risk your money to get a decent rate. You also have to look for hidden gems in the investment world. They are not easy to find and usually require a specified period of time before you get access to your money.

The obvious choice is to find a really great bargain that has a lot of upside potential. One area that I have been interested in is REIT’s (Real Estate Investment Trusts) that lease office buildings back to the Federal Government. The website that gives insight into that type of investment vehicle is Investor.gov provided by The Securities and Exchange Commission.

REIT, or Real Estate Investment Trust, is a company that owns – and typically operates – income-producing real estate or real estate-related assets.  The income-producing real estate assets owned by a REIT may include real assets (e.g., apartment or commercial buildings) or real estate-related debt (e.g., mortgages).  Most REITs specialize in a single type of real estate – for example, apartment communities.  There are retail REITs, office REITs, residential REITs, healthcare REITs and industrial REITs, to name a few. Source: SEC INVESTOR BULLETIN: Publicly Traded REIT’s 12/09/2011

These investment vehicles are required to distribute 90% of their taxable income for each year. This means you are going to get a dividend, even if the share price goes down. Several of them including Easterly Government Properties (DEA) are selling at a discount now. They are an example of an investment that is backed by the full faith and credit of the US government.

Regular dividend payments. Because of the rules by which REITs are established, REITs have to distribute at least 90 percent of their taxable income for the year.  Because REITs often generate income based on the regular rents received on their property holdings, this requirement to distribute income may result in regular dividend payments that income-seeking investors may find attractive. Source: SEC INVESTOR BULLETIN: Publicly Traded REIT’s 8/30/2016

I am only mentioning this as part of the Brainstorming A Budget Plan series is because it is where I plan to invest when the money is available. I can’t afford to lose money anymore, and I want a safe return that provides a decent rate. A good article to read is on the website Seeking Alpha dated September 17th, 2018.

Wrapping Up

I have revealed that I am not a savvy stock market investor. I should instead be making commentaries on cutting cost and saving money. But there is only so far you can go with bad financial advice, spending on money-oriented newsletters, and the returns on a basic savings account.

If you have a large stash of money, you need to manage it well. Budgeting is one thing. Making your money work for you is another. If you don’t keep up with inflation, you obviously are losing ground. Hell, even Social Security gives you a better cost-of-living increase than any bank account or CD (2.8% in 2019).

This article is not to tell you what you should invest in. That is up to you. It talks about what I have done, where I have been, and possible venues for the future. I hope it has been helpful to you. Please leave a comment if it has.

73 comments

Leave a Reply

Your email address will not be published. Required fields are marked *