Part 9 Using Stock as your Vehicle

Stock Market Figures

The argument that security sales people like to use to get people to purchase stocks is true. However that does not mean that it will be successful for you or anyone else.  They claim that the single best place to invest for long term for retirement is in the stock market. They say in the long run stocks outperformed all other investment options by a big margin over almost any time period you choose.  Since 1926, a basket of large-company stocks has shown an average annual gain of more than 10%. Small company stocks which tend to grow faster but with more risk, have produced an average annual gain of nearly 13% since the 1920s.

I know you heard about 1929 where speculators and investors lost their shirts? How about 1989 or 2002? Can you think back to 2008 when people again lost their shirts and most retirement programs turned into “Out House Dirt?” Yes, if you take out the times that the stock market failed to give a good return, they did outperform everyone else.  But the bell does not ring when the stock market drops nor does it care when you should have cashed in for retirement.  

The term “stock” usually refers to Common Stock, which represents an ownership share in a corporation that issued it.  Common Stock may or may not pay a dividend which is from corporate profits. You can look up the stock “on line” and get the stock yield paid out to investors. That is dividing the current annual dividend rate by the share price and you get the stock’s yield. Buying stocks that give high yields is a good way to stay ahead of inflation and greatly increase your return. However keep in mind, stock is speculative. Personally, I stay away from most stocks.

Stock Market Board Room

Let’s look at the six basic Common Stock categories that you may want to consider.

Growth Stocks are so named because they have good prospects for growing faster than the economy or the stock market in general. The risk varies from moderate to high.   

Blue-Chip Stocks are generally industry-leading companies with high financial credentials. They pay decent, steadily rising dividends. They generate some growth or appreciation. They are low to moderate risk securities.  Because of the raising dividends, if you are in your late twenties or thirties, these stocks are good for forming the bases of your retirement portfolio.     

 Income Stocks pay out a much larger portion of their profits in the form of quarterly dividends than do other stocks. They sometime pay out as much as 50% to 100% of their earnings to stock speculators. These stocks tend to be slower growing companies. These high dividends make these shares less risky to speculators.  Accumulation of these dividends into new shares of income stock will give your account a compounding affect.        

Small Company Stocks are typically newer, fast-growing companies. Shares in these companies are riskier than blue-chip or income stocks. They average a higher return than income stocks or blue-chips. Small Company Stocks are more volatile than most other stocks.

Foreign Stocks help diversify your retirement account. The two key benefits of adding an international flavor to your retirement account are diversification and performance. However, you as a speculator opened yourself up to currency risk as well as foreign stock market risk.

Personally, for the most part, I stick with junk bonds for income and income compounding. But that is me and it take all kinds of people to make a market!

        

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.