Working on a dividend investing book and wondering if folk would like to help

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Regular Contributor

This book will be free to all USAA members PERIOD!

 

Just an FYI, this is my third attempt at writing this book and why I'm asking for input. Outside of USAA I pull in $653 currently per month via my investments and keep growing every other month just about $20+. The reason I had to go outside of USAA is simply due to the execution cost. USAA charges $8.95 (or something like that) and E*Trade charges $6.95, which is a big deal when the market only trades by a few cents every day differential per stock. The only reason I haven't moved over to Charles Schwab is because I'm very familiar with the Option House platform that E*Trade absorbed.

 

This note is for whom ever USAA staff member that monitors this area: how much data can I place here in posts and what type of data can be handled? I use OpenOffice for my spread sheets and text, which I believe are *.odt and *.ods formats.

 

Thank you all for your time and I look forward to hearing your input. =+}

 

10 REPLIES

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@cheawick, thank you for reaching out to us.  I've sent your inquiry to a colleague in our Advice and Solutions group to provide the help and guidance you're looking for. Please know they are currently out of the office at the moment, but will have the request first thing in the morning. I hope you have a great night.

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Thank you, I really want to create something that will give all USAA members rocket fuel for retiring well.

No need to reply back, I'm considering linking a barely used Live Journal site here to perhaps avoid any data issues. =+}

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I've decided to change the format of the book and hope the following intro and Rule presentation will give folk an idea of where I'm going with this:

 

Modest Investing In Americas Stock Market

 

By: Chris Seruntine.

 

Begin date: 4/18/19

 

Investing into stocks is normally not something that comes across the minds of those of us who are barely making ends meet, but it is a very important concept to embrace for building future funds.

 

Notice that I did not mention wealth. We are the folk that normally don't have a large cash flow to play with so we tend to hoard (if you can call it hoarding) our money in savings. Yes it pays better interest than checking accounts in most cases, but our money still languishes there with rotten returns.

We all have heard (or should have if you have access to a TV) the name of Warren Buffet, for example as a wealthy investor, but think that he's one of them silver spoon Wall Street freaks that we could never emulate in a million years. Partially true, but we also don't have to follow his money to start creating our own investment plans.

 

Lesser income earners like us must implement some creative thinking plans to try the attempt to gain access to this alien stock market thing. No, it's not easy at all to be blunt. There's going to be a will power battle that you and your family will have to face with each other, but YES it can be done. Should you be single then it's just a personal will power thing you have to deal with.

 

I'm sure I'll be questioned about the title so let me address that now; the American stock market is the easiest for me to trade in and understand, not to mention that there are less tax issues to deal with concerning foreign investments. I like to keep it simple, but there are times when offshore investments make sense, I'll cover those when the topic of Emerging Markets is approached. One last tidbit of advice, don't invest in MLP or LP stocks, you will face the dreaded K-1 multi tax documentation form that will require you to hire a firm that understands how to put info in place on your tax forms.

 

The following format of: Rule #, Step #, and Suggestion(s) will follow topics that I delve into. A Rule is what needs to be done (Rule # advances with each Topic to avoid confusion), a Step is how to satisfy a rule, and a Suggestion lists ways to accomplish a step. As long as the Rule # is satisfied you can safely proceed to the next topic.

So why do I believe this book will be a win? Simply because I payed my dues of failure and learning. I've paid several thousands of dollars of investing schools and online support stuff. Yes they did help me understand some points of interest better, but it was not money well spent in my opinion. Most investing information that is actually useful can be obtained online for free if you know what you're looking for in my opinion.

 

This is why I'm writing this, I'd like to save others from the losses and expenses that I had to suffer through. Just like we humans need to work for our money, we must insist that our money works for us.

With out further hesitation I present the first topic...

Topic: Acknowledge your financial requirements


Rule #1

 

Save enough money to get you through three months of unemployment.

 

Step #1

 

Sit down and go through your expenses over the last three years, find the most expensive bills for summer and winter and use them as guidance. You never know when you may become unemployed, so you want to plan for the worst, hopefully this will never happen.

 

Suggestion:

 

I would also advise that you consider saving some additional money for repairs and replacement of appliances and vehicle problems. Research the most expensive items and plan to save for that as a replacement, this will almost ensure you saved enough to cover everything else in your emergency budget. Also save separately for your vehicle repair as it can conk out at the same time as an appliance. At a bare minimum, you should have $3K in savings as a single person, a family with a child should have $7K in savings AT A MINIMUM!!!

 

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Topic: Understanding the burden of Market research (and it is a heavy one)

 

Rule #2

 

Be patient, research stocks that pay out dividends, and build up the amount of money you will need to invest. You also need to research a brokerage trade firm and their fees. I use E*Trade for full disclosure and they charge $6.95 per trade currently. I also use USAA strictly for Roth IRA stock buys as they charge $8.95 per trade and also charge a penalty assessment fee for selling stocks, a real bummer when you find a more efficient dividend to cost ratio and want to free up your money to buy. (I may have to break this down further to avoid reader burnout).

 

EDIT: I just got a letter from USAA announcing that they are partnering with Charles Schwab and rates are going to change as well as market access, so I may have to entirely re-write this section, but this will not roll out until an unspecified time in 2020.

 

Step #1

 

If you have never looked into the stock market your first duty is to open up your web browser and enter in your address bar:www.yahoo.com/finance

Next you need to click that “Search for news, symbols or companies” bar near the top middle of your screen and type in ACP then hit enter.

 

You should see some information about Aberdeen Income Credit Strategies Fund (ACP) with a chart. As of the moment I'm typing this I see the current stock value is $12.38 per share and that the value of the stock declined from the morning open of $12.60 to close at $12.39. But to learn more about the stock we need to do some modifications to what the website presents us.

 

Look just below the stock name and the big current price and you'll see some tabs, one that is currently highlighted is named Summary. You want to click the Chart tab, you should see a default roughly 6 month chart that has a letter “D” in a dark gray box at the bottom of the chart. When you hover your mouse over those you will see that a Dividend of $0.12 was payed on whatever date. You also want to note the occurrence of those Dividend payments, look at the bottom of the chart and try to determine if those payments are nearly monthly or quarterly and consistent. Since the assumption is that you are new to investing, you want to make sure that the stock has not reduced its dividend payout over the course of a year.

 

Personally I have not invested in this stock, the only reason I'm using this as an example is simply because it is the first stock listed alphabetically on my watch list.

 

Now why haven't I invested in this stock? Easy answer, hover your mouse over those gray block letter D's and look at the value of the stock. This is an inefficient reinvestment stock to me. Here's a hint: the effective investment loss is 39 cents per share. Here's the math: the stock closed at $12.39, the Div is $12, so this is not a positive reinvestment. Hey wait, where did $.12 become $12??? Stay tuned, I'll get into the spread sheet formulas fairly soon.

 

Don't get comfortable yet, this Step is a long one that really needs to be understood! Remember that you're researching this stock currently and need to get a better understanding of it. First thing we need to do is get rid of that line graph and replace it with “Candle” representation. To do this look just below the earlier tabs and click the “toggle” about mid right labeled “Line” and in the drop down menu select “Candle.”

 

The reason we want to view the Candle representation is to understand how the stock performed each day indicated by the green and red bars. Green bars indicate that the stock gained value and red bars indicate that the stock lost value compared to the value of the opening of the trade session to the close of trade at the end of the day.

 

You should also note at the very bottom of the chart that there are varying heights of green and red bars, these bars are very important as they relate to how to read the “Candles” (which I will now refer generically to as simply candles). These daily bars are referred to as volume indicators. Volume is VERY important, as it can indicate a breakout build or a sudden bust for a stock. Heavy volume trading with a candle symbol that looks like a “+” sign is an indicator that something is about to happen with the stock, so you need to do more research and keep tabs on current news of whats going on with the stock. The technical term for this “+” sign is a doji symbol. For reference: https://en.wikipedia.org/wiki/Doji

 

You are also going to want to sign up at www.tradingview.comfor more real time stock quote information. It's free and I've not detected any malware incoming from the site.

 

Suggestion:

 

To make things easier you really want to have two computers side by side as we progress this kind of setup, it will help you sort out what's going on with your accounts and analyze whats going on with the stock market. To be honest, I have five computers that I utilize for research and buy/sell execution.

 

 

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Topic: Understanding the burden of Market research (and it is a heavy one)

 

Rule #2

 

Be patient, research stocks that pay out dividends, and build up the amount of money you will need to invest. You also need to research a brokerage trade firm and their fees. I use E*Trade for full disclosure and they charge $6.95 per trade currently. I also use USAA strictly for Roth IRA stock buys as they charge $8.95 per trade and also charge a penalty assessment fee for selling stocks, a real bummer when you find a more efficient dividend to cost ratio and want to free up your money to buy. (I may have to break this down further to avoid reader burnout).

 

EDIT: I just got a letter from USAA announcing that they are partnering with Charles Schwab and rates are going to change as well as market access, so I may have to entirely re-write this section, but this change will not roll out until an unspecified time in 2020. The execution fee for Schwab is $4.95, I greatly welcome this move by USAA if it means I can try out the tools and platforms available.

 

Step #1

 

If you have never looked into the stock market your first duty is to open up your web browser and enter in your address bar: xxxxxxxx

Next you need to click that “Search for news, symbols or companies” bar near the top middle of your screen and type in ACP then hit enter.

 

You should see some information about Aberdeen Income Credit Strategies Fund (ACP) with a chart. As of the moment I'm typing this I see the current stock value is $12.38 per share and that the value of the stock declined from the morning open of $12.60 to close at $12.39. But to learn more about the stock we need to do some modifications to what the website presents us.

 

Look just below the stock name and the big current price and you'll see some tabs, one that is currently highlighted is named Summary. You want to click the Chart tab, you should see a default roughly 6 month chart that has a letter “D” in a dark gray box at the bottom of the chart. When you hover your mouse over those you will see that a Dividend of $0.12 was payed on whatever date. You also want to note the occurrence of those Dividend payments, look at the bottom of the chart and try to determine if those payments are nearly monthly or quarterly and consistent. Since the assumption is that you are new to investing, you want to make sure that the stock has not reduced its dividend payout over the course of a year.

 

Personally I have not invested in this stock, the only reason I'm using this as an example is simply because it is the first stock listed alphabetically on my watch list.

 

Now why haven't I invested in this stock? Easy answer, hover your mouse over those gray block letter D's and look at the value of the stock. This is an inefficient reinvestment stock to me. Here's a hint: the effective investment loss is 39 cents per share. Here's the math: the stock closed at $12.39, the Div is $12, so this is not a positive reinvestment. Hey wait, where did $.12 become $12??? Stay tuned, I'll get into the spread sheet formulas fairly soon.

 

Don't get comfortable yet, this Step is a long one that really needs to be understood! Remember that you're researching this stock currently and need to get a better understanding of it. First thing we need to do is get rid of that line graph and replace it with “Candle” representation. To do this look just below the earlier tabs and click the “toggle” about mid right labeled “Line” and in the drop down menu select “Candle.”

 

The reason we want to view the Candle representation is to understand how the stock performed each day indicated by the green and red bars. Green bars indicate that the stock gained value and red bars indicate that the stock lost value compared to the value of the opening of the trade session to the close of trade at the end of the day.

 

You should also note at the very bottom of the chart that there are varying heights of green and red bars, these bars are very important as they relate to how to read the “Candles” (which I will now refer generically to as simply candles). These daily bars are referred to as volume indicators. Volume is VERY important, as it can indicate a breakout build or a sudden bust for a stock. Heavy volume trading with a candle symbol that looks like a “+” sign is an indicator that something is about to happen with the stock, so you need to do more research and keep tabs on current news of whats going on with the stock. The technical term for this “+” sign is a doji symbol. For reference: xxxxxxxxxxx

 

You are also going to want to sign up at xxxxxxx   for more real time stock quote information. It's free and I've not detected any malware incoming from the site.

 

Suggestion:

 

To make things easier you really want to have two computers side by side as we progress into this kind of setup, it will help you sort out what's going on with your accounts and analyze whats going on with the stock market. To be honest, I have five computers that I utilize for research and buy/sell execution.

 

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@cheawick, you would need to create a new post; we are able to hide this post if needed.  However, please note that we do not allow any link to external pages.  This will cause your post to be hidden or modified to remove external links posted. 

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Yes, please remove the post, sorry work has been insane lately... I did post a link this time due to character limit, perhaps that helps???

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So that really misses the point here, please note that if all external links are prohibited, then why am I trying to inform everone of resource gathering? I can't believe that USAA wants their customers to remian ignorant of facts. Data is always changing, stratigies are also always changing. If I can't post links and data resources here, then why should I bother?

 

This is not directed at anyone personally, but think of the time and money I spend to develope these documents. AND I'M DOING THIS FOR FREE!!!

 

My belief is that when all of America succeedes then so do I. Did USAA forget this concept?

 

If this is the case, please delete all my posts, and I will never post again here.

 

Simple enough solution I think.

 

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I was hoping to replace this post with the updated one but I currently don't see a way to remove it, any help moderators?