January 25, 2012

Direct Stock Purchase Plans

Most of the biggest companies are also the best performing stocks.  While I'd rather see small investors dollar cost average into a diversified index fund, there are some people who insist on buying individual stocks and there is one solid advantage, virtually no fees at all.

One very under reported way to accumulate shares of your favorite company, $50 or $100 at a time is through Direct Stock Purchase Plans or DRIP's which is simply buying stock directly from the company itself.  Actually you will be getting the shares through what is called a transfer agent who physically handles stock shares.  No middleman.  No brokerage account.  You get your statement from the company.

DRIP actually stands for dividend reinvestment program which is exactly what happens to your dividends automatically, they buy more shares directly from the company.

This is a great way for investors to avoid the brokerage firms which is why you will never hear this from your stockbroker or financial adviser.

Almost every company in the S&P 500 has a DRIP program, Google for the toll free number, call for shareholder services and get started, you can do it online as well for some.

Let me know if you need some help, money coaching available or send me an email.  Happy to help!

January 9, 2012

War Games - The Only Winning Move Is Not To Play

Did you ever see the movie from the early 80's called War Games?  Great movie about a computer geek who hacks into a government computer to play games and ends up playing the government computer called the WOPR a game called Global Thermonuclear War.

Fast forward to the end of the movie and the computer decides ultimately that the only winning move (in a nuclear war) is not to play.

This is a great analogy to trading the stock market.  The only to way to win this game is not to play.  Period.

Do not listen to someone who tells you that you can trade for a living or increase your returns by trading, by buying this and selling that.  Its a losing proposition.

The only rational and logical approach to the stock market is to invest, that is to buy the indexes, not to trade.

This approach will land you in the top 10% of all participants in the market!