I feel that this site is a good place to communicate and maybe even to some extent work through an investment plan I intend to execute for a Beneficiary IRA I have recently opened. This strategy is not advice, merely a transparent view as to what I intend to do; others in similar situations can do as they wish with this information. Readers are encouraged to review my investment strategy primer by clicking "Investment Notes" at http://www.foothill.edu/bss/people/moglen-david/index.php.
There are many sites from which one can draw up watchlists. Stock picks can be tracked at sites like yahoo finance or Google finance, but since I have a regular investment account at Sharebuilder.com, I like the simplicity and some other aspects of keeping watchlists there. When I frequently log in to view my watchlists, which I feel should be constructed well before buying any shares, what I am skimming the list for is any stock that has moved up or down by more than two percent, or at least moved more than 1.5%. Any daily variance less than that is probably just noise.
For the Beneficiary IRA I took the extra step of listing potential targets (all of which are already on my Sharebuilder watchlists) into an excel spreadsheet with the following columns: Ticker Symbol, Dividend Yield, Cash per share (as a %), PE Ratio, and Payout Ratio. All of these are easily available to the public even without starting an account at Sharebuilder and other investment sites.
Next I want to divide targets into (up to) five buckets, which I call A, B, C, D, and E. Bucket A is the best - high dividend and stable at a reasonable price on a PE ratio basis. There are two clear Bucket A stocks for me so far, AT&T and Verizon. Bucket B would be incrementally less ideal; most likely, based on the "blue chip" or "dividend aristocrat" large-cap and mega-cap selections I'm targeting, the shortcoming of groups B, C, D, etc. are lower yields than AT&T, and then possibly other worse metrics in other excel columns specified.
I would like to see a market pullback (which we may get around mid-to-late February or early March based on debt ceiling wrangling in DC) but whether we get one or not, at some point I have to start a position in some stocks. Here is the opening allocation. Note that everything I want to buy is not bought on the same day or in the same week. I will stagger purchase dates through several months in 2014, maybe even across the majority of the year's 12 months, for opening positions in each stock. But at some point, here is the opening allocation: Group A stocks: $500. Group B stocks: $450. Group C stocks: $400. Group D stocks: $350. Group E stocks: $300.
Scaling: when any of these solid, well-established dividend paying large- and mega-cap stocks falls 8% to 15% (the higher end of this range is for markets or securities subject to greater volatility) then I will add to that position in an amount that is $50-$150 greater than my initial buy-in for that stock. For example, let's say it was a group C stock with $400 initially bought. Whether this second buy is more like an additional $550 in shares or just $450 more in the position depends how much conviction you have about the firm's prospects. All of the scaling (buying more as it went down) is dependent on the underlying "thesis" - strength of the company - having not changed materially. In other words, it is not at apparent risk of imminent bankruptcy. This should be the case for all firms being considered (I don't think Cisco or Phizer are going bankrupt in the near future, if ever) but it is a caveat worth mentioning.
If a stock, especially one in the A or B categories, has gone up only a little (less than 10%) then I would probably buy an additional round of their shares the same as I was for those that had gone down (traditional scaling). If it had gone up more than 10%, I would have to be extremely confident in further price gains and/or dividend increases to buy more. In keeping with all this, I would probably buy a second $500 round of some or all "A" stocks within six months if they have not skyrocketed unnaturally.
This is a good start to understand my main intended strategy. A smaller, much riskier portion may involve buying a handful of mortgage REITs (mREITs) but doing so requires much more of investors - more frequent and thorough research on the sector, a strong stomach for the price roller coaster, more frequent (preferably daily) monitoring, and occasional use of stop-limit orders when price drops (capital loss) are too much to stomach. This portion of the portfolio defines reaching for dividend yield, which conventional advice says to never do, but I feel for my portfolio I can reach for a certain amount of steroidal dividend yield at the cost of more likely and more extensive capital loss as long as I take the stated actions to respect the substantial risk as I go in. As mentioned, the majority strategy (everything stated before this paragraph) constitutes what I believe is a responsible approach to my Beneficiary IRA.
Let me know what you think. I'm interested in ideas or comments. It should be an interesting ride.
Tuesday, December 24, 2013
Thursday, April 25, 2013
Goldman Sachs Invests in Motif Investing
I saw this really interesting article in the DealBook Section of the New York Times online:
Goldman Invests in Upstart Online Broker Primarily it goes into the investment Wall Street standard-bearer Goldman Sachs made into Motif Investing. This supports not only what I wrote in the previous post, that this is the democratization of the mutual fund industry, and even moreso that those in the know view it as the future of the mutual fund industry, or at the very least a promising direction for the industry's future. The article also gets into some of the startup's board members, which include former SEC Chairman Arthur Levitt. This fact bodes well for their legal sustainability. The final detail in the article goes to the sites plans for monetization for user-created funds, which I think is very strategically being referred to as a "royalty" structure: "In February, the company began allowing investors to create their own portfolios from scratch, and said those investors would eventually be eligible for royalties if others wanted to buy their themed portfolios."
Food for thought, no doubt.
Monday, April 1, 2013
The Democratization of the Mutual Fund Industry
While the verdict is still out on how Motif Investing (as described in the last two posts) will be, my preliminary assessment is that this could well be the democratization of the mutual fund industry. When I consider the possibility of putting together several Motifs, theme-based funds, with very little investment, let alone a promotional offer that covers trading expenses if you follow the promo's requirements, it looks like an opening to the world of diversified and informed fund investment for both the original fund creator such as myself and the retail investor.
Thursday, March 28, 2013
Fund Update and Details on the $50 Promo Offer
At the end of this email, you can see the full "fine print" details of the $50 promotional offer mentioned in my last post. While I recommend you read it, and as you saw in my last post here, a very useful customer service email service@motifinvesting.com is provided should you have any questions for Motif Investing, I will lay out the main "fine print" stipulations now: to receive the $50, one must create a new account by following the directions in the email from me. If you did not receive this email inviting you to Motif, or even if you did get it but would like to get it again, please email me and request the Motif invite email at davidmoglen@hotmail.com. Within ten days of opening the new account, one must have it successfully funded with the $1000 minimum needed to qualify for the $50 promotional bonus, and the money must be left in the account for 45 days to keep the $50. After 45 days, if you no longer want an account, you can request a check or bank transfer for free for all the money back plus their free $50 at that point. The other key stipulations are these two: one, you must make at least one trade, and two, you must have cookies enabled in your browser settings.
To the first point, I would recommend buying a Motif, meaning either a fund I created or one of the many you can find with great themes (I will be giving my favorite Motifs -theme based funds- that they created in a post here in the near future) by clicking on search Motifs. The minimum investment is $250, so you could keep the other $750 of your $1000 account funding as cash in the account, and get your $250 investment, your initial cash remaining from what you put in to fund the account($1000-$250=) $750, and the $50 promotional cash all back if you wanted after leaving it in for at least 45 days. Of course, I would hope most people would look at this as a platform for long-term investments, but if people just want to cash out their free $50 ASAP then that is their right. Regarding the second point, cookies, I would recommend clicking on your browser options and make sure anything saying cookies is enabled, not disabled, because if they can not track the new account registration from you accepting the invite in my email (again, email me at davidmoglen@hotmail.com if you do not have this invite email) then they do not honor the promotional offer. You can always email their support at service@motifinvesting.com if you need any assistance making sure you've fulfilled their requirements on this promo.
I welcome everyone's input on topics such as ideal holdings in funds to be created in the future. I can tell you the top Motif themes that I plan to make are as follows (#1 is the one already created, as my invite email already mentioned):
1. Ultra High Dividend Fund
2. Ultra High Dividend Diversified Fund
3. Ultra High Dividend Focused Fund
4. Content is King Fund
5. Lagging the Rally Fund
6. Social Responsibility Fund
#1, also known as the "Don't Fight the Fed" Fund, is laid out in the fund description in the previous posting on this site. The Diversified version (#2) would take the same theme but add more holdings along the same criteria in each sub-category. This would be good for those who like the idea of the Ultra High Dividend Fund but are seeking a step change in terms of less risk and more diversity. Those who would like to move in the opposite direction might prefer (#3) the Focused version of the Ultra High Dividend Fund fund, as it would do the opposite of #2 and actually reduce the number of holdings, cutting away the more conservative dividend plays, and just going full-bore for the extremely high-yielding REITS, especially mortgage REITS, and even find some more of these further out on the risk-return spectrum to target even more enhanced yield within this sub-category.
#4 plays on the idea that Content is King, meaning firms such as CBS who make entertainment content are doing very well in this era when conventional and new digital and mobile channels are competing for their output. #5 describes a fund that would look for value stocks that have not participated much in the recent market runup, on the theory that they will catch up over time. My final idea at this time, #6, would assemble firms that had proven themselves responsible corporate citizens. To reiterate, I am seeking input on these or other investing ideas you may have, and when any new funds are created you will get the email like you did with #1, and if you did not get that invite email already please let me know at davidmoglen@hotmail.com.
Thanks and let me know if you have any questions.
THE FINE PRINT ON THE $50 PROMOTIONAL OFFER:
Invite your friends to Motif, and you'll both earn $50.
It's our way of saying thank you to you both.
Now, you can spread the word about Motif, and get rewarded for it. Here's how it works:
You invite a friend to join Motif--as many as you like.
Your friend opens a Motif trading account, and places a motif trade.
You'll receive a $50 Amazon gift certificate, and your friend will get $50 too.
It's a smart, easy way to do something nice for a friend - and for yourself. Invite your friends now.
See program details below for more information.
Contact Us
1-855-58-MOTIF (66843), 9am - 6pm ET, Mon - Fri
service@motifinvesting.com
Share
You will receive $50 for each friend you refer that opens a new Motif Investing non-retirement account, funds it with at least $1,000 and executes one motif trade. To ensure you receive the offer, each friend must use the link in your Motif invite via email or Facebook to open their accounts. The link creates a unique electronic cookie as an identifier. Therefore, your friend's cookie setting must be enabled. Your friend's new funds must be posted to their new account within 10 calendar days of account opening, and must remain in the account for 45 calendar days. Once your friend's first motif trade is executed, you and your friend will each receive a $50 credit to your Motif Investing non-retirement accounts -- or a $50 Amazon gift certificate via email if you, as the referrer, don't have a Motif Investing non-retirement account -- within 30 calendar days after the end of the 45-calendar-day period is complete.
For your referral to quality for the offer, you and your friend must not reside at the same address. Only one friend referral and $50 bonus per address is eligible. Your friend cannot be an existing Motif member or trading account holder.
Commission fees are not reimbursable as part of this offer. This offer is not valid for retirement accounts, such as IRAs, and cannot be combined with any other offers from Motif Investing, and is not transferrable. Limit one account bonus per referred household. Motif Investing reserves the right to terminate this offer at any time and to refuse or recover any promotion award if, in Motif Investing's sole opinion, it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, or that any terms of the Account Agreement have been violated. This offer is not applicable to associates or affiliated associates (including contractors, interns, and temporary employees) of Motif Investing and their immediate family members. You and your friends must meet requirements for applying for, establishing, and maintaining a Motif Investing trading account in good standing, in order to participate. Offer valid for residents of the U.S. and must be at least 18 years of age to be eligible.
Standard pricing: $9.95 total commission per motif. Commission of $4.95 applies to any subsequent stock trade. Other fees may apply. For details on fees and commissions, please click here.
You've received this message because you've registered for Motif Investing. If you no longer wish to receive tips and offer emails from us, please update your email preferences.
P.O. Box 3548, Rancho Cordova, CA 95741© 2013 Motif Investing, Inc. All rights reserved. Member: FINRA / SIPC
To the first point, I would recommend buying a Motif, meaning either a fund I created or one of the many you can find with great themes (I will be giving my favorite Motifs -theme based funds- that they created in a post here in the near future) by clicking on search Motifs. The minimum investment is $250, so you could keep the other $750 of your $1000 account funding as cash in the account, and get your $250 investment, your initial cash remaining from what you put in to fund the account($1000-$250=) $750, and the $50 promotional cash all back if you wanted after leaving it in for at least 45 days. Of course, I would hope most people would look at this as a platform for long-term investments, but if people just want to cash out their free $50 ASAP then that is their right. Regarding the second point, cookies, I would recommend clicking on your browser options and make sure anything saying cookies is enabled, not disabled, because if they can not track the new account registration from you accepting the invite in my email (again, email me at davidmoglen@hotmail.com if you do not have this invite email) then they do not honor the promotional offer. You can always email their support at service@motifinvesting.com if you need any assistance making sure you've fulfilled their requirements on this promo.
I welcome everyone's input on topics such as ideal holdings in funds to be created in the future. I can tell you the top Motif themes that I plan to make are as follows (#1 is the one already created, as my invite email already mentioned):
1. Ultra High Dividend Fund
2. Ultra High Dividend Diversified Fund
3. Ultra High Dividend Focused Fund
4. Content is King Fund
5. Lagging the Rally Fund
6. Social Responsibility Fund
#1, also known as the "Don't Fight the Fed" Fund, is laid out in the fund description in the previous posting on this site. The Diversified version (#2) would take the same theme but add more holdings along the same criteria in each sub-category. This would be good for those who like the idea of the Ultra High Dividend Fund but are seeking a step change in terms of less risk and more diversity. Those who would like to move in the opposite direction might prefer (#3) the Focused version of the Ultra High Dividend Fund fund, as it would do the opposite of #2 and actually reduce the number of holdings, cutting away the more conservative dividend plays, and just going full-bore for the extremely high-yielding REITS, especially mortgage REITS, and even find some more of these further out on the risk-return spectrum to target even more enhanced yield within this sub-category.
#4 plays on the idea that Content is King, meaning firms such as CBS who make entertainment content are doing very well in this era when conventional and new digital and mobile channels are competing for their output. #5 describes a fund that would look for value stocks that have not participated much in the recent market runup, on the theory that they will catch up over time. My final idea at this time, #6, would assemble firms that had proven themselves responsible corporate citizens. To reiterate, I am seeking input on these or other investing ideas you may have, and when any new funds are created you will get the email like you did with #1, and if you did not get that invite email already please let me know at davidmoglen@hotmail.com.
Thanks and let me know if you have any questions.
THE FINE PRINT ON THE $50 PROMOTIONAL OFFER:
Invite your friends to Motif, and you'll both earn $50.
It's our way of saying thank you to you both.
Now, you can spread the word about Motif, and get rewarded for it. Here's how it works:
You invite a friend to join Motif--as many as you like.
Your friend opens a Motif trading account, and places a motif trade.
You'll receive a $50 Amazon gift certificate, and your friend will get $50 too.
It's a smart, easy way to do something nice for a friend - and for yourself. Invite your friends now.
See program details below for more information.
Contact Us
1-855-58-MOTIF (66843), 9am - 6pm ET, Mon - Fri
service@motifinvesting.com
Share
You will receive $50 for each friend you refer that opens a new Motif Investing non-retirement account, funds it with at least $1,000 and executes one motif trade. To ensure you receive the offer, each friend must use the link in your Motif invite via email or Facebook to open their accounts. The link creates a unique electronic cookie as an identifier. Therefore, your friend's cookie setting must be enabled. Your friend's new funds must be posted to their new account within 10 calendar days of account opening, and must remain in the account for 45 calendar days. Once your friend's first motif trade is executed, you and your friend will each receive a $50 credit to your Motif Investing non-retirement accounts -- or a $50 Amazon gift certificate via email if you, as the referrer, don't have a Motif Investing non-retirement account -- within 30 calendar days after the end of the 45-calendar-day period is complete.
For your referral to quality for the offer, you and your friend must not reside at the same address. Only one friend referral and $50 bonus per address is eligible. Your friend cannot be an existing Motif member or trading account holder.
Commission fees are not reimbursable as part of this offer. This offer is not valid for retirement accounts, such as IRAs, and cannot be combined with any other offers from Motif Investing, and is not transferrable. Limit one account bonus per referred household. Motif Investing reserves the right to terminate this offer at any time and to refuse or recover any promotion award if, in Motif Investing's sole opinion, it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, or that any terms of the Account Agreement have been violated. This offer is not applicable to associates or affiliated associates (including contractors, interns, and temporary employees) of Motif Investing and their immediate family members. You and your friends must meet requirements for applying for, establishing, and maintaining a Motif Investing trading account in good standing, in order to participate. Offer valid for residents of the U.S. and must be at least 18 years of age to be eligible.
Standard pricing: $9.95 total commission per motif. Commission of $4.95 applies to any subsequent stock trade. Other fees may apply. For details on fees and commissions, please click here.
You've received this message because you've registered for Motif Investing. If you no longer wish to receive tips and offer emails from us, please update your email preferences.
P.O. Box 3548, Rancho Cordova, CA 95741© 2013 Motif Investing, Inc. All rights reserved. Member: FINRA / SIPC
Thursday, March 21, 2013
The Ultra High-Dividend Fund
Hello Friends,
Would you like to see your savings grow, but are not sure how to get a well-advised portfolio for minimal cost? Are you tired of seeing your savings grow at a near-zero percent rate, and actually lose money when factoring in inflation every year? Several of you receiving this email have asked for my advice in the past, and I have been searching for some way to provide portfolio management services. Now, with the website www.motifinvesting.com, I have found an efficient method to offer my ideal portfolio allocations in the brand new Ultra High-Dividend Fund.
They currently are running a promotion where you can get $50 for opening an account, so you may want to consider getting in on that deal before starting your account. Also I’m getting great responses to all of my questions from their service team, so feel free to email them at service@motifinvesting.com if you have questions about how their site or promotions work.
There is no management fee whatsoever for any funds invested. I plan to provide more information, as well as this initial statement and the below fund description, at my new web site, www.ProgressiveEconomist.com, so feel free to email me with any questions and check in at my web site for updates.
Here is the Fund Description:
The Ultra High-Dividend Fund targets a range of promising securities providing an aggressive total return via dividends and capital gains. This fund features, at one end of the spectrum, companies such as REITs, Private Equity, and pipeline stocks which have proven their ability to pay nearly double-digit (and several above ten percent) dividend yields annually. At the other end of the spectrum, selections have more moderate yields of about four percent combined with greater potential for capital gains through their market leadership, long-term track records, and/or secular growth positioning. All of these yield-based selections are additionally screened for cash-rich balance sheets, mandatory current profitability, and inexpensiveness on price-earnings and price-book bases.
Additional Notes:
This could be described as a “Don’t Fight the Fed” portfolio. In other words, as long as economic conditions remain approximately as they are, this fund should continue to do well and far exceed the performance of the S&P 500. It currently has an overall effective dividend yield of an astounding 10.41% annually, which is paid into the cash account that you get when you register at www.motifinvesting.com. Remember, that annual dividend yield is not counting, but rather it is additional to, any appreciation in capital which is expected to occur for the stocks in this fund. If conditions do change such that I need to change the weightings, I will do so. In such an event, you would get the message from the investing site asking if you want to have my re-weightings copied in your fund, or keep the original weightings. I intend to make changes very rarely if at all, as doing so will incur a $9.95 fee I would have to pay, and, if you did adopt my weighting changes, you as an investor would have to pay that as well. So to reiterate, the allocations are set that such a re-weighting will most likely not need to occur for a period of at least close to two years, and keep in mind that you can always reject the re-weighting by not accepting the offer to replicate the changes, and avoid the fee.
Thank you for considering this investment option. I look forward to hearing any questions or comments you may have.
Sincerely,
David J. Moglen, MA
Would you like to see your savings grow, but are not sure how to get a well-advised portfolio for minimal cost? Are you tired of seeing your savings grow at a near-zero percent rate, and actually lose money when factoring in inflation every year? Several of you receiving this email have asked for my advice in the past, and I have been searching for some way to provide portfolio management services. Now, with the website www.motifinvesting.com, I have found an efficient method to offer my ideal portfolio allocations in the brand new Ultra High-Dividend Fund.
They currently are running a promotion where you can get $50 for opening an account, so you may want to consider getting in on that deal before starting your account. Also I’m getting great responses to all of my questions from their service team, so feel free to email them at service@motifinvesting.com if you have questions about how their site or promotions work.
There is no management fee whatsoever for any funds invested. I plan to provide more information, as well as this initial statement and the below fund description, at my new web site, www.ProgressiveEconomist.com, so feel free to email me with any questions and check in at my web site for updates.
Here is the Fund Description:
The Ultra High-Dividend Fund targets a range of promising securities providing an aggressive total return via dividends and capital gains. This fund features, at one end of the spectrum, companies such as REITs, Private Equity, and pipeline stocks which have proven their ability to pay nearly double-digit (and several above ten percent) dividend yields annually. At the other end of the spectrum, selections have more moderate yields of about four percent combined with greater potential for capital gains through their market leadership, long-term track records, and/or secular growth positioning. All of these yield-based selections are additionally screened for cash-rich balance sheets, mandatory current profitability, and inexpensiveness on price-earnings and price-book bases.
Additional Notes:
This could be described as a “Don’t Fight the Fed” portfolio. In other words, as long as economic conditions remain approximately as they are, this fund should continue to do well and far exceed the performance of the S&P 500. It currently has an overall effective dividend yield of an astounding 10.41% annually, which is paid into the cash account that you get when you register at www.motifinvesting.com. Remember, that annual dividend yield is not counting, but rather it is additional to, any appreciation in capital which is expected to occur for the stocks in this fund. If conditions do change such that I need to change the weightings, I will do so. In such an event, you would get the message from the investing site asking if you want to have my re-weightings copied in your fund, or keep the original weightings. I intend to make changes very rarely if at all, as doing so will incur a $9.95 fee I would have to pay, and, if you did adopt my weighting changes, you as an investor would have to pay that as well. So to reiterate, the allocations are set that such a re-weighting will most likely not need to occur for a period of at least close to two years, and keep in mind that you can always reject the re-weighting by not accepting the offer to replicate the changes, and avoid the fee.
Thank you for considering this investment option. I look forward to hearing any questions or comments you may have.
Sincerely,
David J. Moglen, MA
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