Polliesdividend

Lesson Learned

If you want to get rich very fast, stay away from stocks and the stock market. Buying stocks is investing for the future. But which stocks do you have to buy?

You have to start investing with money you do not need. If there is a possibility that you need that money in a couple of years, stay away from stocks. Investing in stocks is for the long run. Of course if you happen to have sure information about a stock of which the price is going to rise buy it.

Most of the biggest investors buy their stocks and hold them for many years. Look at Warren Buffett and his stake in Coca Cola (KO) for instance. Those investors will not be upset if the stock market declines. And then rise again.

They do not waste time by trying to exactly timing the market when they want to buy a stock. It is almost impossible (understatement πŸ˜‰ ) to exactly time the market to always buy at the bottom and sell at the top. Even for professional investors. So why put all effort in as a normal investor!

This is one of the lessons I already knew, but learned again in 2014. In September of 2014 I did my research of Chevron (CVX). I calculated that the good price to buy CVX was approx.$ 99. In October/November oil prices went down very quickly. And yes I was getting excited! The price for CVX went down to around $ 100. At that time I was shifting some of my capital to my broker account. Yes I wanted to buy CVX. This would be a great addition to my Vrijheid Fonds. I was ready for it!

I waited and waited hoping that the price was declining even more. And I was convinced (after reading a lot of news articles) that the bottom was not yet reached. But too bad, the price went up again. I missed out on a great possibility! Grrr 8&^%!

So I missed out to buy 21 stocks of CVX, just because I wanted to pay a slightly lower price. For a lousy $21 dollars, I waited. As you readers know the stock prices went up in December and gone was my opportunity. Because of $21 I did not buy at that time. This is also the amount of dividend in one quarter that CVX is paying. This to put it in perspective.

The lesson from all of this for me is, that if I think a stock is great addition to my portfolio, make a decision and buy it for a reasonable price. And this is not always the best price I have calculated. Because I’m in it for the long run, the actual stock price for dividend stocks is not that important!

P.s. In January 2015 I bought CVX for approx. $109

 

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12 thoughts on “Lesson Learned

  1. roadmap2retire

    Good reminder, Pollie. Ive done this in the past too and every now and then, I get this idea in my head about waiting for a stock to hit a certain point and miss out on it. I like to think that I dont do it anymore, but ended up doing the same thing in October when JNJ fell to $95. I kept waiting for it to get below $93, which would translate to a 3% yield and missed it. Now, I am left with just a small portion in JNJ that I started in 2013.

    R2R

    1. polliesdividend Post author

      Helli R2R,
      I also thought i did mot do it anymore. But when i looked back, I saw it clear
      So it is a good reminder for me. If i want a stock for my portfolio, i do not wait till the exact price there is in my head. I buy stocks for the long run. So the price of a stock is not that important that 1 dollar makes a difference.

      Thanks for taking the time to write a comment.
      Keep up the good work!
      Cheers,
      Pollie

  2. Dividend Diplomats

    Pollies,

    In my latest article regarding my portfolio review and assessment, I also reflect on this and can’t agree more. If it’s a good stock and you want it, buy it and if it drops or goes on sale – buy it again and guess what? Do it again.. and again. It’s supposed to be boring and common sense and that is back to what I’m going to be doing, without a shadow of a doubt. Great post and great lesson!

    -Lanny

    1. polliesdividend Post author

      Hello Lanny,

      We learned the same lesson πŸ˜‰ and came to the same conclusion.
      If it is good stock and you want it, buy it. Do not worry about the exact price. If it drops or goes on sale – buy it again!

      Hopefully 2015 gives us plenty a buying oppertunities!
      Cheers,
      Pollie

  3. M

    Well, I guess you learnt your lesson ‘time IN the market is more important than TIMING the market’.

    I thankfully do not have to worry about this, because I buy my stocks on a set date every month. I do not get a choice, as it is a discount scheme, which means I can buy stocks for Β£1.50 per trade + stamp duty (where applicable).

    It’s not for everyone, but it does help me!

    Cheers

      1. M

        Yes. I automated my investments so I could get the cheap deal, but I am doubly glad as to the outcome, because now I don’t worry about maybe buying a stock at the wrong price. win-win for me.

          1. M

            very very sadly it is not possible here either πŸ™ although you can buy fractional shares in a mutual fund. This is why I try to buy enough shares to achieve at least one whole new share from the dividends. Although, it is easier when the shares are very cheap, like Vodafone, but difficult with more expensive shares, like Royal Dutch Shell.

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