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Learning to Invest / My Dumbest Investment


Subject:  PBI...Pretty Bad Investment Date:  3/6/2013  10:47 PM
Author:  Wireless4Sound Number:  3647 of 4648

About 18 months ago, I got tired of stuffing mattresses in this low-yield world and began to invest in earnest outside of my 401K and IRA funds. My private wealth advisor at Ameriprise, a knowledgeable and affable man, steered us toward some tax-advantaged, muni bond funds like FRHIX and MDNLX, but I wanted to test the waters of stock investing and decided to call myself a 'dividend investor'. Unfortunately, I hadn't read enough Motley advice before falling prey to chasing high dividend yields like Pitney Bowes (>8% at the time)...and at a nose-bleed price of $19.25/share! Several months later, I ignored the signs of declining revenue and erosion of the physical mail business. Alas, months later, I decided to buy more and average down to a "bargain" level of more than $16/share!

Despite the double-digit yield today, I don't expect to free up my dead money without taking a loss. Motley lessons-learned: 1) chasing the highest dividend yields is bad for your (financial) health 2) not all high-yielding stocks need be avoided....just make sure you understand and believe in their long-term business model. Fools of the world, thanks for the education you give me every day and turning me into a better investor today! Fool On!!
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