No. of Recommendations: 13
Hi Fools,

I wanted to share with others my inadequate wisdom, as well as share the analysis that I have been doing to improve my financial acumen - if possible. I am a seasoned investor - but most likely an idiot when it comes to this stuff - and I am hoping to retire in about 9 years.

Back in Dec. 2005, I decided that LTBH was not going anywhere for my portfolio, and I sold all of my positions with the exception of JNJ. The majority of those positions had been accumulated in the 1999-2002 timeframe, and I had some winning lots and some losing lots. On average, I was losing. So I decided that my favorites like EMC, ORCL, CSCO, NTAP, NOK were not coming back to their stellar prices and decided to unload them all from our IRAs. I have been sitting in cash and cash equivalents from December 2005 until about mid-August of last year after visiting my accountant who advised me to start to average back into the market - knowing that a cash position in our retirement accounts would not be sustainable.

As you can see from the chart below - for all eyes to see - I started buying back shares in companies that were good dividend payers, had a long history (mostly) of share price performance, and I thought would be good adds to my and my wife's long term portfolio. My first purchases were back in August, 2008 of P&G, JNJ and MO in my IRA. Followed by GE and GLW in September. I went on more of a buying spree in October purchasing P&G, JNJ, some more GE (falling knife effect) in both my and my wife's IRA's as well as decided to start to move money to an S&P 500 Index fund in my employer's 401K.

I took a break in November and December and waited to see if we were going to get another leg down after the first of the year, and by golly we did - so I bought some of my favorite Gold Fund TGLDX - as it seemed that the sky was falling in January.

While things have gotten progressively worse since January, this month I have purchased additional shares of P&G, JNJ, BRK-B (first time for me in BRK) and some more S&P 500 Index shares in my 401K.

As you can see from the table below, this strategy is not working too well for me so far. Even though I thought I was catching these quality companies at 52-week lows, their share prices continue to erode. Now I know that some of these numbers may be better than other folks returns had they purchased earlier and are still hanging on - so I feel somewhat fortunate that my biggest loss in only in GE which is currently paying a large dividend which I reinvest for further dollar-cost averaging. (NOTE: table below does not include returns with dividends reinvested).

The current dividend yields on each (as of yesterday) are:

PG = 3.129
JNJ = 3.29
GE = 12.326
MO = 8.153
GLW = 1.965
TGLDX = (not sure)
S&P 500 = (not sure)


Purch Date Account Listing Current Gain/Loss
10/10/2008 Wife's IRA PROCTER & GAMBLE CO -15.0%
10/10/2008 Wife's IRA PROCTER & GAMBLE CO -15.0%
10/10/2008 Wife's IRA JOHNSON & JOHNSON COM -0.8%
02/02/2009 Wife's IRA PROCTER & GAMBLE CO -4.5%
08/19/2008 My IRA JOHNSON & JOHNSON COM -23.0%
08/19/2008 My IRA PROCTER & GAMBLE CO -29.8%
08/19/2008 My IRA GENERAL ELECTRIC CO -67.2%
08/21/2008 My IRA ALTRIA GROUP INC -25.7%
08/21/2008 My IRA ALTRIA GROUP INC -25.7%
09/18/2008 My IRA GENERAL ELECTRIC CO -60.8%
09/18/2008 My IRA CORNING INC -34.2%
10/09/2008 My IRA JOHNSON & JOHNSON COM -11.5%
10/10/2008 My IRA GENERAL ELECTRIC CO -50.4%
10/10/2008 My IRA JOHNSON & JOHNSON COM 0.2%
10/10/2008 My IRA PROCTER & GAMBLE CO -12.7%
01/26/2009 My IRA TOCQUEVILLE GOLD FUND 12.6%
02/18/2009 My IRA JOHNSON & JOHNSON COM -1.4%
02/20/2009 My IRA BERKSHIRE HATHAWAY INC DEL CL B 0.0%
10/10/2008 My Employer 401K STATE STREET S&P 500 FLAGSHIP -13.2%
10/10/2008 My Employer 401K STATE STREET S&P 500 FLAGSHIP -13.4%
10/10/2008 My Employer 401K STATE STREET S&P 500 FLAGSHIP -13.2%
10/10/2008 My Employer 401K STATE STREET S&P 500 FLAGSHIP -13.2%
02/17/2009 My Employer 401K STATE STREET S&P 500 FLAGSHIP -2.3%
02/17/2009 My Employer 401K STATE STREET S&P 500 FLAGSHIP -2.2%
02/17/2009 My Employer 401K STATE STREET S&P 500 FLAGSHIP -2.3%
02/17/2009 My Employer 401K STATE STREET S&P 500 FLAGSHIP -2.3%


From a different perspective, the allocations of each position within each account is as follows:

Wife's IRA:
P&G = 46%
JNJ = 35%
CASH = 19%

My IRA:
JNJ = 12%
TGLDX = 12%
P&G = 7%
BRKB = 5%
GE = 2.5% (and dwindling rapidly)
MO = 2%
GLW = 2%
CASH = 60%

My Employer 401K:
S&P 500 Index Fund = 38%
CASH = 62%

In examining the table above, I realize while my strategy seemed pretty sound back in Q3/2008, I failed to realize that the market is still deteriorating, and I should not buck that trend. Given that, I will hold off additional purchases for the rest of this month and March to see where the market continues to head. My recent purchases this year have been made on the assumption that the market would start to rebound in Q3/2009. This no longer looks likely to me.

While I was trying to "be greedy while others are fearful", I believe that there is more pain and fear to go in this market and will therefore cool my heels with additional purchases until I see a positive trendline developing.

According to my Quicken reports, I still have approximately 60% of my retirement and non-retirement long-term investments in CASH. So, I still have plenty of dry powder. I'm interested in feedback and any other constructive criticism that my fellow Fools would be willing to share.

Cheers!
'38Packard
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