Thursday, October 2, 2014

October Investments

As you've no doubt seen, the market has taken a bit of a tumble.  I'm viewing this as a moderately god thing since I'm not really a short term trader, and it gives me a better opportunity to buy some stocks at a better price.

A few months ago TradeKing made a boo boo and to correct it, they gave me $30 in commission money.  All well and good... until I noticed it has an expiration.  It seems they can only give you three months to spend that trade commission money so I have some "use it or lose it" money. Normally in my TradeKing account I don't want to make purchases less than $500 to keep the commission below 1%, but since this was basically free trading I made a few smaller purchases.  I will likely add to these positions later, so they just get my foot in the door and assist in diversification.

First up: AT&T (T)

AT&T is an old company.  It's known as a solid, steady, slow growing juggernaut of a company.  My interest in AT&T is the high dividend payout (over 5%) and the fact they've been paying higher and higher dividends for over 25 years.  As I don't ever plan on selling (at least not in the short or medium term), I like the confidence that by the time I retire I will have received enough dividend payouts to cover the initial cost of the stock, that on top of any changes in value of the stock itself which will retain value in one form or another.  I bought AT&T today at $35.00 a share.

Next: Realty Income (O)

I like the concept of owning a piece of a company who owns a lot of property they rent out.  and Realty Income has been doing it for coming up on 50 years.  They also pay a dividend over 5% annually, but they pay it out monthly, which is different than most companies who pay quarterly.  I was able to snag shares at $41.00 a share, which is less than 10% off the 52 week high.

(I bought this through Tradeking, but if you're just interested in investing in Realty Income, you cna invest directly through their site and pay no commission.  Further they have a free dividend reinvestment program that lets you take additional shares instead of cash [look up DRIP investing].  Thats a pretty good set it and forget it approach to investing.)

Finally: iShares Mortgage Real Estate Capped ETF (REM)


This is a gamble, but since I had some left over cash to invest I wanted to try it.  This is an EFT, similar to a mutual fund but traded like a stock.  This fund focuses on companies who invest in mortgages, borrowing and lending money at different rates.  I chose this because of its mouth watering dividend of 13% paid in quarterly increments.  I bought 18 shares at $11.75 each.  I'm hoping to get between $5 and $7 a quarter from this investment and use that cash to pay the commission on future investments.  If it goes belly up I'll be out $200, but if it works then it funds future investment decisions and makes me less concerned about the commission overhead.

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