Most of us know, I hope, that it is a great time to add to your growth stocks and funds. This is where the money is made. As I have said, it is harder to get people into the market at great values than when the market is climbing high. Human nature. Your worst enemy. So, even if it’s that $10,000 in your couch cushions, buy some of the great names at very attractive values! The move you make today will be looked back on as a very wise decision.
Buy Income
It is also a great time to lock in some income for the long term. Stocks and funds that have dividends are down in price. When prices go down yields go up.
Example by using the same mechanism in a rental house:
Rental house: $400,000 Rent: $30,000 Yield: 30,000/400,000 = 7.5%
House price drops to $300,000 Rent: $30,000 Yield up: 30,000/300,000= 10%
By purchasing a new property at $300,000 you lock in more 10% yield. And by buying funds or stocks you lock in more dividend income.
Dividend funds and dividend paying stocks work the same as the rental, because dividends are paid in dollars and when the share price goes down, the yield goes up. Also, dividends can go up and rents can go up.
We have some funds that were yielding around 7% and are now at 9% for instance because share prices are down. Like buying a rental house near the bottom of the market, you lock that income in for the life of the fund.
Give me a call for details.
Headlines
In this new era of half truths and hyperbole, it is tough to know what is what. Half truths and hyperbole are used to manipulate. I just saw a headline that women won’t be able to get an abortion in 26 states. Well, that would be an almost impossible scenario. There is only 12 states now who don’t allow abortions and several have postponed or cancelled the toughest restrictions. What does the headline want you to do? Get angry and repeat the incendiary headline. The 12 states only have about 15% of our population. 38 states will likely allow abortion with the same access they had. When people decide to be angry, these headlines spread like head lice at summer camp.
Here are some made up examples of a deceptive technique used in manipulative headlines.
- University of Washington study says less cops will equal less crime in the long run.
- Study shows oil drilling in America would not help inflation.
- Researchers at the University of California and University of Wisconsin Madison find that woke parents make for healthier kids.
As you examine these headlines you will see that the body of the article is not near as certain as the headline. Let’s look at the last one on woke parenting. In the body of the article, you may find phrases that say “researchers may have found that woke families make healthier kids. The study was not large enough to make conclusions, but many academics agree that is what they see in practice.”
These articles are chock full of words and phrases like may, could, perhaps, hints at, some find conclusive, shows evidence of, many scientists agree etc. Remember these articles are brought to you by the same people who claimed the Covid vaccine would protect you 90% from getting Covid.
When it comes to investing you may hear, “Apple stock has seen it’s best days, analyst says.” Then the story goes on to tell you the analyst was a chart gazer (technical analyst) or that most analysts don’t agree, or that this guy has been full of it before. But the headline sticks. You may walk away (well not you, but some weak minded person) and repeat the headlines as fact. “Hey Bob, I heard that drilling in the US won’t help inflation one bit.” And now Bob has false information in his head.
So, watch out for those headlines!
Please forward to a friend!
See you soon,
Craig