Recent changes to investment Philosphy:

1)  Still heavily weighted on equities: domestic, international/ large-cap, small-cap
2)  Fewer individual equities, more broadscale ETFs and mutual funds
3)  Emphasis on tax-advantaged accounts:  Roth and Traditional IRAs, 403(b) and 401 (k), and HSAs.  Some put into children's 539 plans, the rest in savings account and to pay off debt (house and car).
4)  A few hedges in Fidelity Account (ETF--ProShares Short S&P.. symbol SH) and a silver mining ETF--(iShares MSCI Global Silver Miners.. symbol SLVP).
5)  Other than that, I'm staying the course.  Our returns were great over the past several years.  That said, I'd like to build the cash position higher for when there's a pullback.

Market Timing

What I'm gradually coming to realize is that market timing is not worth the effort. I think it can be if you make it a full-time job, but more often than not even then it's a waste of time. There doesn't seem to be much evidence to support the financial merit of daytrading and trying to jump in and out of markets. I think the best thing to do for people in their twenties and thirties is to accumulate assets of varying degrees of risk and volatility. From there, you wait until closer to retirement age and begin to manage those assets, drawing from riskier and more volatile assets and/or reallocating them into more conservative vehicles. That's all I've got for this post. But I think the current state of the economy and the near to long-term future will only prove this point further. That being said, if you see a company or type of investment that looks too good to pass up on, maybe just accumulate more of that and less of something else.

The Simple Dollar

I was compelled to leave the following comment on a blog called "the simple dollar." I used to listen to the Dave Ramsey show pretty regularly until it was taken of the air on our local AM station. I found the callers' stories interesting and his philosophy refreshing. It helped me to remember not to spend more than I can afford and try to save, pay down any debt, and plan for a better tomorrow. The one issue that the "simple dollar" brought up was about credit cards versus cash. I added my two sense, and here they are:

"Dave’s philosophy on cash only makes perfect sense. It’s the psychology of parting with cash versus swiping a credit card. I think it’s probably even easier to spend money with a debit card than to actually, physically hand over cash.

The one area that I don’t think Dave gives enough attention to is people who already curbed their spending habits and want to take advantage of rewards that credit cards give. My american express card gives me 5% cash back on gas, groceries and some other items (which make up most of my budget) and 1% on everything else. In September, I’ll be getting something like $300 cash back for buying things that I already would have bought. The question is whether I would have spent $300 less on gas and groceries if I’d been paying with cash. Good question, but I don’t think Dave just dismisses it out of hand because he’s so convinced that credit cards are evil, which is pretty accurate. The one other argument I heard him make to a caller on his show was that all it takes is one late payment and/or having to pay the crazy interest because you can’t pay the balance at some point, and all those “rewards” are wiped out.

I’m curious what others think about this. Is it better to just avoid the whole credit card realm and stick to cash, or take advantage of the rewards they offer?"

Here's the actual website:

http://www.blogger.com/post-create.g?blogID=1831751517771451841

Interesting Website

I just found a website that has some very astute observations:

http://www.hussmanfunds.com/wmc/wmc090608.htm

I will add it to the list of links on the sidebar of this blog.

I intend to spend a little more time writing tidbits on this blog. I will share some of my writing as well as some ideas I have about the economy.

One idea I had just a couple of days ago was to begin accumulating more shares of Aqua America (symbol: WTR). Since then it has come up a little. I really like the business and the 3% dividend is nice, too.

Second Guessing

I began blogging because I enjoyed reading several other peoples' blogs and thought it was something I could do. I had no idea the time commitment and the difficulty of being dedicated to something that you have no idea who (or for that matter if anyone at all) is reading it. Also, I've had some reservations about whether I'm truly interested in blogging about the topics I chose to put together. I still think there is an undeniable relationship between the two subjects, but I am no longer sure that they should be written about in the same blog. Perhaps they ought to be mutually exclusive. Anyway, I'm still trying to find time to write and still finding that money (and its pursuit) is one of the main reasons I can't find the time to do much of it. Of course, parenting is no small obstacle. That being said, I enjoy being a father more than anything else I've ever experienced, so it is a small price to pay.

Someday....someday.

I do think there will be more posts to come if you're a reader. I hope to get back to some of the topics that go me going in the first place. Stay tuned...

The Return of James

Dear Friends, Romans, Countrymen,

I'm back. Though I have no idea how much actual difference being done with graduate school will make, I hope it means I'll be able to write on my blog more frequently. The problem is, as I'm quickly realizing, there are several thousand things that I've put off during the grad school process that I kept telling myself I'd get back to upon completion: time with my wife, my kids, reading several hundred books that are on my 'to-read' shelf, write fiction, plan lessons for my students, play music, work-out, look at my investments (though it's probably just as well that I haven't been able to do that), etc. --really, the list goes on and on--

What I've come to realize is that being a graduate student didn't necessarily take up all of my time to do other things, rather it forced me to focus and be very precise in my scheduling. That being said, I'm sure I'll be able to get to some of the things on my list. As it is, I've already been able to do a couple--this, of course, is proof of one :)

Last night, my son spent the night at his Aunt Regina's, so I suggested to my wife that we watch a movie I've been meaning to see for some time: The Dark Knight. Wow, not much redemptive to that movie! I'm still mulling over the details and thinking about the tie-ins with McCarthy's literature, but it was definitely worth seeing. I think Batman Begins was the better of the two, though. The critics got it right about the Joker: he was awesome. What a twisted and terrifying specter.

In keeping with the theme of this blog, I will mention briefly my prognosis on future economic news with just a brief prelude:

1) I have thirty plus years on my investing horizon.
2) I have two children; the first will enter college in 15 years.
3) I have a relatively low paying job
4) My investments (m0st of which came from when I was a salesman) are down over 30%.

so,

Given that I think the United States will continue to see difficult times (I predict that the next bull market won't begin until the beginning of 2010), the best thing I can do is to continue dollar-cost averaging into the market.

Also, given that I want to some day work because I want to, not because I have to, I plan to take advantage of any tax-advantaged retirement options (the Roth-IRA seems the best in that arena).

Lastly, I'll continue to keep the purse-strings tight, mostly out of necessity, but also to try and scrounge together what I can to get more into the market. I want to take advantage of what I perceive to be some really good bargains.

In case anyone was wondering, I got out of Borders (BGP) way before it crashed and put all the proceeds into Whole Foods (WFMI). The shares of Whole Foods were $10.50 and went down to around $8, but are back up to near what I paid. I'm thinking I'll hold onto these shares for the long-haul, unless I hear news to make me think otherwise. No matter the economic outlook, people need food and the stock is down ninety percent from its high. Plus, I really like the CEO, who pays himself $1 salary, they stopped paying the dividend for now (which was wise), and everytime we shop there, it's super busy.

Feel free to reply.

Brief Hiatus

I will be back to writing on my blog soon. I have had to take time to work on my thesis and the newest member of our happy household has demands of her own. Anyway, I do intend to get back to writing soon. Thanks for your patience.

New Baby in the Family

July 30th, we had a baby girl. This has something to do with my recent absence on the blog front. That being said, I have been doing a fair amount of reading and thinking. I've also been following the topsy-turvy market a little. My shares of Borders (BGP) have been tumultuous of late, but last week had a huge gain (21% in one day); I guess that's why it's called speculative investing. I've got to go check on the baby who is crying. I'll leave you with this thought: AIG might be a good time to strike and I'm also thinking about Global Traffic Network (GNET)...

Terry Brooks, one of my favorite pulp fiction writers, just came out with the third and final book of his most recent series. I don't have much time for pleasure reading these days with the thesis on the wings. Alas...

Whose going to break the three-way tie in my poll to the right?

Summer Reading

Fantasy genre enthusiasts, Greg Keyes' final book in the Kingdoms of Thorn and Bone series finally came out. I just finished rereading The Charnel Prince and am beginning the third book of 4, The Blood Knight. If you like Terry Brooks and that style literature, you'll love Keyes. He's no McCarthy, but sometimes you need a break from that sort of thing.

Wendell and I just got back from the Shore and I'm closing in on the finish of my Montessori training. I hope to have some time after the training ends and before Baby Stout enters the world to get a good start on my Thesis. Also, my proposal for the West Coast Renaissance Conference was accepted, so I'll be going there in September with Dr. Pearce to give a paper on Shakespeare's Measure for Measure.

My stock pick of Borders has not been doing well lately. In fact, it's doing horribly. But then again, so is the rest of the market. I guess I'll just have to stick to earning money the old fashioned way, by working.

Additions

If anyone is taking the time to look at my blog, thanks. I have only found a few opportunities to write on it, but I hope that will change. I expect that at the very least I will be able to write something monthly. So, even if you only check in once a month or so, please do.

I also love to get feedback. For example, what are your thoughts on the new picture I put up of me and my boy? I also am curious about your thoughts on my new survey. I hope to make different literature related surveys periodically, too.

The Borders (BGP) stock I mentioned in my earlier blog has been pretty volatile, but the news tends towards the positive and, since I bought in at $5, it has broken the $7 mark several times. I think I'll stay in it for awhile and see what happens. What do you think? I'm also thinking about picking up something in the financial sector soon, if it continues to get battered down (maybe Washington Mutual, AIG, or Bank of America). At the very least, they give great dividends. I'm also thinking about getting into Pfizer as it too has been battered.

Interesting Article

I read this article today and it raised numerous questions in my mind:

Blaine-Lourd Profile

Please read it, too, and let me know your thoughts. Efficient market theory, hmmm? I guess this means we should just by mutual funds in the S&P index and with as few fees as possible..

Market and Money

The market seems to be schizophrenic right now. Any ideas about the direction it's headed? I've heard both bearish and bullish arguments. Most of the bearish ones make sense to me, but I also have heard that a lot of those reasons have already been factored into today's prices and that there are some real 'buy' opportunities. I recently bought a couple of shares of Borders (BGP) for a couple of reasons, the biggest of which are that it has come way down in price to where--assuming they don't cut the dividend--it yields over 7%. And, I read an article about if it were bought by a competitor (namely Barnes and Noble) it's way undervalued. And, they're sitting on so much real estate and inventory that it seems like there's no way it will go much under the $6 it's currently trading at. Another reason is that if we are truly entering a recession, I think people will travel less and spend more time at home reading.

Please comment. Also, I finished my course-work now and am focussed almost exclusively on Cormac McCarthy. I'm nearly half-way through The Crossing. It's good.

Strategies

I came across an article in SmartMoney about agriculture plays that was interesting. I agree with the premise that food is not going to get cheaper and that materials needed to grow food, at least following the large-scale, industrial model, will continue to drive the cost of certain raw materials like fertilizer. The companies the article suggests we invest in are Agrium (AGU), Mosaic (MOS) and Potash (POT). All of these companies produce ingredients for fertilizer. I guess my question boils down to an ethical dilemma: is it ok to invest in a company that you think will make you money even if, principally, you disagree with what it does. I'm not saying that I necessarily disagree with what these companies produce. However, being that I am a proponent of small-scale, farming that uses organic methods of fertilizing and dealing with pests, it is hard for me to be enthusiastic about investing in anything that sells to mega-agribusinesses. Anyway, your thoughts are welcome.

Book List

I just finished a book by Octavia Butler (The Parable of the Sower)--Excellent! I recommend it highly. Also, my friend Ben is entering into the world of Cormac McCarthy and began with All the Pretty Horses; a great read, but I would recommend starting with either The Road or No Country for Old Men first. Anyway, I think McCarthy is a little difficult to get used to at first and some of his works begin a little slowly (I'm still struggling to get through Blood Meridian), but they are definitely worth it.

Ben has emailed me about some questions that this blog inspired (why he didn't just comment on the blog itself I don't know), but he had questions pertaining to investments as well. He explained his situation and it sounds very similar to mine. He doesn't make a ton of money and doesn't have a ton of time to put into investing. Everything I've read and heard from financial experts direct people like us to use no-load, low fee mutual funds and try to take advantage of any employee matching 401k's and/or Roth-IRAs. The best mutual fund companies that qualify are in such large groups as Fidelity, Vanguard, American Century, and American Funds. I think once you determine which of these groups to choose from, it makes sense to begin with one of their funds that are geered towards a retirement date. These funds diversify based on your age and what they perceive to be your optimal level of risk. Once you get enough saved, you can diversify yourself, moving your money into various index funds, foreign/emerging market funds, and as you get older bonds and more fixed income related funds.

Hope this helps. I'd love to hear other people's advice and ideas pertaining to either of these subjects, or anything else you've got on your mind.

Antony and Cleopatra

I have a paper due in a couple of weeks on Shakespeare's Antony and Cleopatra. My intention is to write about the three main characters and focus on which ways they meet the various criteria set out by Machiavelli in his famous The Prince. If you have ideas/suggestions about how I might go about doing this, please reply. Or, if you have any insights into the play itself, or would just like to comment on its merits, or lack-thereof, please feel free.

The market seems to be bottoming out slightly and there might be some buying opportunities. I listen to a podcast by Rob Black (see sidebar)

He is very Californian. Even so, I think once you get past the surfer-dude-speak, he has some insights into the market.

Another new favorite website of mine is the The Wall Street Journal (sidebar)


The last thing I want to mention in this entry is the question of refinancing mortgages:

I'm toying with the idea of looking at options to refinance/change our mortgage from its current 30 year fixed (6.75%) to a 15 year fixed. I think rates are low enough that we could almost get a 15 year that has basically the same monthly payment. If this is the case, since we're not quite 3 years into the existing 30 year--instead of waiting another 27 years to have the home paid for, we could have it done in 15 for around the same price!!! What are you're thoughts?

Rolling Ahead

Thank you for commenting on my blog. Please check in periodically as I am new to this and hope to improve rapidly.

I finished No Country for Old Men (McCarthy) and I'm tempted to say it is the best book I've ever read. Over three hundred pages of some of the best language and plot I have ever seen on paper. I read it in two days--it was that good!

I found an interesting blog the other day and I'll post it's address on the sidebar. It mentions this new "book" device. A professor of mine (Dr. Evans at NCCU) recommends it highly. Check it out:
Kindle: Amazon's New Wireless Reading Device
Amazon.com is excited to introduce Kindle - a wireless, portable reading device with instant access to more than 100,000 books, blogs, newspapers and magazines. The Kindle's revolutionary electronic-paper display provides a sharp, high-resolution screen that looks and reads like real paper. It is simple to use: no computer, no cables, no syncing. Whether you're in bed or on the train, Kindle lets you think of a book and get it in less than a minute. Click Here!.

Bear Market

These are the times when I am glad there is a second component to this blog: writing; of late, I have emmersed myself in the novels of Cormac McCarthy. I finished All the Pretty Horses two weeks ago, am halfway through Blood Merridian (a very difficult read), and am plowing my way through No Country for Old Men (awesome book). McCarthy is the author I am writing my Master's thesis on. The cornerstone of my paper will be The Road.

I've just been sitting on my stocks and mutual funds. In early January, I sold a couple of stocks and moved some of my riskier mutual funds into more conservative funds, still stock-based, but more large-cap, dividend producers.

I intend to make more blog entries, so please reply and give me feedback. Let's start a dialogue.

Writing and Money

As way of introduction. I am an aspiring writer who recognizes the importance of leisure time in order to pursue my dream of authorship. Understanding the need for time and the relationship between time and money, I have made it my goal to become financially independent of 'the man.' Also, having some background in economics and investing, I realize that the best way for a person of my limited means to reach a goal of independent wealth at an early enough age, investing in stocks seems the logical solution. What other investment tool offers such potential and liquidity with such a history of proven success?

A regular frequenter of other financial bloggers, I decided that there is a value inherint to the process of blogging itself; it provides the perfect medium to frame thoughtful questions and ideas with the backdrop of knowing others will be looking and critiquing my thoughts. This, being my first post, is just to set the stage for what I hope will become a great interchange of ideas.

The themes I wish to pursue in my blog are--if you couldn't already guess from the title--writing and money. Please feel free to chime in with any insights you might have on how to become better with both of these topics.