Stocks Plunge 634 Points 6th Worst Dow Day On Record

The Dow plunged 634 points today making this the 6th worst day on record. Here are the 10 worst days on record.

10. August 4, 2011: -513 Points

9. October 22, 2008: -514 Points

8. October 27, 1997: -554 Points

7. August 8, 2011: -634 Points

6. April 14, 2000: -618 Points

5. October 9, 2008: -679 Points

4. December 1, 2008: -680 Points

3. September 17, 2001: -685 Points

2. October 15, 2008: -733 Points

1. September 29, 2008 -778 Points

Moral of the story… for the past 20 years investing in the stock market has been one of the worst ideas ever almost as bad as investing in real estate. The gold nuts were right. If you invested in gold over the same period you would have been better off. Seems like in real estate, stocks, and most likely gold market timing is everything. Buy and hold strategy has been proven wrong.

Best Dividend Paying Stocks

Your bank pays you almost nothing to keep your hard earned money at their branch. The national average for a high-yield savings account is 0.16%. Think a CD will give you a better rate? 1 year CDs pay 0.45% on average.  One of the best ways to put your money to work is by investing in safe dividend paying stocks. Please do your own research first, but two stocks I invested in recently include Waste Management (WM) and real estate investment trusts American Capital Agency (Nasdaq: AGNC).

American Capital Agency

AGNC yields a whopping 19.7%. A REIT pays such a high dividend because they must pay out 90% of their taxable income. Right now REIT are borrowing cheap short term cash and using it to purchase long-term real estate-based assets. Interest rates WILL rise and their dividend yield will drop.

Waste Management

Waste Management (WM) is a safer beat and pays a modest 3.62% dividend.

For more information and more ideas visit this informative article about dividend paying stocks http://www.fool.com/investing/dividends-income/2010/11/16/the-most-outstanding-dividend-stock-i-know.aspx

Stocks Up What to Do Next?

Stocks seem to be going up and up. I’m getting a little concerned… I’m in a dilemma do I take my profits or let the stocks ride? So far I’m letting them ride and it seems to be working. Last week I was getting discouraged because I’ve racked up about $700 in trading fees. I e-mailed Ameritade and they gave me $100 or 10 free trades. I’m up 98% for the year!

Mobile Phone Industry

One thing I’m discovering is ANYTHING having to do with the mobile phone industry is hot… look at these stocks I invested in… according to the rating agencies they are junk, but they keep going up and up. Check out CAMP up from .60 to almost 3 in 6 months. I sold CAMP a couple weeks ago, it had a good run. Look at EFJI up from .70 to over 1.30 in just 3 months. There is a lot of money buying baskets of stocks in the mobile industry stocks. I don’t know if these small cap or penny stocks will be a good buy going forward, but small cap seems to be where it’s at. Once again this kind of speculation should only make up a very small percentage of your portfolio. 10%-20%. The reason you never hear about buying penny stocks or stocks under $5 on the news is because it’s highly risky. There is profits to be made… for example I had one penny stock go up 100% in one day, but they also can drop like a stone. For this reason you will never hear this kind of information on TV (CNBC).

Useful Video on Investing in Your 20s

I found this video on YouTube produced by TheStreet.com that said the only stocks you should invest in your 20s is penny stocks… that’s very bold advice. Keep in mind this is before the stock market crash. Check out the video here, it gives some good advice and inspiration. I wouldn’t give this advice, but I’m not a hedge fund manager either.

Stocks continue to rise. My portfolio is up 90% since putting money into my Ameritrade account in March. My strategy or gamble I’ve been making is reading penny stock blogs like thehotpennystocks.com, finding 3 penny stocks that have the potential to hit it big on possible good news. You buy all three and bet at least one or 2 will rise over the next couple weeks. I tested this strategy and yesterday one of the 3 stocks rose 95% in one day. I immediately sold the stock… unfortunately it went up another 45% today! The stock was IMGG. The reason for the sudden rise was Skymark Research initiated independent research coverage on Imaging3, Inc. The other 2 stocks are down 20% each. I still limit this highly risky speculation to about 10% of my portfolio. This kind of speculation is fun, but in investing slow and steady wins the race. That’s why I have most of my money in CAT, GE, and BAC.

I love investing… I can’t wait until next week to see what the market will do. I have feeling there will be a correction, but who knows. There is a lot of money on the sidelines… so people could start getting panicky and buy into this market not wanting to miss the bull market run we are currently experiencing. Whatever the case is my portfolio since putting new money in March is up 79%! May be I’m lucky, may be it’s part skill and part luck, may be it’s easy to make money in an up market. All I know is I’m beating some of the best mutual funds out there.

Anyway I like giving you guys these updates because investing is one way to make money online. I put money I feel comfortable losing in my Ameritrade account and buy about 80% “investments” and about 20% stocks I consider gambling. A cool site I found that picks penny stocks and has a proven track record of success is TryPennyStocks.com. One simple tip I’ve been implementing is taking profits on up days and buying the dips on down days. Yea, $10 a trade does add up, but taking money off the table and letting the stocks ride on the houses money it something that I should of done a long time ago.

Here is my current portfolio… I’m starting to pick more and more risky stocks, this could backfire… So we will see what happens. It’s more about keeping things fun and interesting than anything else.

Here is my speculative portfolio as you can see most stocks are up.

So a couple days ago my blog was infected with a virus. For the past couple days I’ve been wasting my time trying to fix this issue. I’m getting close… my hosting company is looking into this for me. I’ve worked around the clock trying to get ride of this annoyance… what a waste of time. Also, the stock market as I’m sure you know went down 678 or more than 7%. It’s dropped so much recently it has almost become like a sick joke. How does the stock market go from its high of 14,164.53 exactly a year ago to where it is now 8,579.19, or 39.4% drop? How could the market be so overvalued and companies so incompetent? I’m going out on a limb here and calling a bottom at this point. Unless the whole US economy collapses I don’t think it can go down any further. Housing is up here in Seattle and around the country singling a bottom, stocks are trading at about 15x earnings which is the historical average, interest rates are low, IBM beat expectations today, and the tax payers just injected almost a trillion dollars into the economy. Once again I’m in this for the long haul, 10 years plus, I call the bottom today.

CashSherpa.com, my blog, is all about saving money. With the DOW falling like a stone today and possibly in the near future until the 700 billion dollar bailout package goes through. Saving money makes more sense than ever until things settle down. The Jewish holiday of Rosh Hashana is Tuesday so may be we will get another vote on the bailout package Wednesday, but no one knows for sure. Republicans blame Pelosi for making a speech that was viewed as too partisan prior to the vote. In a time like this partisanship doesn’t make sense, we need leadership not politics.