Wednesday, June 4, 2014

Book Review: The Elements of Investing (Updated Edition)

Hey all!

Hope everyone is doing great today! Gorgeous weather here in NYC!

The other day while browsing my local library's personal finance section I came across this gem:

The book seemed pretty practical and small enough to be a quick, informational read- so I grabbed it and ran with it. I finished the book yesterday while on the train and decided to provide a quick review on it. So, here you have it:

My overall review of it is that is a wonderful book with a lot of great information from how to get started with investing all the way with super specific and practical tips on where to put your money (ticker symbols and all!). I love books that get away from simply emphasizing the theory and actually provide practicality!

The book makes a great emphasis on the fact that the most effective way for an individual investor to get rich is by doing it s slowly and investing in index funds. The thought process behind that strong suggestion (I say 'strong' because its emphasized several times throughout the book) is the fact that index funds provide enough diversification so that no matter what happens in the market, your money is safer and more profitable in the long term as oppose to having the majority of your money invested solely on individual stocks.

On a personal level, the book allowed me to educate myself further on other forms of investing rather than concentrating all my money in equities. I have to be honest that I have never invested on index funds, ETFs, or mutual funds. It is something I have thought about a lot but have not acted on it as of yet. Most of my investing is done in individual companies while keeping in mind the importance of diversification. Hence, I approach this by making sure my money is allocated within different industries.

Other great tips I learned about (or was reminded of) include but are not limited to the following:

1. The different tax advantages that come with investing in government bonds and instruments of the sort as oppose to individual equities.

2. The "controversial" idea of selling losers rather than winners-- I thought this was quite interesting yet something to definitely consider as they make a great point. The book reminds us that selling losers provides us with tax breaks while selling winners adds to our income opening up the possibility of paying more taxes.

3. Rebalancing our portfolios about once a year--- this is to be done with the purpose of allowing us to collect some gains from "winner" investments and also to make sure we don't have too much of our money allocated in one single stock/investment (bringing us back to a 'balanced & diversified portfolio').

4. The amazing power of DRIPS also known as Direct Reinvestment Plans. DRIPs allow you to increase your position in a company/investment without any action on your part. Hence, making it an "get rich automatically machine". Check out this article for a quick overview of what a drip  is.

5. The idea that no one can time the market, hence, techniques such as dollar cost averaging can be very effective in making sure we get investments in our portfolio at various prices; not too high and not too low.

6. The importance of saving and living below our means. Saving is actually the very first chapter of the book and I could not agree more! As a saying I heard recently says "save to invest rather than save to spend!"

...and so much more!

I would say my favorite chapter is chapter V: Keep it simple. Here, the authors elaborate on the idea that investing should be simple. Doesn't have to be complicated in any way and encourages this methodology: KISS- Keep It Simple, Sweetheart.

I encourage you to get the book or borrow it from your local library. I think that both, new and experienced investors alike, can find a good amount of sound and valuable information in his book.
Next steps for me? I plan to do some research on some of the specific recommendations provided in the book. I will share some feedback and let you guys know if I end up investing in any of the recommended funds.

...Remember this my friends:

Tell me, Have you read this book before? what are your thoughts? any books you would recommend?

As always, wishing LOTs of profits,

Monday, June 2, 2014

Common Habits of Millionaires

Hey everyone!

Hope you all had a great weekend! If you know me on a personal level-- you know that one of my passions is reading books, articles, any kind of literature on personal finance. I also enjoy watching TV shows on said topic. This weekend I came across a show on Fox Life (Spanish channel) entitled "Your Finances with Julie Stav". The topic of the show was focused on habits  of people with a millionaire mind. Reminded me of a book I read long ago entitled 'Secrets of a Millionaire mind'.  I love being inspired and considering one of my favorite sayings is "I will be a millionaire one day" I figured why not share what I learn along the way?! 

1. Millionaires spend less than what they make-- Live below their means!!

2. Understand the power of compound interest also known as the "8th world wonder", money takes time to grow.

3. Eliminate all debt monthly-- doesnt carry around credit card debt from month to month

4. Understands that financial freedom is a mental state! If you have a negative mentality of scarcity that is what you will attract. The opposite is also true-- a mentality of abundance and prosperity attracts just that! 

5. Millionaires Can't lay around doing nothing all day-- people with a millionaire mind are always looking for way to nourish their minds either through continuing education or simply seeking others that may know more than them, to learn from them. They also surround themselves with positive people whom are motivated. 

6. Understand they'll make mistakes-- no one is perfect. We all make mistakes and in the process we gather experience which can often times turn in to "golden nuggets of wisdom".

There you have it! What are your thoughts on having a millionaire mind? Do you agree with the above?

Saturday, May 31, 2014

Portfolio Status

Hello Everyone!

It has been a while since I've shared a recap of how my stock portfolio is doing. I will be the first one to admit that the past several months from January-May have been extremely busy for me. However, as pointed out in my prior post, I finally have some time to relax and do the things I love doing more often--- that includes managing my stock portfolio and looking for new companies to add to my repertoire.

I have some time until my new job/internship begins and that means I have been running again in the new found gorgeous NYC weather (another one of my passions) as well as enjoying some morning Television. I must confess that I have been absolutely obsessed with CNBC's "Squack on the street" and was pretty excited when one of the hosts replied to a random tweet I wrote one morning:

...Is the little things in life I tell ya'.

But anyways, still in the process of finding new stocks to add. I have some in mind but still doing some "background" analysis before I take that next step.

So anyways, how are my stocks doing? Considering the current bull market and how great the market has been overall, specially during the past week, I am happy to say that the majority of my positions are doing great. I have one portfolio with TradeKing and the other one with TDAmeritrade (may be looking to consolidate soon). But here you have a quick snapshot:

Symbol Description Avg Price Current Price Dividend Yield
CL Colgate Palmolive Company $59.19 $68.40 2.20% (1.44)
COH Coach Inc $74.01 $40.71 3.30% (1.35)
GOOG Google Inc $229.01 $559.89 n/a
GOOGL Google Inc $229.65 $571.65 n/a
JNJ Johnson & Johnson $82.85 $101.46 2.80% (2.80)
KO Coca Cola Company $27.95 $40.91 3.00% (1.22)
NWY New York & Co Inc $3.30 $3.96 n/a
V Visa Inc $143.35 $214.83 .80% (1.60)
Symbol Description Avg Price Current Price Dividend Yield
DIS Disney 73.96 84.01 1% (.86)
NKE Nike 75.91 76.91 1.30% (.96)
VZ Verizon 51.22 49.96 4.30% (2.12)
COH Coach Inc 73.54 40.71 3.30% (1.35)

You may notice there is one lagging stock in my portfolio which has been lagging for quite some time. Take a quick look above and you'll be able to identify what I am talking about. 

Most of my prior posts emphasize how much faith I have in the company as a whole and it is true that it still remains profitable with a lot of cash. However, the consistent decrease in North American sales for the past several quarters and increasing competition from companies like Michael Kors have hurt the stock price tremendously. Sales, however, have been increasing outside the U.S; specially in China and the company is currently going through a transition of becoming more of a "lifestyle brand" as oppose to simply a luxury brand; as well as branching out in to products targeted to the male population. 

In my honest opinion as an individual investor I still remain firm on the believe that it is a great company. However, I feel that competition is fierce and  it will take some time before the company is able to get through the "growing pains" of transition and emerge back in to healthy and profitable quarters in North America. The issue is-- how long will this take exactly? they have amazing management and are working hard behind the scenes to turn back the company but only time will tell. 

I also feel that the theory of an "hourglass" economy may also be affecting sales in North America. In simple terms---an hour glass economy refers to the idea that the "bottom" consumers---those who only buy things on sale and are constantly looking for cheaper deals, is expanding. On the other end of the spectrum-- those individual whom only buy extravagantly expensive luxury brands is also expanding, leaving the "middle" with less consumers and perhaps this is why Michael Kors sales margins were also recently affected during the past quarter. This is just a theory. 

Aside from this, I think the main issue is without a doubt competition. If COH is able to be strategic about their turn around and fight back the brands that are eating up market share, I believe a positive turn around in its N.A sales and its stock price is in fact in its future. However, time will be the best determinant of this conclusion and in the meantime, I will continue to watch my stocks like a hawk and do what I need to do when the time comes. 

Thank you for reading!

Feel free to share:

1. What stocks are on your current watch list?
2. What stock is currently "lagging" in your portfolio?

As always...wishing you LOTS of profits,


Wednesday, May 28, 2014

MBA: Completed!

Hey Everyone,

I am alive and well. I can finally say that I am finally living the "calm before the storm". I started an MBA degree part time back in the spring of 2010. Although I often felt like I would never finish; I have to be honest in that I took it slow and steady. I never took more than 2 classes per semester and didn't always take summer classes. However, when I realized during the fall of 2013 that I could actually finish my degree if I took up four classes the following semester I decided to suck it up and do it. And so I did. As one of those sayings go "don't delay happiness".

If you are a close family member or friend you can be a testament to how difficult getting his degree has been for me and how many sacrifices I had to endure in order to get through semesters. From missing celebratory events of loved ones to having my laptop and books with me during vacations or mothers day/fathers day celebrations, to crying by myself at night feeling alone and wondering whether so much sacrifice would be worth it. But one thing is for sure. The support from my parents, my sister and friends was always incredible. And that means the world.

Despite my love and passion for finance I have to be honest in that my most difficult and challenging classes where all finance related (note: finance was my concentration!). There were times where I either wanted to quit because of how difficult things would get and I have to admit there were a couple of times where I would fear I would fail a class (I have never failed a class in my entire life). However, thanks to a whole lot of focus, determination, and most importantly-- prayers; I managed to pass each and every single one of my finance courses as well as all other courses I took on. I maintained a GPA over 3.0+ during my entire MBA career which was no easy task working full time and going to school at night.

Today I can finally add the "MBA" designation next to my name and I am also incredibly excited for what's to come in my life. I am so incredibly lucky to be starting an internship with one of my favorite companies this summer (will share more about that soon) doing what I LOVE. And after that, the sky is the limit. I am not sure what exactly is going to happen in my life going forward but all I know is that I have goals, plans, and an incredibly good feeling for what's to come. Instincts never lie!

Something I am very proud of is that I was able to finish this degree with very minimal debt. I was lucky enough that when I started this degree I worked for an employer that was paying for my courses. When I changed employers, although they didn't pay for the courses, I was almost done with the MBA and I managed to work out my finances in a way where I was able to  keeping loan at a minimum. I plan to start paying back ASAP and have a clean slate once again. I will be doing some research on the best way to approach repayment but I am always willing to listen to advise from the investing/personal finance community so if anyone wants to share tips or tricks let me know!

Now that school is behind me I will have more time to blog and do the things I enjoy. I have so much catching up to do in the investing department of my life and looking forward to it. In the meantime I have been spending a lot of time watching CNBC in the mornings (can I just say I am kind of obsessed?!) and just monitoring my portfolio of stocks. Thinking about doing some rebalancing but will share more about that when I figure out which route I will take.

Thank you for reading and cheers to new beginnings!

I forgot to mention this but my MBA is in Finance and Entrepreneurship.

...And in honor of my favorite author whom passed away today, may God rest her soul. I leave you with a very relevant quote:

Wishing you lots of profits,

Mabel A. Nunez, MBA

Wednesday, March 5, 2014

Recent Purchase (part 2): Nike

Nike (Ticker: NKE) is another stock that I have been watching for quite some time. As per my "watch list"; I have been observing Nike’s stock price since March 27, 2013 at which time it was trading at $58.66 per share. I watched the price consistently go up at a steady pace (with its occasional down days). However, I cant really recall any crazy fluctuations (as it was the case with DIS). Despite all that, I still remained a little hesitant with buying the stock mainly because of competition within the industry, controversies, and not having the time to do enough research.

The price passed the $60 mark and then went in to the $70s once again making me a little "upset" that I didn’t get in back in the 50s.

Well, I eventually got around to finishing my homework on NKE and on 01/14/2014 I pulled the trigger and bought myself some shares. Just as it happened with DIS, I purchased on a down day and during the weeks in which the market was quite bearish. The stock hesitated a bit post purchase going down for a bit until it began to stabilize itself once again and proceeded forward. I am up 3.10% (as I type this) since day of purchase. It is not nearly as high as DIS (just yet) but to be able to say that my investment has appreciated nearly over 3% in less than 2 months is something I am very happy about!!!

Who else would give me that rate of return?? Definitely not a savings account and much less putting my money under a mattress. This is the difference between being passive with your money (ie: stacking it all away in savings gaining 0.0001%) V. actually putting your money to work for you!

(REMEMBER: putting money away for an emergency and for your bills [including any kind of debt] should always come first. Any extra money, which you wont need any time soon, is what you should be putting to work in the stock market).

To all my investors out there just starting out—I just want to point out that everyone whom invests has their own "investing personality" meaning that they have their own strategy and their own approach towards stocks or any kind of investment instrument. Some go for the new and exciting IPOs, others love penny stocks, while others (as it is my personal case) concentrate mostly solid/established companies, preferably that pay dividends, and that still show potential for growth. I like to see that a company, regardless of how popular it may be, still works hard towards creating and maintaining sustainable competitive advantage, which I feel is the case with a company like Nike.

Here are some of the main reasons why I feel strongly about this stock:
  1. Leader in its industry- Nike is currently the largest sports/fitness apparel manufacturer in the world!
  2. Pays Dividends- Currently pays 0.96 per share (yield: 1.20%) and has been paying consistent dividends since 1984.
  3. Healthy 2013 returns (specially in Europe and China) and a positive outlook for 2014 (based on analyst reports from Credit Suisse & S&P which I examined)
  4. The company has an international presence ß gotta’ love international!
One of its most recent major competitors is UnderArmor (UA) which has become increasingly popular in fitness apparel and is working hard to establish a brand synonym with quality. That’s another great company which I am also keeping my eye on. However, at the end of the day, NKE is still king and I am proud to call myself a part owner of NIKE!

Tell me, what are you thoughts on Nike? (the company or the stock) How many Nike products do you own?

Saturday, March 1, 2014

Recent Purchases (Part 1): DISNEY

Hello my dear followers!

Finally got a break from my hectic semester to share a couple of my recent purchases which have turned out to be quite successful.

I may have mentioned on the blog previously that I've had an eye on Disney ($DIS) for quite some time. I actually placed the stock on my watch list around March of 2013 where it was around $54 a share and saw it shoot up in to the $70s range a few months later! I don't know why I kept hesitating on the purchase but it may have something to do with the fact that it was being a bit volatile-- Shooting up or down significant percentages from one month to the next. However, at the end of the day, when the stock would finally "stabilize" on a certain price it would move up a little more and then a little more until it would hit a new "record". Needless to say I would kick myself each time for "missing" the opportunity once again.

Some time ago during the end of January when the market was on some sort of downhill spiral; I spoke about the importance of taking advantage of downtimes within the market. In fact, as my virtual investing mentor, Warrant Buffet, explains; we shall be fearful when others are greedy and greedy when others are fearful. I love his methodologies and feel that they do work! There has to be research involved, of course, and we need to know what we are doing and what we are buying. But once we've passed the "homework" hurdle; next step is to catch a great deal when the opportunity presents itself.

So anyways, back to what I was saying; in mid January 2014 (less than 2 months ago) when the market was down; I decided to pull the trigger on DIS and purchased some shares at a price of $73.50. The stock is now at $80.81 (as I type this) and I am very excited at the fact that I "dove in" when I did, putting my fears aside, and my decision has paid off!! (literally). I am now at a near 10% profit in less than two months. All I can think is "why didn't I buy more shares?!" but, you never know with the market and I've had my share of experiences with over-buying so, I rather take it slow and steady for now.

I have to be honest with the fact that as soon as I bought my shares; the price went down slightly and continued to fluctuate a bit until it finally begun to accelerate forward. I don't know what the stock will do but DIS is an amazing company, crème of the crop, with very little competition (if any! is there any business identical to Disney out there? I don't think so). Plus, they have a diversified business owning ESPN and acquiring the Star Wars name, in addition to pursuing other strategic business deals. As the long term investor that I am, really looking forward to seeing what Disney has to offer in the coming years. Not to mention a current 1.10% dividend (.86 a share); and we all know how much I truly appreciate dividend stocks!!!

During my time at the Motley Fool I asked one of the experts (Hi! Jason Moser :) whether he could be the "devils advocate" and tell me if there is anything I should worry about with Disney since I couldn't find anything wrong with it based on my research. He admitted that he also loves the stock and the only "worry" is the fact that their major source of income is the ESPN enterprise (this is something I didn't know!) and considering the competition from companies like Netflix; offering certain services at cheaper prices and expanding on content; this could somehow hurt ESPN profits in the future. I loved the feedback as this is something that never occurred to me. So, I will continue watching any development on that arena. For now, I am a happy part-owner of Disney stock!!

Tell me, what are YOUR thoughts on Disney?

Friday, February 21, 2014

My Investing Methodology.

What is one of the reasons why I am so passionate about investing?

Well here is the secret: I approach investing as if I were buying a part of a company, which is exactly what everyone does when they invest but many don’t look at it the same way. How cool is it to say you are a “part owner” of Google, apple, Starbucks, McDonalds, Coca Cola, etc. etc. There is nothing more exciting for us investors (when it comes to stocks) than doing our research, finding undervalued yet high quality companies, putting some money on there and seeing it grow.

The idea for this post came from my experience this week at McDonalds (ticker: MCD). I may not share this much on the blog but I am a very healthy conscious person. About 80% of the time I try to make a conscious effort to eat nutritious foods and to work out whenever possible (or as consistently as possible). However, I am only human and from time to time I do get cravings for particular foods and this past Monday MCD was one of them.

 As I entered the newly renovated location by my school I could not help but smile at the modern set up. Despite the controversy about the lack of nutrition in their foods, which I can’t really disagree with; as an MBA student I have a tendency to look beyond the façade of businesses and at what companies actually do in order to maintain sustainable competitive advantage in a world of never-ending competition.

I have to say that with about 73 years in operation (established in the 1940s) MCD sure knows the definition of that term inside and out. They may have had their ups and downs through the years but they are working hard to expand menu choices and provide more variety for a growing health-conscious population. They do this while maintaining their famous staples that have made them the company they are today and which people can never get enough of.

We can’t ignore the fact that they are facing competition from ‘up and coming’ health-focused fast food companies. However, the important thing is that MCD seems to be well aware of this and are making strides towards keeping up with changing times. There is no denying that a company like Mickey-D's is not going anywhere. At least not time soon; and probably not in our lifetime. It may not be healthy but it has a market and a big one.

I have owned shares of MCD on and off for the past 5 years and it has been quite a ride! There was a time about a year ago or so where they had a poor quarter and the stock price decreased significantly but my trust in the company as well as my trust in their sustainable business model made me hold on. Shortly thereafter the stock came back up and that’s just how its been on and off for as long as I have been investing in it. As the major stock geek I can be at times, I felt very excited to be a customer in a business where I’ve owned shares. I may not always own shares in this company but this is where I stand at this point in time.

 …And there’s more


As I made my way to the soda fountain I got even more excited (am a geek or what?!) when I noticed the flashing Coca Cola Logo. I was reminded that MCD’s top vendor for drinks is Coca Cola (ticker: KO)-- which is a company where I have also been a  happy shareholder since 2008, and then I smiled some more.

So there you have it! This is one of the reasons why I love stocks so much—I get to own small pieces of huge corporations. How amazing is that?! I also love this country for giving me the opportunity to build wealth via the wonderful world of investing!

If you are just starting out with investing but aren’t sure where to begin or where to buy first, think about those companies where you do business. Are you a happy customer? Would you invest there? Then, do your homework and make your decision! If you are a seasoned investor, think about your personal reasons for investing in companies. What drives you? What keeps you motivated in this sometimes unpredictable world of investing?

Have a great Weekend everyone!

If you already invest, what is your favorite thing about it (besides making money)?Disclaimer: I currently own shares of MCD and KO. Don’t invest or cease to invest solely on the information provided on this blog post.