Roaming Returns

018 - When To Look At Your Portfolio And How Often To Make Adjustments

• Tim & Carmela • Episode 18

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Some people compulsively stalk their portfolios while others want to set it and forget it. Checking your investments too often can lead to emotional decisions while waiting too long can cause unbalance. Both approaches lead to losses.

This episode covers how often we look at our portfolios and why certain times of the year are ideal. We also discuss how you can effectively make adjustments based on the information you find when looking into a particular stock.  

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Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

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Welcome to Roaming Returns, a podcast about generating a passive income through investing so that you don't have to wait till retirement to live your passions.

In today's episode, Tim and I are going to talk about how often you should check out your portfolio and your brokerage account and why. And then we're gonna go over a few things with allocation and percent so that you don't have too much in one asset and lose your butt when something goes wrong outside tapping us not fun. So let's get started guys. A quick note before we actually get rolling. I had a little bit of an issue with our recording device for the last episode. So thank you so much for the people who have actually listened through that echoey thing that was going on. Somehow my computer defaulted to the laptop mic as opposed to the actual condenser mic that we use. I didn't figure this out until after we recorded this episode. So bear with us through this episode. I've I've reduced and I've re uploaded the previous one. Now I understand what the heck is going on. The recording volume and clarity should be a lot better going forward. My apologies hope you enjoy this episode.
Welcome back. P bats.
Bring us bring us in the in the industry.
Bring it all down.
This one's I think a little bit overdue. This this week's podcast we I don't know how I overlooked it. But we've given you plenty of ideas for investing. If you subscribed to the email, you will get plenty more ideas for investing
in absolutely tons.
What will what I plan on talking about today is what to do with your investments which once you pull the trigger like I like I know in Schwab you can actually set things up with let him pull out his computer there. You can pull up your positions chart which will show you like the they'll show you the price blah blah blah but I think there's some tabs that are super important that every every time you go to your brokerage account should be present. One of those is the last earnings day. That's super important. I'll get to that in a minute why that's important. Another one would be the ex dividend date, which you should know by now that you have to have own the stock prior to that their expiry to actually get the dividends and the reinvestment if you have that on and I like to have the P E with the P E ratio just for giggles distress thingies but there's a reason for that like it's like there's more we currently have one that's can be worth the seven P E which is ridiculously high so I expect that to sell off some more. But you need to set up your your brokerage catalog. It gives you certain information like that, like the earnings dates important because this week we're going to talk about what to do once you actually have investments in your portfolio you even there's a there's there's a couple of trains of thought about that one as you don't do anything you just set it forget it kind of like when you use index funds for like retirement you just literally look at it like once a year and then readjust accordingly. That's a good strategy for something like an index fund but like if you actually have like stocks, BDCs REITs, things like that. You want to do checkups. The best time to do a checkup is after they do their earnings report because that earnings report will show like all their their their financials, their revenue, their their their margins. It should also show like any Forward, forward thinking prognosis that they have, like are they going to is their EPS going to be what it's like? There's two different like previously projected there's two different projections for EPs there's what the company projects and then there's what they quote experts project like Yahoo Finance and those Wall Street folks will say can't be worlds ups should be 70 cents a share during an earnings call, which is like it's usually the same day as an orange report. Sometimes it's not sometimes the earnings report will be for the afternoon and then the earnings call will be the next morning. But it's around the same time. During the earnings call the companies will actually break down their finances like we made this much from this segment of our like icon for example. They break it down like we made 60 million from our automotive section we made 30 million from our health section. So we'll break down which sectors in their company are performing best, what are the most important thing that they will actually say well we're for thinking based on our past is that our earnings per share is going to be this much we're going to pull on this much in quarter four. We're going to pull on this much a quarter once to actually give it a prognosis of the health of the company that the company thinks not what the experts were that why that's important is it's way more important with company thinks not with the experts, but they have all the details. They have the dates, but the stock will move with both what the experts say and then what the company says but for you as an income investor you're more concerned with what the actual numbers say not what what the street says that makes any sense. Well, let's
some interpretive questions, though. And we're subject to that potential misinterpretation four
times a year like there's four times a year that companies give earnings reports. So I really I would literally put the earnings like the last earnings call on your chart. When you Google when you log into say fidelity or you log in to AmeriTrade or a Schwab or whatever. You can actually click a settings button in there that you can then pick and choose what shows when you log in. And one of them I would I would have the dividend yield dividend. The excerpt of the ex dividend day, the earnings report date. They don't have the next one but you can pretty much extrapolate that from the last ones. It's every three months. So Camping World said like it was a 1024 so you can take okay 1124 1224 124 She noted be looking at Camping World information at around 124
Kevin Rose just recorded recently,
potentially for like two weeks ago.
She was sitting over in the bedroom mom chillin in the office and he's like, oh my god Camping World Smash. There
are lots of support that like okay, we'll do we'll do a tangent here but like everything that we've recommended that's went down, is killing it as earnings
icon just reported icons smashed
just smashed candles smash to like and if you look up those three what I'm saying any piece smash if you got into that kudos because you made too much money on that one when I brought it up
we were in before they fell off a cliff because you know, economic stuff that whatever and they all had really big corrections. In the negative and a less, I guess, risky type person or somebody who has a less strong stomach.
They would have knee jerk reaction like oh my god, I can't grow went down 40% today what the hell that most people probably wouldn't so but you go in to the actual data and look at it. There's no reason to be overly concerned that cut their dividend, which sucks. You did suck. Absolutely. But all the fundamentals were the same a week before.
I know you looked at that. That was the weird outlier when that we were talking about before where they kind of did like a weird transition. They were a dividend or decent dividend prior but they decided to go into growth mode. So they cut their dividend so they could buy up all these
fully expected dividend to go back up for what it was before. What they did is they save money they cut the dividend so that they could grow at five all sorts of RV
dealers. But what they're doing right now is they're actually trying to liquidate their use are these because they don't have as much
was actually an earnings call like if you like what I'm so I was just saying like you go into the earnings details and you look at one of the things they're doing is they're getting rid of their 2023 and older yeah the US 2023 and older RV so they can bring into 2024 So next year, they're just gonna have mainly 2024 RVs on their dealership which obviously go for more than a
better profit margin. So that to me says once they get their debt a little bit in control I think the dividend is going to go back close or maybe or work up incrementally to where they were headed for
another aspect of the drawings like for MPW and Hercules capital and horizon technology. If you have any of those. We mentioned that all the BDCs and the REI T's that are really sensitive to interest rates, they will actually illustrate what their debt breakdown is. And like MPW debt is still from 2020 and before they haven't really got any more new debt under the current interest rates. So that's super important actually addressed that in the email this week, like what I feel like people are super worried about interest rates while most companies still have the 1% borrowing rate. And there they would be asinine to actually borrow at 7% or 8%. Like
how we are right now where the two houses that I have ones locked in at 3.75. I think the other ones have 4% interest. So if I would sell and buy a new house, I would be then locked into new current interest rates, it would make no sense to do that if I don't need to do that. And these companies are looking at that from the exact same perspective. Why would they get rid of their debt or try to grow and take on more debt? If they can continue paying there's really low interest rates,
although I could it's there's two reasons like they don't want to take on new debt because it's like a 6% interest rate disparity that was 6% or at the top but as long as they're making a chronic say like for example calm which we recommended eons ago that as well. The eggs still cost the same amount to make but they're selling their egg eggs for like 40 or 50% more so their profit margin should in theory, increase by 10 or 12% a year.
So you'll probably see that their earnings will be high, I guess when the next quarterly or maybe the one after that comes in because of that lower debt interest rate. But then if they ever take on new debt going forward that the higher industry you actually see that shrink, which I'm sure people kind of panic with the you know, they lost more but
literally what just happened with Tesla, we actually don't own Tesla, I don't recommend Tesla. Then they had the yo Max because you can make money on Tesla stock. It's freaking crazy. You're on that you'll see like, it goes up 4% one and then down like 8% and up like 3% and then down to 12 It's like a crypto all over the freaking place. But Tesla they took on a bunch of new debt to actually grow their company. So their profit margins went from I think it was like 14% down to a 2% stock tanked
but if there's a legitimate reason why and this is where you'll find that in those earnings reports, there's a legitimate reason why that makes sense with that third, dynamics thinking there's nothing to worry about, you know, they're good manage companies, and that's what the most
most of the ones that I've actually recommended are well ran. Trying to think like maybe some of the the ROI ROI LD or where it's just a conglomerate like that the
other one that we were talking about, but I think the biggest takeaway at least that's stuck in my mind and I don't even know this is on topic, but I'm
saying like when we first thought right ry LD because they they invest in all of this smaller rustle small caps. They're actually worse plays in high interest because if you're investing in 200 companies, there's a higher probability that you're going to get more companies that are interest rate sensitive than if you just invested in one company.
So there's a negative there, but so I don't know if we mentioned it on here how our portfolio was like over the 100,000 mark, and then the correction in August September. Pretty much put us damn near back to our starting at 75,070 75,000. We actually hit
was at 80,000. We were dropped down to like a little over 80 And that
was that I mean, that's a heck of a shell shocked to lose like 20 grand 20% in a month or two. I thought what was crazy was we were I mean MPW we're in camping world and we're an icon, but wasn't there another one you said that actually smashed something or just had a huge spike? Quick course of course.
So that's preferred for queer K, which is like QVC and whatnot. So what
was it like a cumulus? They were our portfolio is actually about 14% this week. Yeah. So that's insane. If you think about it, but at the same time, if you look at how those stocks spike, they did exactly what we were projecting that eventually, the actual metrics would catch up to, like reporting sentiment,
that people are still wary of them. And that's fine. Like I don't particularly care because if you look
at that massive spike before earnings like because after massive earnings
came out everyone's like wait a minute, maybe these companies are shitty is gonna be
pouting because all the ones that investor experts said, Oh, this is a buy now or like, we've been saying that for months.
So like, I mean, the hard part about you, I was going back to my saying, like I would look at your portfolio at least once a week to make sure there's no like one off things going crazy like oh, well, I cones down 18% this week. Why is that?
Well, that's a prime reason to like wait for those. Those quarterly reports because if you had that spike in the opposite direction, you may want to reevaluate your portfolio allocation.
But the hard part is you're looking at it you see, well, hell it's not 80% This week, I really want to be and the hard part is not getting emotional, but you still need I don't believe in the doing that once a year. Nonsense. It's like there's way too much stuff throughout the year. And another reason is, you look at least once a week to see make sure that the dividends aren't being caught, that's a huge debt has been cut and stopped stock is going to generally go down although there are aberrations like when they cut the dividend, that stock goes up, because although management's on top of this goes back to how it gets reported manager was on top it in first place so I know anytime you read that that's nonsense.
Well, that's the thing you really do have to read the things yourself and use
comfortable so it goes back to the whole nobody cares about your mind like yeah, definitely.
So we saw something that kind of dividends like I can't cut their dividend FTW cut their dividend.
But if you look at it logically with MPD PW cut their dividend, they went from like a 20 15% to 2% still really good, so I don't care about them.
But that was my point. If you evaluate them on a case by case basis, you would understand like we understand why camping will cut their dividend because they wanted to grow from Oh, it totally makes sense to us. Exactly why we didn't say that. We didn't sell any of that or we take part of off the table. I can't remember. No,
I haven't. So I sold in your mom's retirement account. I sold something got something else but ours are left alone.
So there's that one I think I can't I think we took some of our off the table when it went down because another opportunity presented and so give her boobs that are MPW reasons
I, the only reason I ever sell things is not because of the cut, or the price goes down or the price goes up, but I go based on the percent of my portfolio.
You just happen to be looking at it right after one of the other ones. Yeah, I guess that makes sense. If it's
ever like figures above 10% I'm like, Oh, I gotta sell something. I don't care. Like I don't I don't have any emotion when it comes to selling like that. I think that's something that needs to be learned by every investor you if you have a motion, you probably shouldn't be investing in the
stock market. Well, and I know we've said this before Tim does have emotion about the moves. But what he'll do is he's very disciplined with he'll come and say something to me, I'll be like, damn, I need to sit on the third day. They'll be like I can't make an emotional move. So I'm gonna wait until I'm not more clear
this job's rocky when you go in it's like oh, well my portfolio is down 2500 That's interesting. I dropped wow, I dropped home $8,000 And this look companies that's nice but like I so there is the shell shock but you can't make a knee jerk reaction during the shell shock. You actually have to say okay, I'm gonna go do something for the
day and he's gonna think about it and then that's when we go in and I know we've said this before too, but this is totally important. It will really help that emotional perspective with looking at your monthly income. So if you focus on that, and then looking at your share quantities, if your share quantities and your income is going up, those actual value shifts don't really have that much of an impact. Obviously you want to sell stuff that's extremely overpriced and put it in something that's a better, better thing, but we don't usually take everything off the table because there's still a probability or possibility that some of these things are going to continue to grow. I think Hercules capital was in that category. Wasn't it harder like how it's gonna keep going up? Never like I think it's going to so
far he was like Hercules and Trinity are both two that I've actually sold prophets multiple times and because they're going to, what happens is they keep going up so much that they actually get more from the dividend because the dividend keeps increasing and then they've actually eventually become like 10 or 11 or 12% of the portfolio and it's like, Well, I gotta do some of this. I feel
like we kind of like do $1 cost averaging out as prices go up and then we dollar cost average in when other ones go down. But Tim is always on the lookout for what was the other one? Wasn't it you said the dividend shifted from like normally a 4% up to an 8% because there was a huge difference. Is that one of utilities,
Verizon or something? Verizon was like when we got that for your mother and her retirement was at like 8%, which is ridiculously high. It's normally like five and then we got a new GI as another one that's normally like in the four to four and a half percent range as human like 6%. Now, so that was the premise of the weekly email was utility stocks may be boring, but like they are super lucrative right now. And they're like the one sector that can't not have that. So they're always borrowing. So they're always depressed throughout that off the interest rate hikes we've had because they're actually borrowing because the infrastructure and or whatever else they got going on with them. They're like just taking off that all the time. And when they take on debt, they're not at the 2020 level anymore. Obviously they're 2023 levels so they're actually going to have less profit margins, less less revenue, more debt. The price is being killed, but with their prices killed, their yield will jump. It's one of the perks of downtimes. Like we actually never, we address that you get more shares because the price is lower, but we actually never addressed that. If you aren't in something say like ugi or Verizon. And you see Oh, live and they've been getting hammered this year. Their yields obviously going up, the price goes down, the yield goes up so and the beauty of utility stocks is vast majority of them have been raising their dividends every year for what 20 3040 years. Kind of recession proof so rising, for example, is raised its dividend 19 straight years. It's per se we know that if you get into 8% Obviously it won't be 8% for long because everyone's gonna pile into it. So probably go from 8% back down to like 6% work normally, but you lock the 8% and then so whenever they start whenever they do their dividend increases that percentage
alternative to 9% 10%. Year over year over year, and that's actually how you get higher yields over time by holding the same. It does sound like we sell a whole lot more than we actually do. The way Tim talks to me I'm like, Do we have anything that we keep consistently but we do pieces of
fractions I don't like It's like probably one in 100 while 1% of the time 100
So if I was actually I'd actually been grilling him on that whole thing and I think part of that is because we don't have as much money in our account as he would like. He said it was a lot easier managing my moms because it had over two and a half times what we had, because then he could actually put the 10,000 in his 10,000 So he had better diversification or he was able to get everything he wanted because
then your moms can what makes it super easy as we did a podcast on bullet shares and like whenever I sell like 75% of a whole day that hurts like I just have been bullish here so I don't have to go in and be like, Okay, well, that needs to be generate income. So I'm going to take it from this and put it into that like her like and just literally dump it into bullet chairs, which like they're awesome. Like I'm doing it right now in my Wells Fargo like with any excess money, I have my paycheck. I literally just transferred to my brokerage account and then I put it into bullish shares and the bullish shares, they're given six, seven, I think 6.7 and 7.4%. And they just sit there and like they got I'm up like $16 in bullish shares, but that's not why I'm in there. I'm in there because I'm my money making money
using it as a high yield savings account, but it's in his I guess, through Wells Fargo brokerage so it's just like a quick flip over if we need to actually take it out. So and he's putting a lot in like I think at least 500 a month, maybe more or charge two or two. Yeah, so he's socking money away I will use it all my income to pay for
it and as I build up my work I go up my worthy emergency fund is up to like six grand I'm probably probably will double that before it's all said and done up to 12,000 and now that I have that kind of where I kind of like it. I then started putting stuff into posters because board shares or Wells Fargo has the brokerage with part of your your account pays you to transfer money from your checking into your in here records and buy both shares. So it's simple and quick but both shares actually yield more than when and then worthy. So like both shares might be in play for the foreseeable future. I know that's up to each individual person.
If you say the one just raise that thing. Normally they go in like tandem with their price to kind of stay on the same interest rate but I think you said the one actually went up and maybe it was the price of it actually not normal
price went down like in the in the B S J She won I believe the price went down so much that the year went by seven and a half percent which is then again what we were just saying like I was like oh crap, so I put my pile a bunch of my extra money that went seven and a half percent because that's a really good return for
price bandwidth. Yeah, that's really friggin cool. Um, so we're talking about portfolio allocation and like rearranging stuff.
So I was talking to you need to check up like your you need to do a portfolio checkup at least four times. A year, and we'll and then what you you can do when you're doing your portfolio checkup the four times a year, you can then look at your personal portfolio portfolio breakdown like that what's, what percent is and what stock and you can adjust then or you can do it like once a year that's entirely up to you. I know there's the philosophy that you let your winners run, but at the same time, I don't like to have more than 10% stuff. So there's like that battle going on like okay, well when the capital for example, as I got into Trinity, I don't know how, if I could duplicate it, I'd be like super wealthy I got into it like a lot that day that it hit its low.
And it's so fun. Like his intuition just blows my mind and I have talked about this so many times. They seriously just blows my mind
got into that we put I put 10,000 into trending, because that was at the time it was only 9% of the portfolio. And alternatives dots have been in it's gone up like I it's it's mind blowing, like I sold at least five times taking off like 1000 here 750 There another 1000 And we're still up like 30% and it's still like 8% of the portfolio. I don't know how to
do the dividend drip turned off on that. And it's you're still having to sell that even keep that portfolio allocation. Right. That's the
reason that I do like the reason that I'm very like I'm not a stickler for a lot of things but one of them that I am is I don't like that 10% There I don't like it, I think it'd be about 10 is because we got burned you can always be in a sock that's doing super well. I've tried to for example, on my portfolio it's been awesome but they're going all like do there's always a chance that comes out like candy world or
or even with Verizon with those towers that weird was it mercury or aluminum? Lead in the wires if that like literally was a panic cell everybody freaked out and those things dropped like freaking lead balloons.
So like, because there's always the chance that they'll just drop and drop that's that's like 12% of your portfolio is dropping like 10% and
that is one of the things you really do have to see if you watch the market. So if you zoom out over time it goes up but if you zoom in, you see these fluctuations of ups and downs. So 10s Like dollar cost averaging out when it hits above a certain percent of the portfolio makes sense and turning that trip off. And then when it has its pullback, which usually things do go in their cyclical rules, they'll actually put back into it and reallocate at the lower costs. It's like a hybridization strategy, because he was just saying about how people you know, ride the UPS or what was it, keep letting let the winners run, but at the same time if you don't sell you never make a profit if you never take your profit off. More people are actually prone to getting greedy, staying in things and then they come down and then they get hopefully they go back up but they actually stay down. And that's when they'll sell and take actually a loss at that point. So it's always better to at least take some money off the table.
That's my philosophy with the yield back for example, if you do we talked about those
not on here. I think we've hinted at them but we use
MAC's has ETFs that basically like they just pick a company like Coinbase or Tesla or Exxon Mobil there's like 16 of them or something like that. And then actually we'll put 90 Over 90% of their capital for that particular ETF they'll put it into treasuries and then the other 10% they just do the covered calls and sell like they do options. I don't know. I can't like breakdance
a little difficult to understand, but essentially they do put some calls
out of the money puts in calls generate income, so why put money into Tesla Coinbase Amazon, Facebook, No, I never did a Facebook, video video. Exxon Mobil I did like five or 6002 each. So what I do is I actually then whenever anytime I buy something, I go I have a spreadsheet like okay, I bought this at this price. Second question.
Do you have like a price range in your spreadsheet that you know, like if it goes above that that's like over overvalued, to like, are you just kind of have you watched? I think you said the other day you've been watching stuff so long, you kind of now understand the rhythm and flows of the stock because you look at the same stock so frequently that you actually know.
I was going to get some point but yeah, that's like, every everything that we want to pay attention to for years now multiple earnings reports so I kind of know what spreads are going to be built with these yield Mac's what I do is I want soon as I click buy on the Exxon Mobil for example. I went to my spreadsheet said okay, I bought $1,000 and ExxonMobil got me X amount of shares. So then I know how much I have to save from the dividend. So I got started, like some months always drip on and accumulate more shares when I know that it's going to be a high dividend. This is actually
the strategy we were using. When we were in a lot of the crypto when they had the whole p2p lending stuff situation we would actually buy crypto and we lend it out and do that leverage thing. All these ETFs work very similarly what we're they're giving you that dividend. We would take that actual profit from that and pull it out so that we actually would be getting our initial seed money back. So when you eventually hit your 100% threshold, whatever you have left in that asset is all house money at that point. So you take all the risk off the table. They are the ones that you
let rise and then you don't have that knee jerk reaction itself because it doesn't matter. And then they become cash
cows that they actually keep playing out. But if they ever go to zero, you're just like, I got my initial money. No biggie. So that's one thing
that I've never actually seen that and any publication that I've read, that's just something that I innately discovered. I was like, Well, I'm getting like I was what what how it started was with actually with the one we brought before ECC or I was making this yield six or 7% per year but I was making hundreds of dollars a month. And I turned the drip off and I was like so after like

I think it was after like four months I made $1,000 I was like, Well, okay, that's down there 50% Of what I put in, so I was like, Well, fine, just take that night put it in something else. So like when you turn the drip off, it goes into your brokerage accounts cash and then you can allocate however you want at that point. So I turned the drip off and I started putting it into other stuff and that's what I so that's basically what I do with the EO max. Now you'll Max are like, because we don't have the extra money to contribute every week, via paychecks, some some ways you can send which you can't but it is what it is. I use the old Macs as our weekly paycheck. So like if you recall a few episodes ago, we were talking if you're 20 something years old and you contribute $500 a month for like 10 years you can retire as a millionaire without dealing with only investment for 10 years and then letting it grow. When I'm using the yo max for is that $500 A month contribution. So in theory, I'm actually not putting any money in but I am
yeah, and then you're creating your paycheck inside. So you're actually seeding your investment accounts through the yield which is absolutely fantastic if you think about it because Tim's always looking to like add more to certain positions and he's looking into buying ones that he like he discovers new socks all the time like any P was one that he didn't even know I struggled with. For a while because
of I actually that was a lesson for everyone listening I actually listened to the experts about that and they're like oh my god, like look at its borrowing. Its borrowing too much money has too much debt. It's gonna it's cutting its dividend as like, Oh my God. This was asked but then I when I looked at it, they actually didn't cut their dividend they cut their dividend projection. It was projected to grow 10 to 15% and they cut it back like six to eight or six to 10. So then when I actually read that, read the details. I was like, well, these people are all crazy. That's freaking awesome. This raises dividend for like 20 years straight. And it still they didn't cut the dividend they said instead of 10 to 15 next year rolling in to raise it six to 8% It's still a yearly increase. And they ended like the stock was like 70% off. I was like well that's a no brainer. So if anyone listened about that, you're welcome. You're welcome. And that's
the point we talk about all the time where if you're lazy and you just listen to the talking heads, I really do believe they pump fear on purpose so that they can actually get in at a discounted price. Whereas if you are actually taking the time to read those quarterly reports and stuff yourself like Tim does, you can actually read through the BS essential or
one of the dress one thing like so when I was smiling when we first started I said you can do it index funds. index funds are the lazy persons way of investing. I mean, I don't know how to say that politically correct or friendly or friendly or nice.
Well, they are very lazy, but they're also really, really good if you're super young. Because if they set it and forget it, but those are the years I really
don't want to be what I'm going to say about those though as you can get the yes like the s&p fund will grow at 10% on average per year. That's awesome. But you also if you want to grow more than 10 to 12% per year you actually don't invest in those you can find similar closed ended funds that hold the same companies the same stocks as the index fund but they do the cover call thanks here then you're obviously you're going to pay a little bit more fees, but you're getting say 17 to 18%. So that means it doesn't seem like a lot for like a little bit extra work but still 6% More as 6% More
that's huge. Like you read any investing book on one to 2% is huge when it comes to long term investing compound aspect is huge. So that's why they harp on that the thing. The other problem with index funds is an index fund that 10% growth is in the value of the actual asset, meaning if you want your money out of it, you have to actually sell your asset. Whereas if you're buying the dividend stocks that we recommend you're generating actual passive income that you can take out without actually having to sell your assets. So you're actually setting up your retirement passive payout, like social security type check. Well, while
I was doing it, Keith, you are set on the easy way of index funds. Take a hot moment to like look up at like USA and CRF and CLM and things like that they actually hold generally the same stocks as the s&p index money you're gonna invest in what you're getting to, I don't know 10 1215 17% dividend return, so you're still gonna get the 10 to 12% per annum or yearly raise rise in value, capital appreciation costs, but you're also getting these on the side. So that, to me, seems like makes more sense to do a little bit extra work than just do this. Forget in the index funds. I'm sorry, I'm so lazy way of investing. Final say about that. And again, I
think there's a time to place because what
I'm suggesting right now is literally maybe, I don't know three hours of research a month is all Yeah,
like if it were me personally starting over again. I would probably open a Roth IRA and just do one of those index funds and just let those one to 2% dividend that they come with reinvest and just set it and forget it. I'm like retirement age, because that would be like 20 3040 years down the road and I don't care, but I would take my extra money and I would actually but I would take my extra money. And I would actually put it into what Tim does with a brokerage account, because that's setting up an fu fund essentially that if you're growing your own income, and you're actually hitting the point where you can replace your paycheck. You can basically tell your frickin job off because it's like if you hate going in there you at that point have that fu money where you don't have to say yes ma'am and do the stuff you really don't want to do you can do that. I can take a vacation and I can go do this doesn't matter what they say to you.
I just regret there being a complete troll all my stuff.
I do like the tax instead of a Roth. It's
not a control freak. issue. It's just that I know nobody else cares like I do. And like he'd say some shit goes sideways and like we lose $10,000 or $20,000 like we did well that's on me for lose $20,000
Been there done that.
But I would think if it was me starting out, but you said you've put it I would literally take my retirement money and I put it you kill it.
So that's if we're in our 20s Like if you're older than I would 100% go Tim's approach, because to me, I don't want the deferred life plan at that point. I've already sacrificed my 20s and whatever's
sort of driving I always try to find a high yielding dividends that have good growth history and like the best ones for whatever reason or utility. It's like I can't I can't even like if you haven't subscribed, please, you should just check out the latest email. It's
thorough, and I tried to break everything out so you can kind of just bullet point down
the content of what I just wrote as Mike on mine. I mean, like I had I known this we would have probably this strategy would have evolved sooner I've gotten we probably have a better base we
would have so much more money in our account, we would have probably double the income we have right now. Because
I for example, I use for Ryzen ugi NDP, which are all three have multiple years of dividend growth. They're all super undervalued, like anywhere between 30 and like 50%, undervalued so you have that appreciation that's going to happen in the next government as well. And here's the other thing, yield almost 9% and they and they have a dividend every day they increase the dividend every year. Like you're looking at. If I started over, I would literally put like half my money into those three and just say okay, let's let them ride up and let me get my dividend increase every year and then I put my other half and whatever.
Salaries are pretty safe and the thing is like we might be hitting a little blip with euphoria right now. But there's a lot of people still talking about a recession on the back end. And we actually think a recession is on the cusp of coming,
coming full fledged recession, but I fully expect that because when we were first talking about like they're borrowing money, high interest rates, what happens is they're not gonna they're not borrowing money, they're not gonna be able to fund like research and development for like, the pharmaceuticals they're not gonna be able to buy like new apartment buildings like the REI T's are not going to be able to borrow as much money as they want to for like the BDC. So I fully expect the growth to become stagnant.
I would assume that consumers are going to stagnate as well, which means the profits are not going to go up which means we're actually gonna have a pullback, even if it's not a full blown recession. But even if you have to like budget your money, you always have to pay for utilities. So utilities are recession proof. And the thing is right now if you get in while they're undervalued, as soon as the media and the talking heads start saying oh, hey, utilities are not the thing, which is usually a six month lag from when we talk about it. You'll be in and you'll actually get that appreciation on top of those. It's
like I can't use the point that I can't like, I still try to wrap my head around like when I'm reading stuff. I'm like, Dude, I thought that I said that and I reached that like three months ago. Like bond like said that like a year ago get into bonds I don't like so really, guys are experts. Maybe I need to change jobs down
and I wouldn't want to go back to school for the certification but
that's part of the reason that we do a podcast because I don't want to be like DC or DC area manager or whatever. Go back to like when you first log in, like all you need to set your account up the way you like it. Some people just like that how much it's worth and how much they're the cost basis how much they may have lost. That's simplistic, but I like to have that extra data because it makes it easy. Like when you go into your homepage. It lists everything you own. And it says okay, well you see oh, I have an earnings report coming up in the next week on this on this one. So I know that be on the lookout for the report from like a TNT or whoever the hell of this. But the thing that I was going to mention, I know I've read multiple times that a lot of the quote experts say not to have more than like five to 10 stocks in your account. i To me personally you should not have more than you're able to do the research more than you can manage. So if you have say you work a job where you can like click on to Yahoo Finance at work. You can obviously have what five to 10 you can say okay, well that was okay. That's their report for this one we currently have I want to say 30. In our personal swab count, I think we have 24 in her mom's account. So I'd like some of those crossovers. We I usually am looking at details pretty thoroughly for probably 40 stocks that doesn't really consume as much time as you would think it's maybe one after the same stocks 20 minutes a day over
and over again you tend to then no certain data doesn't change or you'd like start didn't really get the ins and outs and you get the pulse of everything and it just becomes muscle memory.
The most important thing is to learn how to look at an earnings report with at that point and it gets faster the more you do it. Maybe we'll go over that in one podcast or email at some point like I really
am going to start doing videos at some point. Yeah, we
should be like every day it's so funny because like I when I wake up I'm really just I'm brain dead for like an hour and then we'll like vomit that maybe I'll brush my teeth and we're like, I guess the toothbrush and vibrating my freaking teeth makes my brain kick in overdrive. But then like I'm just like, hey, you know and blah, blah, blah, blah, blah. And she's like,
I'm like I need a camera on you. And he goes this because these are like amazing snippets. He's like I'm not gonna do to repeat this.
My memory is not what it used to be. I'm an old man. I don't think
it's bad I think it's you like sitting in like Kahn stream of consciousness.
So for your portfolio don't have more stocks and you can manage man by managing me like research and do deep dives into at least a couple times a year. I only own
the ones that you are able to actually another
aspect is don't have a company that you haven't done the research on. Like you have to know why you like it. Like I know why like I can't even though everyone else hates it because they owned like they have 80 Different companies. They are they're so diversified. I like I can't I know why like I want we have calm because you got one of these eggs and they they're the best egg company. That that's the thing. Apparently it is. I don't know why I have Trinity but whatever. I'm writing the Hot Rod high on that one. But I know I know I have Kangen Water I'd like I know why I own probably 90% of what we have and then we're going to go into her mom's accounts. I know I have like my long thought, for example, because pharmaceuticals are going to be the way of the future because I read somewhere that everyday can dazzle people become retired, the baby boomer generation. So like pharmaceutical companies and healthcare companies and Rei T's, handle all old person stuff are all going to be on the rise in the next two to 15 years. Because
the baby boomers are a huge segment of the I think they outweigh the next few generations. Because
the United States is the oldest because they there's more baby boomers than younger retiring than people being born. So like I don't know what we're gonna do and ever though workforce. I think we're after that point.
Maybe cuz I'm thinking on this AI movement. And the
reason why I say that and I guess it's something to look forward to probably five to seven to eight, maybe 10 years, like all the baby boomers are retiring. And all the young people don't want to do the job that they did their boomers did and all those CEOs of these companies still have the mentality of people like to roll their sleeves up and get dirty. Well, they don't accidentally till they change their business rank by robot. There's going to be like a, I don't know when it's gonna happen. I just know it's going to happen where the workforce is not going to do the work and profits are going to stumble and companies are going to have less revenue because
it's definitely been a weeding out of the people that are going down but I really do think AI and the robots are going to be a robot. I mean, we've already talked about how AI is actually the new hot thing. So reasons that's
the stock of 2023 the basically it was a lot like if any of you people are all like me, you remember like 1999 Whenever all they had to do was put.com.com dotcom bubble. I think what's going on right now is the AI bubble all company has to do is say well we put this much money into AI and here's our AI division and people are like oh my god.
totally a thing was the the renewable energy or the Evie ship now it's moving into the AI so crazy but like that's
the buzzword
so don't
own what you don't know. Don't Own more than you can research but always have the stuff easily accessible. It's like more efficient. There's log in and have it right there than it is to like, click on what you own like okay, there are these days like just having all those sort of pops up. It saves you time and makes it easier and quicker to research. And I realize you have to you've had probably once a year maybe twice a year I do it probably four times a year I'll go into that. Okay, I need to get out of I need to sell a little bit of this one. Because it's too high my portfolio diversification,
you mean allocation, your allocations to
not have to readjust. You said 10%, right.
You don't want to have that more than
like six to eight but yeah, until we get there. But like anything more intense that you have to sell. I mean it sucks sometimes. You're selling should shit that you're losing money on it, but it is what it is. But you actually if you're following what we're saying looks like you're losing money. That's another thing that we actually never really It looks like you're losing money but you if you count your dividends with your price appreciation or depreciation you're generally up like I can go through even with all the shit that went down from like August and September like if you include the dividends and everything we are still up and I probably 75% of my holdings. That was
one I think we were supposed to be down like 40% And if you took those dividends are no count. It was only like one
like if you'd like this year like the reason the stock market's up is because it's seven stocks. Well, the reason our portfolio went from 100,000 to 80,000 is for stocks, everything else were up.
But those were the ones that actually rebounded during this last week and gives up 14% value increase
the ones that I have high hopes for because I told you I totally I totally believe you can't
I don't care if it's just a matter of time before the market really does with flat towaway
we've not gone even though that one's like it's overpriced blah, blah, blah. Now what that they have their hands so much yet that I totally believe what they got going on. And he's he's I don't really believe in like online, TV shopping, but it's a preferred share. So even if it's shipped for like the next five years, there's going to come a point and they have to buy back at full par value, which is 130. Well, there's
still a lot of boomers that were sitting runners the other day and dad was watching one of those infomercials on TV that I'm providers orthotics. So we have all these boomers retiring
before before the board Kim was our icon it went down like 60 to 60% this year camping world went down from I think 60% Queer tip went down 40% And then ry LD small cap index one PW within that. FTW but like of those five I believe in for Marya ry LD I'll probably phase out at some point. But
I think we're picking up more icon because
anytime I have extra cash I'm like, why not? Use more of that but like, if you do build the reason I bring this up, if you do the research, you know what companies you like? And if you know companies you like when you have the extra money you're like, you know when to pick it up because you've been looking at it so long. Okay, well that's undervalued that they can afford. And
then if you use that conjunction with the butcher method where you could take all your paychecks that you're consistently investing and roll those into blood shares until you know one of those stocks is in that buy price range. Like you're still making money while you're waiting which is it's like seriously the most ideal situation
so we're down another reason we do what we do is because we saved money and a software if you wanted to actually buy the software to do it. We're telling you like what I what I've suggested through the months it's a lot a lot of money or you have to subscribe the people that will give you exact buy and sell things understand they're spammy AF, but like with us, like I'll just say whatever why right? So I'm like, Well, this one's a buy up to this price. So if it's below that price by Mark, the fair market value is 25. I'll say buy 24 So even then you still get like a 4% gain and it saves you money saves you time and if you know the company know when to buy and because you're looking at so much they'd be like okay, here's the bad trades and I know it's here so I can buy and get this much gain and dividends. Otherwise, everything that I've recommended everything I've recommended for years now has a dividend of at least I mean, I think the worst one 7% Camping World, okay for 3% but it was that was like 12 but it cut down to like it's down at three now but that one is one of the ones I know it's going to be attention again in the future. I can't
wait for that to happen to be like told you so.
I don't like to do that but I know I do it. I don't mean
like the audience but more of a general frickin expert retards because
I've never believed experts. I'm not an expert you can believe me.
Alright guys, we're gonna wrap this episode up. It's getting a little long. Till next week. Have a great weekend. Guys. If you haven't subscribed to the newsletter, Tim would love to write to more of you and have you actually get benefit out of what he's putting out every week. They go we only email you once a week. Unless it's the end of the month or the beginning of the month where we do the actual format newsletter. You'll get an extra one on a Friday. We're not spamming never gonna spam and we only give you like insane amounts of value. insane amounts of value well, so
it's all over the place all over the place like you think there'll be like a coherent way to do it. I know like some weeks I'll email you about interest rates other weeks it'll be like REI T's it's it's is fascinating to see how my mind works.
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