Tuesday, July 26, 2011

Week 13 Deposit and being prepared

As I started my blog and model portfolio I laid out how and where I would make my weekly deposits. Current events necessitated me to change those plans...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

In the video I mention wanting to keep things simple and avoid lots of moving parts. I want to expand on that a bit.
On one hand it seems simple: if Congress doesn't raise the limit people will sell bonds. If they raise it everything is fine. But is it really that simple and is that even accurate? A lot of people are saying this.  The "moving parts" of this theory is in the details.
1: The Democrats, Republicans, House, Senate, President of the United States, "Gang of Six" all have their own ideas. That's potentially 6 different ways this could play out let alone what form any compromises will take. Even if they get a compromise in place before August 2nd...
2: How will the world react? The credit agencies have stated that they might lower U.S. credit rating even with the debt ceiling being raised. So whatever compromise that might or might not take place may not even be enough...
3: After a deal is or is not made and after the credit agencies react how will foreign countries act? Will China dump their bonds or will they stand firm? Japan has a lot too can they afford to lose the interest income with all their own economic problems? These and other countries have enough bonds that their actions could move the markets.

See what I mean about moving parts? For me, there are way to many "what ifs" and unanswered questions. We do not know what will or will not be done nor at what time this might occur let alone be able to guess the chain of events that will come later.

The thing is there will always be a crisis to worry about that an investor could be locked in permanent inactivity. They could also get stuck into a mentality of jumping in with money to beat the crowd and get rich.
I'll just sit back and watch for a bit. There will always be another trade tomorrow but if I am not careful I may not have a portfolio left for that tomorrow.

Weekly Activity
$100 deposit into Trading
$50 transfer from Savings to Trading
Purchase 8 shares of O @ $34.12

Model Portfolio Totals

Trading Account: $150

Investing Account: $895.03
Stock: $0
REITs: $276.32
     O: 8 shares
Bonds: $554.78
     JNK: 7 shares. ($1.78 total dividends)
     PCY: 10 shares. ($1.26 total dividends)
Maneuvering: $63.93

Savings Account: $250
Emergency: $250
Portfolio Protection: $0
CDs: $0
Precious Metals: $0

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others.
I am not a financial planner, financial advisor, accountant, or tax advisor. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets

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