Looking back from Friday: Did you miss the boat?

The stock market hit new highs. Did individual investors pass up an opportunity?

By Motley Fool Investor Beat Apr 12, 2013 8:55PM
The Dow and S&P 500 hit new record highs this week. The new highs came as the Federal Reserve debates ending its easy money policies. What would a change in Fed policy mean for stocks?  Is it too late for individual investors? Our analysts tackle those questions in our lead story on Investor Beat.

Shares of Wells Fargo (WFC) slide on Friday in the wake of disappointing earnings. Home Depot (HD) rises on an analyst upgrade.  Starbucks (SBUX) perks up on news the company is lowering the suggested retail prices on its bags of coffee sold in grocery stores. And J.C. Penney (JCP) slides, following word  the retailer has hired bankers at the Blackstone Group, to figure out a way to raise $1 billion in cash.  In our Movers and Shakers segment, our analysts discuss four stocks making waves on Wall Street.

And in our final segment, our analysts explain why they’re watching Google (GOOG) and Western Union (WU).
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Apr 13, 2013 7:50AM
One of the first thing that some investors don't understand, other investors can be bearish on the overall market yet be bullish in the near term of individual stocks. Regardless of bull or bear, there are multiple ways of playing the markets. Concerning whether folks missed out on the latest run, clearly most have not or the market wouldn't be setting new highs. However the best thing going is always maxing out your 401K contributions when your employer will match you dollar for dollar. That's better than worrying about missing the boat theory longer term.

At the end of the day, investors that refuse to lock in gains at some point really have not gained at all. You can never truly claim any profits until you sell. Investors should never be concerned about missing some mythical boat. There is always another boat right behind it. The next ride might have to be played somewhat differently to make a profit. That's what makes Real Markets. Pump Priming by the Feds creates Alice in Wonderland Markets. They can never be trusted.
Apr 14, 2013 4:11PM
I'm seeing these "miss the boat" articles appearing more over things that range from 1/4 of a percent to the 2.26% change in the market last week.  A generation ago it would be considered imbecilic to focus on such a short time period and small change in value.

If it is now the policy of the financial media to herd people into a short term lose-money but churn stocks and make-money for brokerage sponsors mentality, it should be honest enough to tell us so.

I used to keep incredibly detailed, spreadsheet, daily track of my investments and over a decade plus, as the S&P 500 -with dividends- averaged 9.8% I averaged 12.0%.  Nothing to brag about except to say I didn't fall into the trap of losing money by timing the market.  I simply stuck mostly to stocks of companies that are sector gorillas with decade or longer records of growth (helps predict the future!) with other aspects that indicate good management: Low debt, rising or stead Return on Equity, etc.

I sell any stock that drops under 75% of what I paid for it unless it's caused by a temporary thing like the Japanese Tsunami - often they bounce back like Citygroup has, but often they fall farther so I protect myself from getting whacked hard by a mistake in evaluation.  Each December I review my stocks enough to give myself a two minute informed speech about why I should keep or sell it.  If it's a loss, I sell in December, a gain I sell in January for tax purposes.

Most of my stocks I've kept for more than three years.  I've had Abbott Labs (and spinoff Abbvie) since paying $4/share to it's DRIP in 1991 and reinvest dividends - Abbott's now $37 and Abbvie $43,  I've had Exxon since I mailed $250 to it's DRIP in Pittsburgh in 1993 ($13/share) to avoid the high trading commissions in those days and it's worth $89 a share now.  Cracker Barrel Old Country Store I bought for $17 a share in it's DRIP in 1994 and it's $83 now.
I've had some losers like Sara Lee, but those three are typical of what I invest in. The last three I bought were AT&T in Dec. 2011 for $28+ and a 6% dividend and it's $38.59 now; I bought Coca Cola in March 2012 for $33 and a 3% dividend and it's $41 now; and I bought General Mills for $48.83 on March 27 and it's $49.35 now (9.69% annual avg. eps growth last 5 years, 3.1% dividend, P/E = 18.1).  All the stocks I mentioned except AT&T and Coca Cola have DRIPs where you pay NOTHING in purchase fees or commissions and about $15 to sell.

Yes the periods in which I bought the last three are favorable, but what do you think will happen in the next ten years to AT&T, Coca Cola, and General Mills compared to the average stock? If somehow they do less than average, it's not likely to be by much.  The same goes for Exxon and Cracker Barrel.  Abbvie loses a big patent in 2016 but has over 20 drugs in stage-2 or stage-3 of the approval pipeline.  And there's becoming such a shortage of baby formula that the UK is limiting buyers to two packages per week - China's importing large amounts of foreign ("safe") baby formula.  And who makes Similac, the world's most used baby formula?  Abbott Labs.

Apr 13, 2013 5:14PM

The bears have been crying in their beer for 4 years now.For years wall street was saying bonds were

in a bubble because people weren`t putting money in stocks.Heaven forbid brokers weren`t

making as many millions.

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