Other commenters asked, and I repeat: Where *would* you recommend investing money?

I retired in my very early 40s. I have money invested in the stock market, but I also own real estate and have diversified in other ways. Still, it’s my position in Apple that boosted my portfolio the most. (I bought it way back in the 90s.) The diversification of my investments mainly serves to buffer me from big drops in the stock market.

I am looking at having an income again — from a retirement hobby that is going to start turning a profit — and I’m wondering what I want to do with that money. If the market crashes, I’d be happy to bargain shop for stocks. But if it doesn’t, I’ll be looking for alternatives. One thing I think I’ll do is invest in my current home by making changes to reduce utilities and maintenance.

The same could be said about paper (and coin) cash as well. And gold. And any system of trade other than direct barter for goods and services. We all know it has no “real” value, but the system makes things about ten million percent easier. And unless apocalypse or revolution comes to the US, people will most likely continue to play along.

As far as market volatility, every time the bottom has fallen out, it has recovered – it seems the important thing in not losing lots of money is not to try jumping on the bandwagon only when things are already high, and not panicking and selling as soon as it goes bad.

Even if share prices never varied though, all that’s needed for stocks to be an investment is for them to pay dividends.
According to http://www.multpl.com/s-p-500-dividend-yield/ the current average is 1.85% (and the historical average is 4.3%) which is an awful lot better than what most banks are offering at the moment (0%!)

For the most part, these times have been great buying opportunities.

1) should always consider timeframe. A trade/investment that makes sense if your hold period is 5 minutes may very well not make sense if your timeframe is 30 years.

2) a stock (or anything that is traded) can be trending up, down, and sideways all at the same time….depending on your timeframe.

3) bottom-up process is only one way to do things. There are many other ways.

4) dividend stocks, and dividend + growth stocks, may or may not be appropriate for a particular trader/investing, based on goals/objectives

5) if you don’t know your goals/objectives, then you are not ready to trade/invest

6) @Cocojones: “let’s face it, trading is gambling”. If you don’t know what you’re doing, then yes, it is gambling. If however, you DO know what you doing, then it isn’t…which leads me to:

7) expectancy/positive expectation. Gambling games (Vegas, for instance) have a negative expectation to the player..meaning that over time, the player will eventually lose, and the house will win. Trading is not like this. In fact, trading is much less like “Vegas” than you would think. In Vegas, if you have a positive expectation (for instance if you are a card-counter in Blackjack), they won’t let you play! In trading, if you have a positive expectation, you CAN play. In fact, in gambling AND in trading, if you have a negative expectation you should not play.

So why do people with negative expectation (losers) continue to play at all? Because they are deriving some type of benefit outside of making money.

9) markets are probably weak-form efficient, and do not instantaneously adjust to new information.

10) instead of doing what you feel like doing in order to make money in investments…find out what actually WORKS, and do that.

Still, I largely agree with what you’re saying. I just think it’s prudent to have some money in some dividend paying stocks or an index fund. When the ninnies start leveraging the new massive base, look out. Something’s gonna go nuts (either interest rates or equities, and maybe both).

I wonder if slowly nibbling on TBF is a good idea. Treasuries ain’t gonna yield nothin’ forever. They’ll sell off hard eventually.

http://www.becomingcapitalist.com/2010/05/stock-market-or-how-i-learned-to-stop.html

Seriously? So, all of the shareholders, who supposedly have all the power, were eager to give executives $100M pay packages for losing money and $50M golden parachutes for getting fired? This is just one example of the lack of power shareholders actually have.

When was the last time a shareholder revolt happened and kicked out a board? Almost never.

Also, if having voting power is the real value of owning stock why do people buy “B” shares that either have drastically reduced voting power or none at all?

I don’t price anything in fiat dollars when it comes to investing, I instead look at how many ounces of gold it takes to buy said object. (Houses, Stocks, Bonds etc) The reason i do this is that governments cannot manipulate the price of gold as easliy as they can with fiat currency.

You can easily be tricked into thinking you are getting wealthier when you see the more dollars in your pay packet but their purchasing power has diminished.

Now back on subject. Gold v Dow. The ratio peaked in 2000 at 43 and has now fallen to 10 so if you think the stock market is not the place to be then consider gold as the place to save your dollars. Then when the ratio has returned to its opposite extreme then you can buy up lots of cheap stocks (Realative to the price of gold) with good returns.

I would not treat the game of writing covered calls as synonymous, or even analogous, to receiving dividends. The risk profile is quite different. You don’t have to do anything to receive the dividends, for example, but you can screw up your covered calls.