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Cryptocurrencies – A slippery slope?


Cryptocurrencies have been exploding recently. Meanwhile, the stock market continues to go up and up. People from all over the world are putting their money into cryptocurrencies. Rumors have spread about crypto being a safe haven when the stock market crashes and there’s speculation that the value could expand significantly. Then there’s the widespread speculation that crypto could see a big boost when various companies jump on board with it. For example, Ripple (XRP) is being used for transactions at some banks in Japan already, and American Express is working with Ripple. In fact, Ripple’s value has doubled in just the last week alone.

Through talking with several friends, I’ve discovered that there are some common misconceptions about this stuff. For example, some people, even those who are heavily involved in the stock market, have thought that you need to buy an entire coin to get started. And when you look at Bitcoin’s price today ($16,800), that seems like a major roadblock!

In reality, you can buy as little or as much cryptocurrency as you want. For example, you can buy $100 USD of a Bitcoin (0.00595 BTC).

We could speculate all day long about the direction this will go, but I think it’s safe to say we’re in the middle of a bubble. Until things shake out and all of the dust settles, we’ll never know exactly which coin or which blockchain technology will succeed. Bitcoin is referred to as a “junk coin” by a lot of people who have already gotten rich off of it. Not because they’ve sold it already and moved on, but because it’s simply not as robust or convenient of a coin compared to Ethereum (ETH) or some of the others out there. The technology behind Bitcoin is outdated. It was the first coin that started all of this madness, and with a market cap of almost $291B (yes, that is 291 billion, not 291 million), I don’t think it’s going to disappear overnight. Nobody knows. Bitcoin is used primarily as the conduit to move money in and out of the altcoins. So what’s an altcoin? It’s pretty much anything other than Bitcoin.

So, how can I get started w/ this stuff and what should I do?

First things first, you’ll need to transfer USD to one of the main coins (Bitcoin, Ethereum, Litecoin or Bitcoin Cash), which you can do by setting up an account on Coinbase.

(That referral link gives both you and me $10 for signing up).

Coinbase for main account (you can buy BTC and ETH… LTC and BCH if you want).

The #1 recommended alternative exchange (from me) to buy alt-coins, which gives you a lot of options for alt-coins would be:


Sign up link for Binance:

There are several others out there as well, including Kraken, Gemini, Local Bitcoins (LBC), CEX, Bittrex, Gatehub, etc.

Binance is a Chinese exchange, which scares me a little bit since cryptocurrencies were banned in China last year! Binance operates out of Hong Kong. China allows crypto companies to operate as long as their servers are not based in China, so Binance’s servers are in Korea.

I might suggest buying XRP Ripple on Binance, which you can buy w/ ETH. Ripple just became the #2 coin by market cap last week, overtaking LTC Litecoin. It’s rumored to be added to Coinbase soon, which could cause it to go up even more. American Express is using it and some banks in Japan have adopted it. It’s highly possible it will exceed Bitcoin’s market cap in the future. Here is an article from CNBC talking about another way to buy Ripple using Bitsane!

Other coins to consider:

XRB RaiBlocks, growing fast. Recommended in December by my brother’s coworkers. Rumored to be added to the Binance exchange. When a coin is added to an exchange, it typically jumps up quite a bit. It went up 235% last week. It was up 13,250% last month. It’s one of the hottest coins right now.

You can buy XRB with BTC on BitGrail (initiate send BTC from Coinbase to BitGrail (first you find the address to send to in the Deposit section of BitGrail), confirm it has arrived, then buy XRB through the Markets section of BitGrail).

BLT Bloom, still very early stages. Goal is to combat the Equifax hack through providing decentralized control of credit. Using blockchain technology to protect credit & reinvent how credit scores are calculated! Absolutely fascinating.

Buying BLT Bloom tokens could take several hours to figure out how to purchase since I believe you need an ERC20 ETH wallet, even post ICO. You would buy it from ETH. Their ICO just happened on January 1st, 2018. The time you spend on figuring out how to buy it (post ICO) could be well worth it though. This is not a quick flip ICO coin! Right now, you have to go to one of the following exchange websites to buy it: IDEX, EtherDelta or RadarRelay. The developers of the coin are not focusing on getting it listed on exchanges right now. They’re developing the usage case for the coin. This is unlike a lot of the other coins that are ‘pretending’ to have great technology, but they are simply in it for the money, which I’m sure won’t last very long.

I used MyEtherWallet (MEW) to buy some Bloom tokens. You can transfer ETH from a non-ERC20 wallet, like CoinBase, into MEW before purchasing BLT. Again, this takes some time to get set up.

Bittrex and Gatehub are some of the other exchanges you may want to consider signing up for. I heard about these in 2017. Depending on what coins you want to buy, of course. Gatehub is ideal for buying Ripple! I tried to get on both of these, but there were some issues that I ran into, so I gave up on them temporarily. **Update: I was finally able to move forward w/ Gatehub – they require you to submit pictures of your passport though. This scared me a little bit, so I stopped w/ the signup.

To recap real quick, it’s better to decide what coins you want to buy first and then figure out which exchanges to buy them on. For example, I believe RaiBlocks (XRB) can only be purchased on BitGrail right now.

The COINCAP app on your phone tracks the value of every coin out there. There are a dozen other tracking apps out there. Since there are exchanges and coins all over the place right now, it can become hard to track the value of all of your coins. You can use an app called ‘Blockfolio’ to do this if you want, or you can just document everything on paper somewhere. Just be aware of what price you buy in at.

Coinbase has a nice app to download. To get the 2FA (2 Factor Authentication) to work, you need to download the Google Authenticator app on your phone. When it asks to get 2FA going, they will provide a QR Code. Scan it with your phone and it should open up Google Authenticator automatically to add the code for the exchange.

Final tips:

To save some money on the fees from Coinbase, you can buy/sell through GDAX. If you have a Coinbase login, then you automatically have access to GDAX since GDAX is Coinbase’s back-end. Do a Limit or Stop order on there (not a Market order) and there are no fees for the transfer. I would highly recommend leveraging the Limit orders since they aren’t subject to slippage. This is convenient when you are transferring one currency to another, especially to/from USD. GDAX can be a little confusing at first. I’d look on Google or YouTube for “How to use GDAX” and there’s probably lots of good info. available by now.

It took me awhile to figure out that Deposit/Withdraw is separate from Buy/Sell. There is a daily transfer limit ($10,000) from certain exchanges, like Coinbase, for Deposit/Withdraw. You can Buy/Sell as much as you want at anytime though. Keep in mind that the Deposit/Withdraw area of most exchange websites is separate from the Buy/Sell area. The Buy/Sell area is often called “Market” or “Exchange” or something like that.

A good hardware wallet to purchase in order to protect your coins is the Ledger Nano S if you start to get more into this. I have one that just arrived the other day, but I have no idea how easy or difficult it will be to use yet. However, I would only recommend a hardware wallet if you’re collecting more and more coins and gains and you’re paranoid about having the coins stolen – ie- if an exchange goes bust or gets hacked, which can definitely happen. Otherwise, you can just keep your coins on the exchanges (Coinbase, Binance, BitGrail, etc.) themselves.


Choosing an HSA broker


How can I choose the right HSA account?

Well, if you spend the right amount of time researching the types of HSA accounts closely, it can result in the difference, over a lifetime, of literally thousands of dollars of extra money. It all comes down 3 things:

(1) minimizing fees,
(2) maximizing interest aka APY, and
(3) maximizing investments

HSA accounts are a very under-researched corner of the market. Investors have few resources available to help them navigate the hundreds of plan providers that exist. HSA accounts have recently grown in popularity, but the lack of resources has likely contributed to their underutilization as a savings vehicle despite their valuable tax benefits.

-2017 Health Savings Account Landscape, Moningstar

There is a nice article that you can read ( on reviewing and selecting an HSA account based on one of two primary needs:

(1) Using an HSA as a spending vehicle to cover current medical expenses, or
(2) Using an HSA as an investment vehicle to save for future medical expenses.

Keep in mind that you can withdraw your HSA money for NON-MEDICAL reasons without any penalty after you are 65 years old. It will still be taxed though!

Essentially, what this means, is that if you plan to invest within your HSA account, it can effectively become another type of 401(k) or Traditional IRA account. This means that the money will go into the account tax-free and is later taxed when you take the money out!

So, assuming there aren’t any major medical issues until you’re 65, an HSA should be treated like another 401(k) account. Another thing to keep in mind is that as long as you keep your receipts from your medical expenses, you can reimburse your medical bills much later down the road. This can be 10-15 years down the road, after your HSA account has grown in value with the market! Of course, this all bears on whether or not you can afford to pay for medical bills out-of-pocket, after taxes, today, without tapping into the HSA account. This is not always very easy to do.

Wait a minute. Who can plan for not having any medical emergencies until they’re 65 years old? Beats me! I know I can’t. But that doesn’t mean the investment opportunity should be dismissed all together.

Now, if you withdraw the money prior to age 65 (for non-medical purposes), there is a 20% penalty for this. That is a huge penalty! It should be avoided at all costs. Of course, the primary point of an HSA is for medical purposes after all.

As a result of all this, I believe that some major consideration should go into selecting an HSA account in order to maximize the potential impact on the savings aspect for retirement. If you can invest the money, why not do it? Just be careful though, because one thing I’ve discovered is that every single time you offload money into an investment vehicle from your HSA account, you’ll be slapped with a $25 fee. Even if you’re transferring just $100 over to an investment account, it’s still $25, or 25%! A general rule of thumb with investing is that you should avoid paying high transactional fees. The total fees should be less than 1% of the overall transaction. On top of the $25 transaction fee to transfer money into an investment account (like TD Ameritrade), you have to pay a commission fee for buying a particular stock or security. This is typically around $7-10!

The downside is that it can be a real headache to research all of the HSA brokers out there. And there are a lot of options out there now that HSAs have been around for several years. If you’re looking to maximize the investment portion of your HSA account, my advice is to establish a base amount of money over several years first. These transaction fees can be pretty high, especially when you’re transferring small amounts of money…

Once you transfer money out of your HSA account and into an investment account, or if your HSA account includes investment choices already built into it, it’s really important that you have a good selection of funds to purchase. I can’t reiterate this point enough. For example, you might find an HSA account that offers no transaction fees to do the investments, but the investments themselves (often limited, unless you have a TD Ameritrade or other large broker account!) will have high administrative/management fees, along with high expense ratios. That’s right, it’s often an double-whammy when it comes to fees.

One study done by AARP back in 2011 showed that 71% of participants thought that they didn’t pay any 401(k) fees – something that simply isn’t true.

A few options are listed below:

-Elements Financial

-Health Equity (received high rankings

-Select Account

-Lively (recommended at a co-worker’s spouse’s workplace)

Along with these accounts, the following article has been a really helpful resource:

I recognize that everyone’s needs are different when it comes to choosing an HSA account. For some people, the investment part of an HSA won’t mean very much. I can see this being the case if you don’t plan on putting much money into the account, or maybe if you’re thinking you’ll be using your HSA regularly to pay for medical expenses. For others, the simple conveniences of having a debit card, maybe access to an additional Checking or Savings Account through an HSA would be important. Some HSA accounts offer automated receipt submittals, they have an app for your phone, etc.

My only word of caution would be to, please, look out for the fees.

I believe an HSA account should empower people to get ahead in life through leveraging the tax-advantaged savings aspect. If the fees are too high, the tax advantages go out the window. Please be careful with this. I know there are a lot of places that have high fees and they will readily take advantage of you, whether you know it or not. You may look at the fees as being a small thing today, but if you take into account the growth that could have been realized by not paying those small fees over the course of 10, 20, or 30 years, the difference can add up to thousands of dollars!

Top 5 Places To Invest in 2017

With strong conviction, I can say that we are extremely fortunate to be living in one of the most exciting times in history right now. I’ve become so passionate about some of the opportunities before us that I’ve lost considerable amounts of sleep in recent days. I’ve been researching and thinking deeply about investment opportunities, some of which I’ve already begun taking. I wanted to take a moment to share some of them with you, and to provide some of my own insights regarding where I think we’re heading in 2018 and beyond. Whether or not the majority of people realize it or not, we’re living in a very interesting time.
First of all, one could easily speculate that a war will take place with North Korea in the near future. Secondly, blockchain technology with bitcoin and other cryptocurrencies is improving and starting to take off. Transportation on Earth using electric energy and also transportation to/from outer space is dramatically improving. Not only through SpaceX and Elon Musk, but through the world’s richest person, the owner of Amazon, Jeff Bezos, who is heavily invested in space travel. Robotic technology and artificial intelligence is just now starting to take off in parallel with the Internet of Things (IoT) and the Industrial Internet of Things (IIoT).
I think it’s important to take advantage of the huge opportunities that lie in front of us in order to benefit financially, and there are a lot of ways that you can do it. In fact, not doing anything will hurt you. Healthcare costs are outrageously high in the United States of America. Pensions for retirement have disappeared. It seems that every direction you turn, companies and organizations are trying to nickel and dime people to death with monthly bills and services. This includes your cell phone bills, tv, utilities, insurance, car payments, etc. This basically means that people are now having to rely more than ever on their 401(k) accounts and IRAs (both Roth and Traditional) to retire comfortably. As a result, I believe it’s important to set goals for yourself, financially. If you don’t have a Roth IRA set up, for example, you’re missing out on a lot of tax free realized gains in the future. Even though there seems to be no end to the corporate greed in this country, rather than going against the grain and not investing in the markets with the rich and über-rich, it’s important to maximize your own exposure to it.
Here are the top 5 things you can do to benefit from this very interesting time in history. Each of these is listed from top down in the order that I believe will make you the most money in 2017.

1) Start buying cryptocurrencies.

For someone who doesn’t know much about Bitcoin and blockchain technology, cryptocurrencies can be very confusing. There are a lot of articles online these days trying to bring people up to speed with what they are and how they work. I spent $1,000 on some Bitcoin back in 2014. Today, it’s worth just north of $12,000. Just last week, I bought $1,000 of Ethereum (another type of electronic currency) and it’s already up to $1,400. Things are just getting started with this stuff. I think it’s safe to call this a high risk, ultra-high reward investment. I also purchased some Litecoin last week for the first time.
New to cryptocurrencies? Here’s a great article to bring you up to speed.
One exciting development was announced today by Microsoft regarding the improvement of the blockchain technology. The effects won’t occur until 2018.
 Don’t ever think that you’ve missed the boat with an investment. It’s never too late. But, you might be asking or thinking to yourself “How much should I invest… I don’t have very much money…”  Take this into consideration; One of my friends put $150 into Litecoin in 2014. It was $3 per coin. He bought 50 of them. At today’s value of $47.58 per coin, his $150 investment turned into $2,397. That’s a 1,500% gain in less than 3 years!
How can I get started? 
Here’s one way, which is probably the easiest and most popular method right now: Set up an account with Coinbase online.
You can get $10 of free bitcoin by using the link above. This will establish your own ‘wallet’, and I think it’s the best way to go. Diversify yourself as much as possible among all of the cryptocurrencies available on Coinbase. To make things even more exciting, let’s say that a developing country decided to standardize on Bitcoin or another cryptocurrency for their main currency. Prices will skyrocket! Banks are already viewing e-currency as a new way to do business. The possibilities are endless for this. Be ahead of the game and invest in it today.

2) Bet against the stock market.

I’ve said this before in 2014 and 2016, but I believe the market is still overvalued. Betting against the market is never a long term strategy that I would promote, but for the short-term, I think it is a very well deserved risk. If you’re always betting on the market going up, which is not a very bad strategy at all, by the way, you better have a pretty “boring” portfolio that is very diversified, and you better also be fine sitting on the sidelines when everyone else is taking advantage of the drop. Look at the chart below of the S&P500 to see how high it is. If you zoom in to the most current part of history with the S&P500, you can see that it appears to be stagnating a little bit.
Stability in global markets is fluctuating. Credit card debt has surpassed the record set prior to the 2008/2009 crisis:
So, how do you bet against the market? There are a lot of ways, but I might suggest leveraging a reverse ETF. You can read the following article to get an idea of some of the most popular bear market ETFs:
Betting against the market is a short-term strategy, and it is not something that I would ever suggest as a primary strategy for anyone. I believe that 80-90% of a person’s investments should be long-term.
How can I get started?
If you don’t already have an online account set up for buying stocks, that would be the starting point. There are a lot of options out there. You can even do it from your smartphone these days. Robinhood is a really interesting choice if you don’t have a lot of money. A standard choice would be Charles Schwab, TD Ameritrade, Ally Invest, or Scottrade. A really good one that launched in 2010 is Motif Investing, which I would also highly recommend. I had also been looking at Loyal3 in the past, which recently changed to FolioFirst, but it is aimed at IPOs, primarily. Another interesting one is iBillionaire, which allows you to set up investment patterns on a weekly or monthly basis for $1/month. There are new ways to invest that are coming out all the time. Again, I think we are living in an extremely interesting time in history. For more information on how to select an online broker (I’m not talking about your 401(k) account), please refer to my previous blog post here.

3) Buy real estate.

This is always a smart option. Always.
How can I get started?
Just do it. Buy a property. This is easier said than done since buying property or land typically requires a large amount of capital. The larger the down payment, the lower the mortgage payment is, which is something you will want to strive for in order to rent out the property successfully. With interest rates as low as they are today, hovering around 3.75%, this is still a no-brainer decision. If you can’t afford to buy a property or a second property and you’re not investing in stocks or anything else outside of your 401(k), then let me ask you this: Do you think large corporations can afford to buy half of the stuff they purchase? No. Do they make more money from their purchases with borrowed money, and are they successful? By and large, the answer is ‘yes’. Find a way to buy a property if that is what you are interested in doing. There are a lot of books on the topic, too!

4) Bet on the upcoming energy revolution.

This one gets me really excited. I had a major “ah-hah!” moment last week when a friend of mine posted something about buying an ordinary Apple laptop in 1997 for $5,700 and then trying to sell it today. How much do you think it would be worth? Well, considering it’s antiquated technology now and that nothing in particular was special about Apple’s laptops in 1997, if you put it up on eBay, it would go for roughly $50. That’s horrible, right?! Now, if you had put that same $50 in Apple’s stock, it would be worth well north of $330,000!
I was seriously considering buying a new Tesla Model 3 car and I had placed a pre-order for it late last year. And over the past couple of months, I’ve been shuffling funds around in preparation to pay for the car, wondering about the finance plan that will become available. $35k is a lot of money. At least for me it is. Well, now I’m really having second thoughts. I think that the $35k could be much better spent buying Tesla’s stock or putting it into something else (real estate, for example) as an investment, rather than buying a car that depreciates 30% the day you buy it. If Elon Musk’s predictions are correct that Tesla’s valuation as a company rises to $700B or $1T by 2025, that means the stock could be worth 12 to 17 times it is today. $35k would suddenly balloon to anywhere between $400k to $600k! In 8 years! That’s pretty amazing to think about. And it could really happen. A lot is riding on the success of the Model 3 right now. In fact, I’m very confident that it will be a popular car. I have a lot of friends who are skeptical, and they have a right to be skeptical since Tesla is operating on enormous amounts of debt. Even if the Model 3 isn’t successful at first…. for example, if the price is too high….. I’m confident that Tesla has the ability to quickly change their strategy. They would have to since they’ve invested a lot of money into the Gigafactory and they are looking at starting another Gigafactory in China. They have too much in the game at this stage and I can guarantee they’ll do whatever it takes to be successful, even if it means dropping their prices, which I doubt will happen. Elon Musk is a genius, and he also knows the importance of diversification, which is why Tesla is producing solar roof tiles and the Powerwall 2 home charging stations through acquiring SolarCity.
How can you get started? 
This is an answer I can’t provide directly since it involves more risk than I would ever promote, and it is not simply to ‘Buy $TSLA stock’, either. Although, if you support Tesla and Elon Musk’s vision, then owning $TSLA stock is of course not a bad idea. Bear in mind that it is severely overvalued today though. I believe there are lot of ways to benefit from the upcoming energy revolution. A large majority of people thought the energy revolution with solar power would arrive in 2007 and 2008 when that was actually just the global market testing the waters, planting seeds. If you had invested in solar stocks back then, you’d be hurting really badly. Nobody knows about the timing for these things, but I honestly believe that we are on the brink of a revolution and that Tesla will be involved. It was bad timing with the market crash in 2008/2009, and it was also bad timing with the government incentives and tax breaks that were swept away for so many corporations. It’s too early to know what will happen, but don’t be afraid to take some risk here. I believe it is well worth it. If you own a home and want to increase it’s value, consider installing electric service in your garage for an electric car. Even if you don’t plan on driving an electric car yourself, something as simple as that could have an enormous impact on the people who buy your house in the future! 

5) Keep your finger on the trigger for AI, IoT and Robot investments.

This is another interesting topic, which deserves a blog post all on its own. It’s too early to know what trends will emerge and what companies will be the main players, but I believe that Google, Apple, Facebook, Nvidia, Tesla and Microsoft will play important roles. Also, somewhat unrelated, but Alibaba and especially Baidu are companies to keep your eyes on. I’m a big fan of these companies.
How can you get started? 
Let’s see here… Ask me again in 1-2 years! 😂 Just be ready for this upcoming revolution and keep your eyes and ears pealed for people talking about this. In my opinion, it’s a little bit too early to place any types of bets on companies in this space, but I would be very curious to hear peoples’ thoughts here!

And the Bull Market Continues to Surge Forward w/ Full Force


As the stock market hits new highs entering new territory every other day, we really need to stop and ask oursleves two questions:

  1. If the stock market suddenly plunges, how long can I expect to wait before I can get back to these highs?
  2. Is my portfolio balanced correctly?

The first question requires us to look at the stock market’s history before we can even begin to guess on a time frame. As you can see from the chart below, if the stock market suddenly drops, we could wait as long as 9.5 years (until 2020) to return to the same levels, just as was the case between 1968 to 1977.  This, however, was the absolute worst case scenario over 80 years of history in the stock market! It’s not out of the question that something like this could happen again, but I think we should more realistically, at least based on modern-day history with the invention of computers and e-commerce, expect to wait 2.5 to 4 years (see years 1986-2012 in the chart below). I always like to add an extra buffer, so my final answer would be 5-6 years to rebound from a market crash.


If you cannot, or do not want to, wait 5-6 years to get back to where you are now, then it’s important to evaluate your positions. And this brings us to the second question: Is my portfolio balanced correctly?

It’s really critical to evaluate your entire stock portfolio while the market is hitting new highs. If you find that you own stocks that you can’t see yourself owning, or you think you may not want to own in 5-6 years, then now is a good time to consider reducing or eliminating those positions. Especially if you’ve already, at least collectively, made a profit off of them. Just make sure your portfolio remains diversified.

Portfolio allocations should be balanced across the 7 industry sectors; Basic materials, Consumer goods, Financial, Healthcare, Services, Technology and Utilities. If you are only invested in a couple of these industries, try not to favor any particular industry. For example, if you find that the majority of your money is invested between $GOOG (Google), $YHOO (Yahoo!), $FB (Facebook) and $TWTR (Twitter), you should consider reducing or eliminating some of those positions.

Keep in mind that it’s very easy to love your winning stocks while they’re winning. It’s even easier to hate them while they’re losing!

With an unbalanced portfolio, it’s very important to keep a close eye on the market. This is your only option. The only problem with this strategy is that it can take too much time and it can also be pretty stressful. Your money could be put on a rocky roller-coaster ride if you are overexposed to any one particular industry sector. To avoid this, you will want to re-balance your portfolio.

A few closing notes:

If you’re still on the fence regarding a 5-6 year time period, you’ll have to ask yourself what types of large expenses you’re expecting to have over the next 5-6 years…

Will you be going on any major vacations? Any weddings? Will you be buying a new house or a new car? Will you be having a new baby? Try to map out all of these major events, then add up the money and create a worst case scenario. If you think you can budget for this without taking away from your stocks during 5-6 bad years in the market AND your portfolio is diversified and you’re happy with how it stands today, then congratulations, you can sit back and relax. You’re on the right track! Don’t do anything. Laziness, or shall I say patience, often pays off tremendously in the stock market. To quote Warren Buffet: “Inactivity strikes us as intelligent behavior.”

For more information on how to find the business sector your stocks belong to, you can visit the Industry Browser site from Yahoo! Finance:

The 5 Best Investments for September 2014


Every other day we’re inundated with news on the ISIS terrorists, Ukraine vs. Russia, news about immigration reform, a mediocre jobs report; What’s next? Surely these horrible events would have an adverse effect on the stock market, right? Negative news after all results in fear and panic in the stock market. People should become fidgety and start selling off all of their stocks; It makes perfect sense. Wrong. Wrong. Wrong. Instead, the stock market continues to surge forward, and just like any other time, it’s not related to any one thing.

So what could be causing the market to continue moving up? Well, some of the experts have claimed that the reasons for continuous growth during all of this is obvious: The Fed continues to keep the interest rates low, which keeps bond prices high, generating more spending – boosting the stock market. A weak jobs report signals that people aren’t ready for the rate increases from the Fed, which propels the stock market even further.

But, what about the geopolitical tensions again? There are only hundreds of people dying from rocket launches and rapid fire assaults every single day, yet these headlines stay far away from the financial news… until… of course the market goes down! THEN these horror stories start making their way into the finance headlines.

In conclusion, it’s safe to say that negative news does not always result in market weakness. More than anything, when the market is high, it’s important to examine your portfolio closely to make sure it is healthy, diversified and safe. Be ready to welcome weakness so that you can add to your positions, too. And in order to add to your positions, or to create new ones, it’s important to have a strategy in place so that you can, at a bare minimum, have some money available before the market drops. Even if it means taking some of your profits off of the table now!

For a person in their 20’s or 30’s in America, with the market situation going into September 2014, I believe the best places to have your money right now is in five places:

1) Emerging markets (I’m a big fan of $EPI in India compared to the China ETFs)
2) Real estate
3) S&P 500 index fund (I like $VFINX for this)
4) High-yielding safe stocks (I like the dividend aristocrats and certain variants of the Dogs of the Dow)
5) Tech. and Banking stocks ($HPQ, $TWTR, $AAPL, $C, $WFC, $V)
As always, happy investing & don’t panic… too much… yet.

2014 First Half Bull Market


The stock market continues to present some incredible opportunities!  We are still in the middle of a very strong bull market.  Last month, the “Sell in May and Go Away” theory proved to be completely wrong. I discovered just how clueless even the professional investors can be. A lot of very smart people got it wrong! What did these people do after they discovered they had it all wrong? They didn’t sit around waiting to say “Ah hah! I told you so!”.  No, they made corrections to their portfolios, and they made them quickly. This is exactly how you have to invest when you’re focusing on the short-term, trying to time the market. It’s a game a lot of us with full-time jobs just don’t have the time to play.

While it’s probably not the best idea to go “all in” with the stock market right now, you shouldn’t be doing nothing at all. Buy in stages. Sell in stages. The fact of the matter is that nobody knows what will happen, but based on the pure technical charts of the Dow Jones Industrial Average and the S&P 500 index, we all know that we’re long overdue for a correction.

Unfortunately, I don’t have the time every day to analyze all of the individual companies I have in my watch list, but I do have the time to see which stocks have been trending up, which stocks have been trending down, and which ones aren’t moving at all. I also have the time to hear what other people have to say about the market while I’m driving to/from work every day.

Here is some of Jim Cramer’s most recent news:

From a short-term investment standpoint:

Last week: With the situation in Iraq right now, oil prices could get hit hard. Result: It’s better to sit on the sidelines than to put more money in the market. Even better to take profits if possible. However, as of 6/17, tensions may be easing due to a stronger coalition. 6/17 was the first day of positive news. The market continues to go up, which is similar to the market situation when Russia went into Crimea. The market caught wind of the actual situation over there before the media could get a handle on it and continued to climb as a result.

–The Fed’s news on inflation at 0.4% (the highest since 2/13) today should have a direct impact on the mortgage interest rates. When inflation goes up, interest rates go up, which means the bank stocks will go up. Higher rates mean more money for the banks as they can make more money. There are no bank earnings to be posted any time soon, which also allows more room for imagination (growth) within the financial banking sector.

Intel’s good news last Thursday (raised 2nd quarter and full-year sales outlook) caused a spike in Microsoft and HP stocks. They could continue to rally throughout the year.

More risky stocks right now: Tesla, Amazon

Less risky stocks: Google, Apple, Facebook

Cramer has a strong outlook for GWPH if you want to enter the marijuana industry as a speculative play. This company, GW Pharma, is a pharmaceutical company based out of the UK that has a solid foundation outside of its experimentation with marijuana as a drug for cancer patients. Their latest drug with THC, the active ingredient in marijuana, is being used to treat epilepsy. I’ve been watching the stock for about a month now, and compared to the other speculative marijuana stocks like FSPM and MDBX (there are a lot of penny stocks in this area), GWPH is rock solid and has continued to go up. Surprisingly, it was up 16.27% today on positive data related to its epilepsy drug.


My outlook:

Buy into the bank stocks: KEY, BAC, C, FHN, GS, HBAN, KEY, RF, STI, WFC, ZION (short and long term).

–These stocks rallied quite significantly today. They have been close on my radar for awhile now and they never go up more than 0.5%. Today, almost all of them surged 1% or more. They are all very low relative to their history and they have not come back to their “normal” levels like a lot of other stocks have. This could be an opportunity to make a lot of money as the housing market recovers. You would have to ask yourself whether you believe in a housing recovery or not.

Buy into AAPL, FB and HPQ (short & long term).

–Apple is going to release some new products, and Facebook, as well as Apple, is going to continue to kicking ass in China. Apple’s iWatch could be as popular, if not more popular than the iPad. Plus, rumors have been flying around about Apple entering the home automation market. This could be another game changer for the company.

Consider buying into TWTR and TSLA (long term). – Twitter recently let their COO go, which caused a slight boost in their stock – they’re working on their ads, and if the result is anything like Facebook, the stock will show more gains moving forward. Tesla’s CEO, Elon Musk, has been extremely wise in creating the right partnerships with the right companies (most recently Nissan and BMW for increasing their charging station base), knowing when and how much to get involved with politics, and most importantly he’s continued to prove everyone wrong. Everyone! Their Model X car will be released in 2015, and if it’s anything like the Model S, we have a lot to look forward to. The stock, on the other hand, is extremely overvalued. It’s not a good investment for the short term. Keep a close eye on it for a pullback if you’re interested in adding it to your portfolio. And if it doesn’t see a pullback after (a month, two months? – you have to define the time period) and you’re still interested in owning the stock, admit you were wrong, buy it and move on. Just don’t fall into the trap of thinking “the pullback’s not coming, so I’m not investing in it” mindset. If you believe in the company, its products and its future, you should do something about it.

Outside of these suggestions, it’s important, if not FAR MORE important to be investing regularly in the top 12 dividend aristocrats of the S&P 500 through a DRIP program in a Roth IRA and/or Individual broker account. Even small amounts are OK. Combine this with investments into the VFINX fund and you will be rich when you retire.


For me, personally, I have been experimenting with the information I’ve learned about the bank stocks, Tesla, Apple, Twitter, etc. to make profits in the short term so I can invest MORE in the S&P 500 dividend stocks for the long term..


Buying an investment property is another idea to take advantage of the lower rates and lower prices right now. I used to think this was impossible with the property prices in Chicago going for $200k+, but when I started looking further, there are locations where you can buy vacation properties (in CHICAGO) for $50k.

Regardless of where you are, it helps diversify your investments, it will go up in value over the long term, you can rent it out, and you can (most importantly) enjoy it on the weekends.


In conclusion, be cautious with your investment choices right now, but don’t do nothing. And if you’re just getting started and haven’t set yourself up with a Roth IRA account yet using a solid foundation of reliable stocks, that would be the first step. Open the account. It takes 10 minutes. It’s harmless and very easy. The next step is funding the account by linking it to your checking account / savings account. The final step is investing the money – where do you want to put it? Most importantly, take things into your own hands. You can do it.


Message me with any questions – I read every comment.

Selling Stocks: The Biggest Challenge


It’s always easy to buy stocks, but what about selling them? It’s a completely different ball game, and it’s not one you should be focused on unless you’re on the brink of retirement or you know you’ve made some mistakes in your portfolio. Nobody in their 20’s or 30’s should be focused on selling stocks unless they’re playing around or comfortable with gambling. And just as a quick reminder, gambling (ie – trading, aka – short-term) and investing (aka – long term) are not and never will be related.

First, let me reiterate the focus of Finance Rush: To help younger people establish their own investment strategy using a diversified range of stocks invested continuously for the long-term. With a dollar cost averaging strategy, you will almost certainly come out ahead of everyone else. Why? Because everyone else will be investing in the wrong stocks within the wrong mediums (401(k) for example).

With that said, it’s completely appropriate and natural to try to time the market for buying and selling. It’s also natural to become fearful and greedy with your investments. I always like to refer to Warren Buffett on this:

Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.

When the market crashes, it’s easy to get fearful and to think you’re suddenly losing all your money and that you won’t get it back. My father, and God bless the poor man…, became extremely fearful with his money when the market crashed in 2008 and he ended up pulling everything out. It wasn’t such a bad idea at the time… for him. He was about to retire, he had placed too much trust in the market, he was unhappy, and he didn’t want to lose everything. In some ways you can’t fault him at all. Thankfully, he put it all back in with another broker knowing that he wouldn’t need to spend the money in the next 5-10 years.

Just remember that when one of your stocks or the market as a whole experiences a significant drop, hold onto your emotions and stay focused for the long term. Laziness is your best friend in these cases. You need to ask yourself if you still believe in the stock(s) you chose (which you should 100%… otherwise you never should have bought them in the first place), and you also need to ask yourself whether you can wait for the market to come back up again.

Everybody makes mistakes. One trap I fall into regularly is the failure to admit the times I’ve chosen a loser stock. Take OSG (Overseas Shipholding Group) for example.  OSG received excellent reviews in early 2012. When the stock started to decline, I couldn’t help from thinking “buy more!!” the whole time. There wasn’t any bad news being released, so I became more and more anxious and I constantly wanted to buy more and more! Later that year, the company announced they were hiding losses in their earnings reports, and as soon as the public heard about this, the stock took less than 2 months to plummet to zero. The company went bankrupt. I should have sold everything off, but instead, my emotions got the best of me. I honestly thought the company was too big to fail and that the stock would come back up. Hah! I was dead wrong. But you can bet I learned a lot from it.

$WTW (Weight Watchers) is another example. It was poised to be the “next big thing” in 2013 with their weight loss 360 program being advertised all over during the SuperBowl. The CEO wasn’t getting very good reviews at the time, but I still ended up buying a considerable amount of their stock in January 2013.  Soon after, a news story about another weight loss company had a major effect on $WTW and the stock started to drop very quickly. Then when the CEO left, it spiraled down and down again. I held onto it longer than I should have, but I used OSG as a reminder and sold around $37/share and again at $33/share while it was still dropping. Today, the stock is selling around $22/share compared to its $80 highs. Will it go back up again? It sure could!! Should you take advantage of the low price to buy now? The question instead should be whether you fundamentally believe in the company compared to all of the other companies and options available for the same thing. I used to believe in “weight loss” and $WTW was very visible in the market at the time. The company’s program was being adopted in the business world, and everyone in America was getting fatter and fatter. It made perfect sense, and I truly believed in their business model. Several months after owning the stock, I started realizing how many ways people can lose weight using free apps on their phones, taking pills, going on diets, exercising on their own, etc. Suddenly the company’s products & services weren’t nearly as attractive to me.

In summary, don’t panic when the market is crashing. Look at a market crash as another investment opportunity and not as the time to take all of your money out. Selling should be done while the market is high, not while it is low. It’s never a bad idea to take profits off the table to invest in another safe stock you believe in more. And lastly, if a stock or the market as a whole is crashing or about to crash, try to have some money available (outside of your dollar cost averaging strategy of course) to buy in to the market. So, rather than being focused on selling, be focused on what to buy next!

4 Ways to Hedge Inflation: Roth IRA, Gold, Dividend Stocks, Real Estate


Inflation is an exciting topic for me. It highlights the #1 reason why people should be investing their hard-earned money in stocks. Well, pretty much anywhere but a checking account or a savings account right now.

First of all, what is inflation… and how does it happen? — According to Investopedia:

Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

The more money in the hands of people means there are more purchasers, in other words, demand is more and more…BUT the supply is less and production is less. So inflation takes place. Prices rise because everyone has the money and they are ready to pay more, and those who don’t have the money suffer (ie – your savings account!).

I never used to worry about this until a few years ago when I realized I had accumulated my first $10,000. It was sitting inside a checking account. I knew the chances of needing to USE that money in the next 5-10 years were slim since I already had a steady job and I was continually saving money, so I started talking with some friends about investing, learning about online broker accounts, etc., and that’s when I first got started. Specifically when Visa had their IPO in 2008.

The reality of inflation didn’t really hit me until I saw a chart on inflation vs. investing. (See below again, or refer to my previous blog post on the topic here.) The only reason I bring this up is to help others get started with investing on their own, because if you’re not investing, you’re losing money to inflation, and that can never be a good thing.

Thankfully, the central bank (the Federal Reserve) helps to stop severe cases of inflation, and they will usually try to maintain 2-3% inflation increases per year through using what’s known as ‘inflation targeting’. The Federal Reserve will do this through using monetary or fiscal policies. Bank rate policy is an example of a monetary policy, which happens when interest rates for loans to commercial banks increases. So,,, when inflation starts to get out of control (typically after the government prints a lot of extra money, which is what just happened in the USA and what just now recently happened in Japan), the central banks will increase the borrowing rate for loans to commercial banks. This is known as a ‘dear money policy,’ where ‘dear’ means not easy to get, or costly. The commercial banks are then suddenly less likely to give loans to people, reducing the flow of money to the public.

If it’s harder to get money because of the banks, people aren’t going to buy as much stuff, and the demand will go down, driving prices down, helping to reduce inflation.  This is great!

But it isn’t happening…. yet. Instead, recently, rates have dropped so low that it’s becoming really attractive to get loans from banks (house loans, for example). And these rates are low on purpose; The government wants people to borrow more money to stimulate the economy. In fact, in September 2012, the Federal Reserve stated that these rates will likely remain low until mid-2015. And when the central bank injects $85 billion dollars per month into the economy, the money will of course eventually reach the people, who will then use it to borrow more money, etc.

The point I’m getting at is that WHILE it’s much easier and more attractive to borrow money right now (inflation), it’s very difficult to grow your savings with a bank since the APY (annual percent yield) rates for savings accounts and CDs (certificates of deposits) have dropped so dramatically over the past 5 years (from 6% to 0.5%), which parallel the low rates for Treasury securities. The government doesn’t want you to save money when inflation occurs, they want you to spend it!

Well, let’s fight this inflation together and let’s invest our money wisely with 4 things: A Roth IRA, Gold, Dividend Stocks and Real Estate.

Before I get into these 4 separate categories, let me provide a quick summary of my thoughts on how to (in general) invest your money right now. My answer is always to diversify your money across multiple areas using dollar cost averaging. In other words, I would suggest not just looking into stocks, but also looking into gold, index funds, CDs, bonds, and real estate. There’s a time and place for all of these though, and I would never suggest putting all of your eggs into multiple baskets at once. Start with one basket if you need to or don’t have the time. And start small if you have to. Just don’t put everything in it!

With there being a correct ‘time and place’ for everything, I came across an interesting article about the upcoming inflation (or deflation!), especially with regard to Japan’s recent news (see below). And I think that if you had to choose one or two places to put your money as a starting point right now, I would choose dividend stocks within an index fund, within a Roth IRA. Just keep an eye on the averages. Gold is the next best investment, along with real estate.

Protecting Yourself From Japanese Insanity 

And for somebody who is first getting started, I think it’s important to start with a solid base (ie – $10,000 or more, if possible) and then to add incrementally onto this over time. If you don’t have that much money, that’s also not a problem!! – and it is certainly NOT an excuse to further procrastinate toward getting started.

All of this can be really overwhelming, and a lot of people don’t think they’re capable of taking things into their own hands. The excuses I hear again and again and again (and again) are:

  • I don’t have the time.
  • I don’t have enough money.
  • It’s too risky.

These are all horrible excuses, and let me tell you why!

  • I don’t have the time.

If you don’t have the time to make yourself $1 million+ dollars over time, you can always pay somebody else to do it for you, but you will be wasting your money when you can easily do it yourself. Whenever people complain about not having enough time, they will also complain that it’s too difficult, or that it takes too much effort to research the stocks, etc. The other excuse related to this is “I don’t have the interest to do it.” In fact, one of my smartest friends insists that paying his financial advisor is much better than doing it himself because he doesn’t have the time and he doesn’t think it’s worth the effort. It’s very sad, but I can tell you that it’s NOT very difficult to do this yourself, and it certainly isn’t rocket science. Most financial advisors will charge 1% on top of the fees being charged for the funds in your account. The advisor also has a lot of other clients and although they may be convincing enough to claim they have your best interest in mind all of the time, they do not. Only you do. And if you can take care of it yourself (again, very easy to do), you will save thousands of dollars a year that can be put back into your investments and compound over time. How much can you save? Let’s assume that your advisor does a terrific job and grows a $500,000 account by 10 percent per year. After ten years, you’ll have paid the advisor $83,000 in fees and your account will be worth $1,172,867. However, if you handled it yourself, without paying the 1 percent, you’d have $1,296,871, over $124,000 more than with the advisor. So it’s not just the $83,000 in fees that you’re paying. That $83,000, when put to work, turns into an extra $41,000.

[Excerpts above taken from: Why You Should Fire Your Broker]

  • I don’t have enough money.

Again, a horrible excuse. Unless of course you don’t have a job and you really can’t manage your money – in other words, you’re a shopaholic, you have debt problems like nobody’s business, you don’t have any common sense, and you’re generally not interested in money at all. If you don’t fall into any of these categories, or you really would like to begin with changing things, you can start by cutting back on some expenses, and there are several online resources to help. How about seeing if you can reduce your monthly bills? (cell phone, internet/cable, etc.), check out Or how about saving in general? – here’s a great website to help with that!! Saving money doesn’t need to be painful. You don’t always need to sacrifice that cup of coffee you’re buying every day, either. A great resource for finding a side job to bring in an additional $1,000 per month is Ramit Sethi’s Earn1K course:

All it takes to get started with investing is $100 extra per month, and you can treat it like another bill. Just $100. Money that is invested or allocated automatically is money you never see in the first place. And it’s important to pay yourself forward FIRST in order to get ahead with growing your money, and I strongly believe in that.

  • It’s too risky.

This is perhaps one of the best excuses from people who are trying to time the market, or from the people who have a small time horizon to invest, in other words people who are 60+ years old. Based on the [Stocks, Bonds, Bills and Inflation Yearbook] chart above, you can see there are periods in history where stocks have dropped and didn’t recover for 7+ consecutive years. So I agree that it’s too risky if your timeline is only 5 years. In fact, I would only suggest investing in stocks if you can keep your money in the market for a minimum of 10 years. Warren Buffet once wrote, “Inactivity strikes us as intelligent behavior”, and there is a reason why he said that. Because it’s really important to be patient! So, if you’re trying to time the market, you are going to fail. But if you’re trying to maximize your savings over the next 10+ years, then it is NEVER a bad time to begin investing, and there are really no excuses. This is also where dollar cost averaging comes into play, buying continually over time to avoid buying at the wrong times. And in this case, it’s important to avoid your own emotions, investing more money when you think the market is at an all-time low, or investing less when you think the market is at an all-time high. I have problems with this. There are exceptions, however, especially during recessions when you are 100% confident that everything is “on sale”! It’s really funny though, because I’ve known people who will insist that investing in the stock market is TOO RISKY, yet they’ll blow hundreds of dollars in a casino in Vegas!

Getting back to the 4 ways to hedge inflation, A Roth IRA, Gold, Dividend Stocks and Real Estate, I will summarize each with a brief description, along with some of my thoughts & suggestions:


You can open up a Roth IRA with an online broker (see my post on online brokers here), and it really isn’t that difficult to do. In fact, if you haven’t already, I would suggest opening a Roth IRA as soon as possible. (There are a few more days to contribute to a 2012 Roth IRA before April 15th, and if you can do it NOW – it’s worth it, because you’ll be able to increase your long-term savings by several thousands of dollars as opposed to waiting another year.) I used to hear great things about Roth IRAs back in college, and there was a lot of information going around about tax advantages, which I didn’t quite understand. Moreover, I didn’t care to know any of the details since I didn’t have many financial responsibilities or a full time job. I always thought a Roth IRA was a place to put your money where you could walk away from it. Opening up a Roth IRA account was a complete mystery.

Well, after you open a Roth IRA (several sites will make this very easy… you just have to sign up first – it takes less than an hour) – and you can send me an e-mail if you want – I can help you get started – there is 1 very important next step:

Find out where to put your money!

Just putting it into the Roth IRA is not enough. I made this mistake and I always laugh when I look back…

You will need to allocate your money into stocks, mutual funds, index funds, etc. within your Roth IRA account. I would suggest reliable dividend stocks (see my previous blog post below), but if you want to take a very lazy and safe approach – then you could always invest everything into the Permanent Portfolio (PRPFX), which would give you a very nice blend of stocks, bonds, cash and gold for a “fail-safe” portfolio. There are also a number of ETF (exchange traded funds) that could help put you ahead of the game while still being safe and reliable: 7 Funds to Own Forever.


A great place to buy gold is within a Roth IRA or another investment account through the fund known as GLD. There are other funds as well, and you can also buy gold directly from a bank if you want. Gold is a very safe vehicle for protection against inflation, and it’s especially successful during recessions. If you really think the economy is recovering, or if you really think that having your money in stocks is the better investment, then gold might not be the best solution, but let’s face it: Nobody, not even the experts, can predict what will happen in the future. Because of this, I think it is always important to have some gold in your portfolio, and it’s even better if you can add this to your portfolio when you first get started!


I love dividend stocks – and I can never get enough of them. There is so much proof that reliable dividend stocks come out ahead. The strategy to investing in dividend stocks is simple – buy a bunch of safe stocks (blue chip) that have reliable dividends (15+ years of increasing payout dividends) and hold onto them. I would go with the ‘Dogs of the Dow’ strategy, or even better, you could use the top 10 stocks in the S&P 500 as the ‘Dogs of the S&P 500’ strategy. A quick search on Google will give you plenty of information on this. I’m a huge fan, but I also think it’s important to stay away from unusually high dividends, since this is usually a sign that something is going wrong with the company. If you do buy into some high dividend stocks (NLY, PBI, CLMT for example), and there’s nothing wrong with doing this, just be prepared to keep a close eye on them, and try to find out why their dividend is high and how long it has been high. Don’t just jump to a conclusion after reading 1 article on the internet. EH – FAIL. Never do that.

I’ve written about this several times in the past, and I’ll continue to write about this, but never underestimate the power of reinvested dividends. The effect of compound interest is incredible, especially when you continue to do it for 10+ years. Look into DRIPs (dividend reinvestment plans) with your online broker to reinvest the dividends automatically. This type of program is usually free, and it’s very easy to do. Reliable dividend stocks can be in your Roth IRA, or pretty much any investment account you own.


Right now is a GREAT time to buy a property, or a second property if you already have one. I’m considering “refinancing” to take advantage of the lower rates myself, and there is a lot of news going around about a housing recovery. I’d like to restructure my loan to get out of my FHA loan and into a conventional 30 year fixed. The problem is that my property is worth less than when I bought it, which means I will need to pay the difference. But, I think it would be silly to NOT take advantage of the lower rates right now. I also think the housing prices will start to rebound very soon.

If you can’t buy a property directly, that’s completely understandable. REITs (real estate investment trusts) are great ways to invest in real estate through your Roth IRA, Traditional IRA, or just about any other investment account.



Dividends for Breakfast


I bought a coffee at Dunkin’ Donuts this morning, which has pretty much become my daily routine recently. I always used to feel bad about spending money on coffee and other foods like this, and I always used to be a penny pincher like my parents. Then I did a calculation.

In March, I made an average of $4.50 per day in dividends.

In February, I made an average of $8.56 per day.

In January, I made $11.00 a day in dividends.

And that had nothing to do with my stocks going up or down. It all depends on the month, but I think you get the point.  This free money is free money.  That is, of course, before the 15% capital gain tax, but even with the taxes, it makes me feel a lot better knowing that I’m making enough money to pay for my coffees every day!

The great part is that it doesn’t require a whole lot of principal to enjoy the benefits of these dividends. The more money invested, the higher the dividend payback is, but even if there isn’t much principal, I believe everyone can still enjoy dividend gains over time.

Finding the right portfolio isn’t very difficult, but it does require a little bit of time. Here’s a great site for some good dividend stocks: 

Best wishes to everyone!

Picking a Killer Stock Portfolio – The Best Stocks for 2013 and Beyond


Just like everyone else, I love reading stories about the “best stocks” or the “hottest stocks” out there, and I don’t think you can beat the excitement of the ‘Top 10 Stocks for 2013’ articles.  I also love when the experts put price targets on certain stocks – as if it’s somehow destined to go to that value.  At the same time, it seems like we’re constantly inundated with news on the trendiest, most volatile stocks, which only adds to the excitement.

But are these stories really true?  And how well do the stocks in these articles compare to the average?

Unless the person writing the article (or your financial advisor) is a genius & you truly believe it, I think it’s really important to take everything with a grain of salt.  *Take special note that EVEN if someone is a genius, it’s still impossible for them to predict what will happen in the future.  I, on the other hand, know exactly what is going to happen in the future since I am a genius.  And I also created a special time machine to guarantee I won’t make any mistakes.  It really works:

Seriously though, it can be really hard to hold off on buying risky stocks, especially when the stock market is in the middle of a rally.  It’s like standing in a casino next to a group of slot machines that start paying out large wins to everyone who’s playing.  The area gets noisy with excitement.  A crowd appears, and people start making even more money, and this continues to happen for a while.  You’re suddenly thinking to yourself, “This is crazy!”.  An old woman smoking a cigarette cashes out and suddenly walks away.  –Since when does that ever happen?!–  You’re standing right next to her seat.  So, the question is – Do you sit down and play, or do you walk away to play another slot machine in the corner?  I think it would be stupid to ignore the excitement (how can this be happening?!), but I also think it would be important to remember that slot machines are designed to make the casino money, and not you.  Impulsively, however, I would definitely sit down!  With a bigger picture in mind, I would limit the amount of money I put into the slot machine and I’d force myself to make a strong decision on when to stop.  This would take a lot of self-discipline though.  But, I’m extremely self-conscious of the fact that you can WIN big just as easily as you can LOSE big, and losing big far outweighs the psychological effect of winning big, at least for me.  ESPECIALLY in a casino.

Maybe this was a horrible example since the stock market is far from being a casino.  But I think you get the point: It’s better to be a part of a rally, at least in a small way, than to just sit on the sidelines blinking mindlessly.

When I first started to research stocks 5 years ago, I came across an article on MSN Money for the Top 10 Valentines Day stocks that year, and they went on to say how their yearly picks continually beat the average.  They provided some facts on the fundamentals of the companies, etc.  I ended up falling for the advice in the article hook, line, and sinker.  On a side note – I always love the disclaimers at the end of those articles stating how the author doesn’t hold any positions in any of the stocks that were mentioned.  Ha ha.

Well, at the end of the day, I think it’s important to (1) Not believe in a single source, even if you really think it is trustworthy – IT’S GENIUS!, (2) Not get completely caught up in all of the excitement around you – JACKPOT!!!, and to (3) Realize all of the facts around you – THESE ARE STOCKS, NOT CASINOS.  The stock market will definitely pay off if you invest in the right stocks carefully, but…. what the heck are those stocks anyway?  Some might argue that it’s better to invest in a low-cost index fund that tracks the Dow, or the S&P 500, since it’s impossible to predict what will go up/down/etc., but I think this type of investment is far better suited for a 401k account, or within an IRA account.

The goal here is to provide a killer stock portfolio while remaining neutral to what the market is currently doing.  The stocks below are intended for the longer term, and there is no way they’ll be anywhere as exciting as the trendy technology stocks right now, such as Netflix (NFLX), LinkedIn (LNKD), Apple (AAPL), Facebook (FB), Google (GOOG), Nokia (NOK), or Zynga (ZNGA).  The stocks I’ve chosen provide reliable (20+ years) increasing dividends, and none of them have gone significantly up or down throughout their lifetime, either, which is a good thing.  I also made some effort to select companies with household names, which means it’s easier to keep track of what they’re doing, and I’ve also made sure to provide enough diversity across multiple industries.  Bear in mind that these are slower moving stocks, however, so you won’t get any huge wins in the short-term.  These are a lot safer so that you won’t need to worry about huge losses (or gains).  10-15 years from now though, you can look back and smile, just not tomorrow.

**Note: All of the information below has been taken from Google Finance and Yahoo Finance**

(LLY) Eli Lilly & Co., 3.65% Dividend

Eli Lilly and Company discovers, develops, manufactures, and sells products, in one business segment, pharmaceutical products. The Company also has an animal health business segment. It manufactures and distributes its products through facilities in the United States, Puerto Rico, and 15 other countries. Its products are sold in approximately 130 countries. The Company’s products include neuroscience products, endocrinology products, oncology products, cardiovascular products, animal health products and other pharmaceuticals. The Company’s new molecular entities (NMEs), which are in Phase III clinical trial testing include Dulaglutide, Edivoxetine, Ixekizumab, Necitumumab, New insulin glargine product, Novel basal insulin analog, Pomaglumetad Methionil, Ramucirumab, Solanezumab and Tabalumab. In February 2012, the Company acquired ChemGen Corp. On July 7, 2011, it acquired the animal health business of Janssen, a Johnson & Johnson company.

(JNJ) Johnson & Johnson, 3.23% Dividend

Johnson & Johnson is a holding company. The Company, along with its subsidiaries, is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. The Company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. During the fiscal year ended January 1, 2012 (fiscal 2012), the Company’s subsidiaries operated 139 manufacturing facilities occupying approximately 21.8 million square feet of floor space. Within the United States, eight facilities are used by the Consumer segment, 10 by the Pharmaceutical segment and 34 by the Medical Devices and Diagnostics segment. In June 2012, the Company acquired Synthes, Inc.

(CVX) Chevron Corporation, 3.11% Dividend

Chevron Corporation (Chevron) manages its investments in subsidiaries and affiliates and provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in petroleum operations, chemicals operations, mining operations, power generation and energy services. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by international oil export pipelines; transporting, storage and marketing of natural gas; and a gas-to-liquids project. Downstream operations consist primarily of refining crude oil into petroleum products; marketing of crude oil and refined products; transporting crude oil by pipeline, motor equipment and rail car, and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.

(GE) General Electric Company, 3.38% Dividend

General Electric Company (GE) is a diversified technology and financial services company. The products and services of the Company range from aircraft engines, power generation, water processing, and household appliances to medical imaging, business and consumer financing and industrial products. It serves customers in more than 100 countries. Its segments include Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions and GE Capital. Effective January 1, 2011, it reorganized the Technology Infrastructure segment into three segments: Aviation, Healthcare and Transportation. In April 2012, GE Healthcare acquired SeqWright, Inc. In May 2012, GE Healthcare, the healthcare business of GE, acquired Xcellerex, Inc., a supplier of manufacturing technologies for the biopharmaceutical industry. In June 2012, GE Healthcare acquired XPRO. In August 2012, it acquired PRESENS. In December 2012, the Company acquired 19% interest in Morpho Detection Inc.

(T) AT&T Inc., 5.10% Dividend

AT&T Inc. (AT&T) is a holding company. AT&T is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services and long-distance services. AT&T operates in four segments: Wireless, Wireline, Advertising Solutions and Other. Its Wireless subsidiaries provide both wireless voice and data communications services across the United States, and through roaming agreements, in a substantial number of foreign countries. Wireline subsidiaries provide primarily landline voice and data communication services, AT&T U-verse TV, high-speed broadband and voice services (U-verse) and managed networking to business customers. Advertising solutions subsidiaries publish Yellow and White Pages directories and sell directory advertising and Internet-based advertising and local search. AT&T’s Other segment includes customer information services (operator services) and corporate and other operations.

(LMT) Lockheed Martin Corporation, 5.23% Dividend

Lockheed Martin Corporation is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration, and sustainment of technology systems and products. The Company also provides a range of management, engineering, technical, scientific, logistic, and information services. It serves both domestic and international customers with products and services that have defense, civil, and commercial applications, with its principal customers being agencies of the United States Government. It operates in four segments: Aeronautics, Electronic Systems, Information Systems & Global Solutions (IS&GS), and Space Systems. During the year ended December 31, 2011, the Company acquired QTC Holdings Inc. (QTC) and Sim-Industries B.V. In November 2012, the Company acquired Chandler/May, Inc. In December 2012, the Company acquired CDL Systems Ltd.

(KO) The Coca-Cola Company, 2.63% Dividend

The Coca-Cola Company is a beverage company. The Company owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. It owns and markets a range of nonalcoholic sparkling beverage brands, which includes Coca-Cola, Diet Coke, Fanta and Sprite. The Company’s segments include Eurasia and Africa, Europe, Latin America, North America, Pacific, Bottling Investments and Corporate. On December 30, 2011, it acquired Great Plains Coca-Cola Bottling Company in the United States. In December 2011, it acquired an additional minority interest in Coca-Cola Central Japan Company (Central Japan). In September 2012, it acquired approximately 50% equity in Aujan Industries’ beverage business. In January 2013, Sacramento Coca-Cola Bottling Company announced that it had been acquired by the Company.

(VZ) Verizon Communications Inc., 4.64% Dividend

Verizon Communications Inc. (Verizon) is a holding company. The Company is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates in two primary segments: Verizon Wireless and Wireline. Verizon Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States. Wireline’s communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance and other services. In April 2011, Verizon acquired Terremark Worldwide, Inc. (Terremark). In August 2011, it acquired CloudSwitch. In March 2012, Verizon Wireless purchased the operating assets of Cellular One of Northeast Pennsylvania from United States Cellular Corporation. In July 2012, it acquired HUGHES Telematics, Inc.