December ended up being a great month for me professionally, financially, spiritually and creatively. This month I've been introduced to options and I'm crazy excited about what I'm learning. I have a few months to go, but hopefully I'll start to integrate those ideas into my posts and monthly picks. Another thing I am excited about is the XOM direct stock purchase program I enrolled in about a week ago.
Here's what I bought this month:
12/27/2011 - ExxonMobil (bought through ComputerShare, still waiting to confirm the price)
Here is the performance of my stocks picks from inception up until now (including dividends):
Dominion, up 12.3%
Aflac, up 21.3%
Flower Foods, up 1.5%
Costco, up 4.6%
CVR Partners, up 8.5%
Apple, up 3.6%
Brookfield Infrastructure Partners, up 1.5%
Terra Nitrogen Company, L.P., up 16.9%
Vodafone, down 5%
December's greatest hits include:
I learned about simulated DRiPs and where one goes to purchase stock directly from the company. A story about a snot-nose freeloader inspired me to take matters into my own hands and jump into a DSPP with the largest publicly traded company in the world. I admitted to suffering from a compulsive disorder and received some comforting advice from wolfman225. I also engaged in a debate with HarryCarysGhost about whether bills are good or evil. Although I may not have won the debate, I did manage to trick Harry into revealing his plan, from which I'll likely steal a good bit for a plan of my own. And I hit an 80-rating for the first time on CAPS. [more]
One of my guilty pleasures is watching a show called "The Soup" (owned by NBCUniversal, which is owned by Comcast Corp (NASDAQ:CMCSA)). It's a cable program that gather clips from the previous week across the vast ocean of television and presents them in a humorous way. One of the programs they often feature is called "My Strange Addiction" on TLC (owned by Discovery Communications, Inc. (NASDAQ:DISCA)). I've never watched that show, but I can guess what it's about. Some of the "addictions" they've shown on The Soup are: woman eating rocks, woman who bathes in bleach and woman who caries urn around and eats the cremated remains of her husband. After reading the episode lists, I learned that they generally don't deal with actual addictions rather they focus on people with compulsive and/or strange behavior.
Although the content of the program seems gratuitously shocking, the premise is what piqued my interest; for I suffer from a strange addiction: I am addicted to paying my bills. Earlier this week after HarryCarysGhost admitted that the one bill he looks forward to paying is the check he writes to himself (in the form of quarterly stock deposits), I revealed that paying bills gives me immense pleasure - unfortunately it seems to be the case only with my bills. When bills sit on my desk unpaid, it makes me extremely anxious and uneasy until they're taken care of. When I send off a check and update my Quicken software, I get a euphoric sense of accomplishment. I wouldn't think this behavior was anything but normal except most of my friends and family despise when a bill arrives. I often hear them complaining about the relentless frequency of bills whereas I look forward to checking the mail and finding a bill from my water company.
My wife and I are not rich nor do we live off a trust fund. We work hard, spend within our means, pay our taxes and try to avoid debt. I'm not certain if these are the ugly symptoms of my condition or possibly the root cause, but my strange addiction has recently taken a turn for the worse. After paying off my student loans, credit cards, my wife's engagement ring and my car, I've begun paying bills that do not exist. I found myself treating my periodic stock investments as if they were bills (like Harry's quarterly KO payments), squirreling money away for retirement on a regular basis and making car payments for a vehicle we don't intend to buy for another five years.
I can't help but think that my attitude towards bills would change if my wife or I were to lose our jobs, or if we decided to have children. So I'll enjoy this "immense pleasure" while it lasts and type up this blog post to remind myself if ever this strange addiction becomes the dark loathing that afflicts my friends and family. I have casually considered contacting TLC about appearing on their show, but I'm afraid the American viewing public would not be able to withstand the bizarre horror that is my strange addiction. [more]
A couple of years ago I had an unexpected house guest show up for a visit. He was a friend of a friend's teenage son so I felt obligated to accommodate him. He's a nice enough kid, but to be honest, he was a bit of a knucklehead. His mind always seemed to be on the future, never on where he was nor what he was doing. Basically he was reckless. He even managed to drive his car into a lake near my house (he was probably texting his girlfriend). I didn't want to be too hard on him because his parents had passed away while he was very young and his aunt and uncle were raising him on their farm.
Living a sheltered life out in the sticks, I got the impression that he was babied too much by his aunt and uncle. He had grown accustomed to having people do everything for him. My goal was to get him to unlearn those habits, gain some confidence and become a little more self-sufficient. I set up a regiment of chores and odd jobs for him to do. After a week or so he got wind that his buddies were getting arrested or were in some sort of trouble with the law. He wanted to go try to help them, although he had yet to get his vehicle out of the mucky lake where he parked it upon his arrival. Here was an opportunity for him to do something for himself, I thought. If he wanted to take off to hang out with his friends, then he himself was going to have to rescue his car from the lake. Unfortunately he decided that he couldn't pull his car out of the water because it was "too big." I had given him a winch and pulley to use so the size really didn't matter, but he had already made up his mind that it was "impossible". At the end of the day, he was just whining and gave up because he knew that someone would get his car unstuck for him. Of course that someone was me. I got his car out without so much as a "thank you" and off he went. Kids these days!
My latest intention is to find a company for a monthly direct stock purchase program with dividend reinvestment. My target: a company that reliably pays a dividend, grows slowly but surely and will still be around when I'm ready to retire.
Before I started investing , I used to imagine what sort of companies I'd buy. I'd dream about investing in a tiny company who quickly grows unbelievably large, making me incredibly wealthy in no time. In those days I had no idea about how to evaluate stocks and my belief was that companies who were on top of their industry or were super large only had one direction they could go: down, which made them unwise investments. The energy sector seemed like an industry that had longevity, but I would consider only smaller oil and gas companies and avoid the giants. Thinking back to my failed attempt to help that bratty orphan, I may have actually learned something myself.
My stock pick for this month and choice for DSPP+DRiP is the ExxonMobil Corp (NYSE:XOM). Exxon was split off from John D. Rockefeller's Standard Oil company back in 1911 by the US Supreme Court through an antitrust case. The new successor company initially called them self "Esso," but the government thought that that was too close to the initials of their parent so they changed the name to Exxon (you can find "Esso" stations overseas). Exxon merged with Mobil in 1999. They currently produce the most natural gas worldwide and they are the largest publicly traded company in the world with a market cap of over $400B. When I was young and reckless I though investing in this type of behemoth was like betting on a dinosaur to live through the ice age. As the world's thirst for oil continues and the potential for natural gas grows, I am changing my tune for ExxonMobil.
Lately there has been a lot of exciting news about oil and gas companies spinning off their pipelines, e&p operations and refining capabilities; yet ExxonMobil quietly lumbers along, performing all the tasks to get oil from the well to the pump. Adventure, exitement... I crave not these things. [more]
Last month I created a blog post while considering a direct stock purchase program and dividend reinvestment. I asked readers to share tips or advice regarding DSPP and DriPs. What followed was a flurry of helpful comments which you can find here.
The discussion left me with a lot to consider.
For example, the company I was initially interested for the purposes of a DRiP was Diageo (NYSE:DEO), which can be purchased directly through BNYMellon. Unfortunately Diageo's "Optional Cash Investment Fee" of $5 is roughly what I pay to my discount broker per trade. With an ongoing monthly automatic investment, I'd be paying $60 / year just to be able to buy fractions of stock and reinvest my dividends. I figured out that it would be cheaper instead to squirrel away a set amount of cash every month and after six months, make a purchase through a discount broker who offers a "simulated" dividend reinvestment. The discount broker I've been using does not offer this dividend reinvestment option, but some comments after my blog post offered suggestions, and I found a few others:
investrade discount securities
Not all companies have a fee schedule as unsavory as Diageo for their direct purchase program. In fact some companies will actually sell stock at a discount if enroll in their direct purchase program. Generally, buying stock directly from the company is cheaper than purchasing through a broker, but be sure to read the plan brochure and be aware of the fee structure. To enroll in this type of program, go to the "Investor Relations" section on the website of the company you're interested in buying and if they offer a DSPP, they will direct you to their transfer agent. You can also go the website of the transfer agents and browse through the list of companies they represent.
direct stock purchase program transfer agents:
American Stock Transfer & Trust Co
shareowner (wells fargo)
As I'm new to investing, I've decided to try both of these methods to see which suites me best. I have opened an account with Firstrade where I plan to make a small purchase of Diageo stock (as I would had I enrolled in their DSPP) and then turn on Firstrade's dividend reinvestment feature. Many DSPPs have the option for ongoing automatic purchases where you specify an amount to be withdrawn from your bank account and invested in the company. Since I'm not buying directly from the company, I'll have to be disciplined about saving and investing to make sure it happens like clockwork. I've also enrolled in ExxonMobil's (NYSE:XOM) DPSS+DRiP, with the ongoing auto-invest feature. [more]