Your Questions About Money Making Stocks For 2011

Lizzie asks…

Question for my fellow Americans (cons, libs and inds) who aren’t in the stock market?

Why aren’t you in with both feet??? You guys are missing a strong bull market…just a small voice from the wilderness telling you to get in…that’s where we make most of our money is in the Bull runs. It’s not difficult right now…may i suggest the Russell small cap completeness and the S&P 500…both or either have been doing great and I expect them to for some time going forward (rest of 2011??).

B.S. Econ/Polysci (Cornell ’98) and I have a $760K+ stock portfolio.
If you want a stock to peak at checkout BHP billiton (world’s largest mining concern)…ticker BHP
Hmmm, lots of reasons/excuses…but bottom line the market is in a bull run…i still suggest you take advantage of it…when it starts slowing down or going backwards then move into cash or whatever…that’s all I have down the last 20 years of investing/saving and I am closing in on a million dollar portfolio…and trust me i started at zero, no trust fund baby here…just want you guys to get there too…plus if you jump in it will push things even higher… 🙂

John answers:

My econ degree sees more recession ahead. You may lose your shirt.

Nancy asks…

Need information on a order?

I ordered some extentions on the 19th of January from, i receieved a email saying Nochex Payment Confirmation, and in the message it said Thank you for choosing Nochex to make the following e-money purchase, which will appear as “Nochex” on your card statement. We value your business. After that it followed with payment detials, prices etc..
Then the day after that i got sent an email saying… (My name) your Foxy Locks Order Receipt (7 digit order number reciept)
Then in the mail it followed by saying Thank you so much for choosing Foxy Locks. We hope you love your purchase!
Order confirmation:

Date : 20 Jan 2011 – 06:55
Order ID : (My recipet number)
Payment by Nochex

Product : Quantity : Price
Deluxe 20 Clip In Remy Human Hair Extensions Light Ash Blonde 60 :

Subtotal :…
Delivery : ….
TOTAL : …..

Does this all mean the money has been taken out of my account? Because i read on terms and conditions that you dont get charged until item is dispatched, but it was complicated and hard to understand, and both those mails confirm my order and one is even a reciept. Once order is confirmed (which mine been has) They say they ship their items for UK delivery 1-3 days after payment has been confirmed, and they should arrive 2-4 working days, its now the 5th working day, and on my tracking order it still says on order, though the ones i got were in stock when i order and still say they are in stock. I can’t check the bank to see if they money has been taken out because it wasn’t mine account that paid for it, it was another family members.

If you could please help me out?

John answers:

Nochex generally claim their money a day or two after the transaction. Without the ability to check the bank account, you cannot be sure. Regarding the delay, e-mail Foxy Locks and ask what is the status of your order.

Laura asks…

Is there a Single Eternally Valid Absolutely true Economic Theory — Cookie Cutter — Always Good?

Is the Austrian School (Friedman, Von Hayek, Heinlein) Really Right for USA in 2011?
Ayn Rand or Janice Schakowsy Who Is Smarter for USA in 2011?
Ayn was the great simplifier, and it did work, in the areas of Ontology and Epistemology. She cut through Descartes, Kant, Hume, Berkeley like a hot knife through soft butter.

We humans think that anybody that knows anything about anything must of course know everything about everything.

So now suddenly Ayn Rand being listened to on the matter of politics and economics (which are quite different areas than epistemology and ontology).

The great simplifier just adopted the Austrian School (Von Hayek) lock stock and barrel. You want to make it simple just make it Laissez Faire Capitalism all the way — like in the Hong Hong Luna as described by Robert Anson Heinlein.

Yes, Ayn, that is simple. But is it workable, does it make sense? Can it help America in 2011?

Janice says, no not so much. Janice feels that the function of government is to take from the very rich and give to the very poor. The pyramid see is a little out of shape. It has a huge base. and then a very very small step up from the base, and then it swoooches way up into the stratosphere in a very thin and extremely tall spike, like a Hershey’s Kisses, except the spike is much thinner and taller.

The Pyramids at Giza had about a 45 degree angle all the way up. They have been there for a long time. Very stable. The early step pyramids were even flatter, and they went up in 3 or 4 steps.

Anyhow Janice, no Marxist, although she is from Chicago, feels that take it off the top pump it back in at the bottom makes the most sense.

That way capitalism is workable. The richie richie richies keep pumping the money back up into their own hands, and the government, by progressive taxation, keeps skimming some of it off and pumping it back in to the poor, and the desparately poor, and the poorest of the poor.

It’s like a cycle.

Is Janice the first person who ever saw this idea.

Henry Ford saw it.

He knew that if his workers weren’t paid well ($5.00/day) they could not buy his cars. If all capitalists paid just the going wage per the Iron Law of Wages, capitalism would eventually grind to a halt, because subsistence wages do not create consumers, and capitalists need consumers to have somebody to sell to. Henry paid about three times the going rate for labor so that he could sell his cars to somebody.

Somebay handy and near by — his employees.

That was the first last and only time that anybody thought carefully about Economics. The rest has been blather — the Iron Law of Wages blather, the Comparative Value Theory Blather, all leading to Globalism in which countries where the workers eat fish heads and rice need to worry about losing jobs to countries where the workers will eat fish tails and sawdust.

The Laissez Faire Capitalists have now created a world of total global Recession where no worker dares to spend a penny and no capitalist dares to take a step (for fear of crossing a picket line).

Nice job — *ssholes!

I’m with Janice Schakowsky on this one, and with Learned Hand who said that taxes are the price we pay for living in a civilized society. Eisenhower was no marxist, but in his time the top marginal tax rate was well over 90%. Some people feel the economy did quite well in the 1950’s.

Take off at the top pump it back in at the bottom. The top sucks it back up, it’s like a fountain but in reverse.

Yes, government does have an economic function.

Yes that function does relate to distribution of money.

Bernanke has been operating it in reverse, grabbing ahold of taxpayer money, and sending it all to Goldman Sachs, first a Trillion, then Two, then Four and now another $600 Billion.

This is the lunacy of reverse economic policy.

If you lose your house and have to eat at the food kitchen, you could blame the lunacy of reverse policy.

Janice has it right — what’s missing is demand — and you can only create demand by pumping money in at the bottom not at the top.

I say that Janice Shakowsky is the Albert Einstein of economics in USA in 2011. People would be smart to follow her lead.

What do you think [Keep in mind that the slightest sign of disrespect toward me will get you barred. You will never see another one of my questions or answers, so play nice, with me].
Thanks Bear — great info, now how about my question — Does Janice have a point in your opinion, or are taxes always bad, and a drag on the economy?

I write long, but it’s not ranting. I have asked a good question. I want an answer, and a good one.

Bear’s thoughtful and informed comments are highly welcome and respected, now I want my answer!

John answers:

You seem very sensitive towards disrespect, I would encourage you to lighten up in a public forum.

To answer your initial question, there are a few basic theories that are accepted by MOST economists to be true. Of course there will be a few people who disregard EVERYTHING just to be different and a pain in the butt. However, in my 36 years of professional economics, the following are considered true from most economists.

1. The market economy is the most stable type of economy.
2. In order to be successful, a market economy must be guided by a government.
3. If the role of government is too small, the system will become corrupt.
4. If the role of government is too large, the system will become corrupt.
5. If the whole pie gets larger, even the smaller pieces get a little larger (the pie being the economy).
6. Technological invention, innovation and progress are necessary for a market economy to last.
7. There are certain areas of business that can only be trusted to a government (If the DMV were run by private firms, they would be given to those who do not deserve them to make money.

Hope this helps.

Joseph asks…

How should I invest, long-term?

I’m looking for advice on how to invest for the long-term. I’ve been reading about investing for a while and have a strategy in mind but would like to know if it’s a solid plan. I’m 24, military enlisted, and have invested the maximum allowed in a Roth IRA for the last 3 years, in index funds (VFINX, NAESX, and VGTSX). I have also been investing approximately $3 – $5K in the Thrift Savings Plan (government employees 401k) in a Lifecycle fund, or target retirement fund, for 3 years. I’ll have my car paid off and $20K in an easily accessible high yield savings account before the end of 2011, with no bills thereafter. At that point I’ll have at least $1K a month to invest in the stock market. I would like to have a buy-and-hold strategy and I am wondering if dollar-cost-averaging about 10 dividend paying stocks, with a long history of increasing dividends (KO, JNJ, MSFT) would be a smart investment strategy. I don’t want to have to actively manage the account, although I know I would have to adjust my holdings once in a while, and I would make safer investments as I get closer to retirement. I would also have about $6K a year to play around with in the stock market or to add to my savings.

Is $5K in my Roth IRA, $3 – $5K in my TSP, $12K in dividend paying stocks and $6K to play around with each year a sound approach or am I on the wrong track? I don’t really spend any of my money and I want to have a nice retirement nest egg so any advice would be appreciated.

John answers:

You have started at a younger age than most people. You have also found the best mutual fund company in Vanguard. Congrats on a terrific start investing.

Individual stocks are a fine idea if you educate yourself to do so effectively. A few excellent books; two easy, one more challenging but an absolute classic:

One Up On Wall Street – Peter Lynch
A Random Walk Down Wall Street – Burton Malkiel
The Intelligent Investor – Benjamin Graham

You might also diversify your portfolio by adding allocations to a few new areas.

International stocks, including Emerging Markets (Vanguard Total Intl)
Real Estate – Vanguard has a REIT fund
Commodities (for inflation protection) – Consider VGPMX

Sandra asks…

What’s the best way to invest in a TSP? (Thrift Savings Plan)?

I will be joining the military soon. I am young and don’t expect to retire for a long time.

From wiki:
Individual funds

* G Fund[5] – Government Securities fund. These are unique government securities not available to the general public and are backed by the full faith and credit of the US Government. The G Fund was the initial fund established by the TSP when it began operations on April 1, 1987.
* F Fund[6] – Fixed Income Index fund. Invested in BlackRock’s U.S. Debt Index Fund. Tracks the Barclays Capital Aggregate Bond Index. The F Fund was opened to Federal employees in January 1988 but was limited to only a portion of contributions; beginning January 1991 all restrictions on F Fund contributions were lifted.
* C fund[7] – Common Stock Index fund. Invested in BlackRock’s Equity Index Fund. Replicates the total return version[8] of the S&P 500 index. The C Fund also opened to employees in January 1988 and was subject to the same restrictions as the F Fund until January 1991.
* S Fund[9] – Small Capitalization Stock Index fund. Invested in BlackRock’s Extended Market Index Fund, which tracks the Dow Jones U.S. Completion TSM index. The S Fund opened to employees in May 2001.
* I Fund[10] – International Stock Index fund. Invested in BlackRock’s EAFE Index Fund. Replicates the net version[8] of the MSCI EAFE index. The I Fund opened to employees in May 2001.

– I can invest up to 16,500 for 2011
However, I start at a low tax bracket and plan to retire from the FAA making about 100k+ a year, would it just be better to open up a Roth IRA somewhere? Even then I am unsure of where to invest my money. Is it a smart move to just diversify it across the spectrum? I know the G-fund is the safest, but yields the lowest returns. Would a yearly 5 percent return be a modest expectation over time? I also have to pay 0 state taxes for my home state for the next 6 years.

Thanks, please help.. I don’t want to be SOL like most of my family is who never even bothered planning for their retirement.

John answers:

If you invest in the TSP, I would suggest the “L” or lifecycle funds, which diverse in a mix of the other funds. The Lifecycle funds start out mostly in stocks, but as you approach retirement, they become more conservative and slowly shift money into G and F fund.

Since you are in a low tax bracket, it would probably be better to open a Roth IRA at Vanguard and put it in one of their Target Retirement Funds, which are similar to the TSP Lifecycle funds.

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