Friday, May 31, 2013

What to do?

About two months ago, I sold off some of our mutual funds and individual stock in order to get a healthy balance to invest in a stock. Altogether it was about $4,400. I decided I would find a pretty big company and invest all of that money into it. Yes, I know, very risky. I did my due diligence and found Icahn Enterprises. This is the investment vehicle owned by billionaire Carl Icahn. I figured he would be a pretty safe investment considering he has a lot more money than I do and he does not want to see his money decrease. So I took a shot and I invested in his company at a share price of $67. I was able to get 67 shares at that price. Not to mention, Carl pays his stock owners a $4 dividend on every share.

I followed this stock closely and used stop-losses as it started going higher. It was a very volatile stock trading up or down 1%- 2% a day. Eventually it got to my sell point of $90, then the stock tanked and I sold at $87. So, I made almost $1,300 with that stock. Now I have about $5,700 to invest with. I am not sure what to do. The market seems to be very unstable recently. The Fed can't decide what it is going to do and the market does not seem to like that. Now would certainly not be time to be risky. I need some healthy growth stocks that have had a dividend for quite a while. I am looking at a company like Coke. It is a little on the expensive side with a P/E at 21, but it seems to be going through a pull-back right now. It would certainly be a good entry point.

Another one is Costco. They have been on a tear recently. Their earnings are improving and their P/E is high at 25, but EPS is 4. So the multiple is not bad here.

I also question if I should get in a mutual fund. Tanner was correct about FNMIX. That thing has done nothing but go down since I bought it in February. So, I saved a few months of retirement contributions and purchased FBIOX, which is a mutual fund around health care. It has returned close to 35% this year alone. I wonder if I should put my $5,700  into this mutual fund as well and see what happens. I am definitely looking for risk so that I can see some upside, but do not want to be too crazy.

I would love to hear what you guys think, or if you have had any success recently with investments. I would love to know what you invested in and why. 

1 comment:

  1. I had been saying the market was overbought since Feb, but when I saw Sirius XM climb from 3.03 (where I sold last in April) to a high of 3.62 in about three weeks of May I took a position around 3.50, only to see it plummet to 3.32 today and lose about 5% in a week and triggered my stop loss, which erased my earlier gains from 2.73 to 3.03. Be wary in this artificial market, its really all smoke and mirrors since about last year.