Investor Junkie
My Business and Financial Freedom Journey

Added More Exxon Mobil (XOM) To My Portfolio

I’ve owned Exxon Mobil (XOM) for the past 7 years, and including dividends, I’ve had an annual return of slightly over 5% APY.  While it’s not knocking it out of the park, it’s not bad for a Dow component, and especially not bad in this economic environment.  Exxon, as with other oil companies have been beaten up in the past 2 years, especially in the past 3 months with the BP disaster in the Gulf.  For the past three months, Exxon’s stock has declined  over 16%, and I think it has been oversold.  I’ve been looking for a place to put some new money, and have been looking at FDIC secured investments, but I am frustrated with their poor returns.

Leave Investing To The Professionals

This interesting guest post is by Mr. Credit Card. While I (Investor Junkie) may not completely agree with his position, it’s a more common notion to let investment professionals perform the stock picking for you via actively managed funds.

I used to work in the financial industry and I can tell you that I know how difficult investing is. However, many folks are passionate about investing and most spend lots of time doing research and analysis. But in my opinion, unless you are a professional and paid to actually manage money, you are better off spending your time with other pursuits. In this post, I am going to list down the reasons why it is so difficult to actually to succeed as an amateur investor.

Why I Sold Stocks In My Taxable Account Today

I sold stock from my taxable account today.  I obviously don’t have to tell you about yesterday’s roller coaster ride in the market. I’ve had the feeling the market has gone too high too fast before this, and believe the market is not cheap right now.  I sold stocks today because of these reasons:

• I’ve had considerable gains in the stocks I owned (20%+ in one year)
• Believe the market is overbought with a somewhat high P/E ratio (approx 20)
• The stocks I sold have dividends and since they are in a taxable account will be subject to much higher tax rate next year
• The primary reason was to fully fund our Roth IRA accounts for the year

We are already 5% in cash with our retirement accounts.  I’ve made adjustments to our retirement accounts in the past few months, but I have not (nor will) make adjustments to them other than for some re-balancing.  I believe asset allocation is much more important than selling based upon emotional factors.

I’m taking the money from today’s sale and fully funding our Roth IRA accounts for 2010.   I’ve not mentioned this before, but our 2010 investment strategy is:

• Max out my wife’s 403(b) account (I don’t have a 401k or IRA setup within my company)
• Max out both our Roth IRA accounts
• Contribute $10,000 to our children’s NY State 529 accounts (since contributions up to $10k are tax deductible to the state)
• Invest $5-10,000 in US I Savings Bonds (I’m not sure the exact amount because I’m not crazy about the existing rate)
• All remaining funds invest within our taxable accounts

I eventually want to invest our taxable savings into real estate or another business.  I haven’t found anything suitable so far.  My thought is then take some of that taxable money off the table, and move into tax differed savings.

What is a Master Limited Partnership (MLP)?

MLP is NOT My Little Pony!

What is a MLP?  It is NOT My Little Pony as what came up when I was Googling for this article.  MLP in the investment world means Master Limited Partnership.  MLPs have generated some of the best returns for the past decade, and yet it’s a secret to most investors.  I myself only found out about them two years ago.