Investing

Should I have stuck with those old stocks…? Let’s See.

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Just occasionally in the heat of compulsive decision making, one loses the grand perspective! Really. In 1998, I started trading in the US stock market, I still remember the trepidation and fear that accompanied my first online stock purchases. In those days, I was a Motley Fool reader and bought some suggested stocks based on their ideas. It was a fairly decent portfolio that I purchased for about $8357.84.

Today, I was going through records today of my first stock purchases and here is what I bought in 1998…

The first column is the number of stocks, the stock symbol, the price I paid, the trading cost and the total costs.

18 GM 56.5625 9.99 -1028.12
11 JPM 86 9.99 -955.99
14 MMM 70.1875 0 -982.63
23 MO 42.6875 9.99 -991.8
10 DELL 58.5 9.99 -594.99
10 DELL 59.6875 9.99 -606.87
14 ATHM 73.2344 9.99 -1035.27
25 CAT 42.4375 9.99 -1070.93
25 IP 43.25 9.99 -1091.24
Total -$8357.84

I don’t know how I would have fared in the long run otherwise as I had to sell my stocks then repurchased others… I’m pretty sure my track record isn’t that good. But let’s see if I had just forgotten them for 10 years. What would they be worth now?

The list: ups and downs!

ATHM is now worth $0 … ah, those tech stocks. Can anyone remember what happened to ATHM? I sold out before taking a small loss. I noted that price, because I can’t remember what happened to them after that. All prices are calculated at today’s rates (obviously volatile).

The first column is the number of stocks, the stock symbol, the current price per stock, the total accured dividends, and the total value of the purchase as of today.

18 GM $13.14 $590.90 $827.42
33 JPM $39.94 $460.02 $1,778.04
28 MMM $68.49 $420.56 $2,338.28
23 MO $20.46 $2,265.94 $2,736.52
40 DELL $24.41 $0.00 $976.40
28 ATHM $31.75 $0.00 $889.00
50 CAT $71.15 $432.00 $3,989.50
25 IP $23.21 $262.50 $842.75
Total Purchases $14,377.91

Overall, if I had done nothing in the past ten years, I’d have made over $6,000 on just those stocks, including splits, dividends and spin-offs. If you look at the stocks, you’ll see that that there is a HUGE divergence of performance over the past ten years,

Would I have beaten the Dow Jones?

As it so happens, the DIA ETF started trading the same quarter, so I’m able to track the performance of buying this ETF. (In fact, I did buy it at one point.) Anyway, using a notional monthly average, I’d have been able to buy 106 shares in DIA in 1998. Adding dividends to the total, I’d have made $14,286.68 in those years, so I’d have beaten the stock market but not by much!

Sobering Reality

In reality, I bought and sold more stocks than I remember, I rode the bubble and the coming collapse. Then I failed to sell as stocks tumbled. I then lost ‘interest’ and just sat there stuck in the headlights. Since 2003, I’ve been pursuing a more dividend focused story than ever, and today’s research really shows that dividends would have accounted for over 30% of the total gains! That’s not to be sneezed at.

I’ll be detailing much more after the blog’s reorganization… yes, I’ll be having a stock blog! Stay tuned.

Any stock stories to share?… do drop by!

This story has been edited three times for inappropriate formating, replacing/removing the chosen Flickr images (not properly licensed) and tidying up formatting.

Stock Brokers: Which online brokers can YOU use?

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2

There’re a lot of good sources of information on brokers for those who live (‘reside’) in the UK or US. But what about those of us who “don’t qualify”?

Are you NOT a US Resident? Oops, I’m sorry… We can’t help you.

Look no further. I’ve done a little research from the SmartMoney’s Annual Broker Survey, and not surprisingly they are listing a number of well known companies, newcomers and upcomers… But the list is ABSOLUTELY NO USE, if you are not a Resident of the United States nor a citizen.

I won’t go into why this is silly, but suffice to say, the lower the price of trades, the less likely the broker will accept international clients, like you and me. At least that was the rule, now it’s not so clearcut.

From the original 16 listed brokers, I’m making my own list of InvestorBlogger’s Short List of Brokers who accept International Clients (i.e. non-resident, non-U.S. citizen investors who would like to trade the U.S. markets).

  • 1. ETrade: One of the first brokers I applied, too. They approved my application, but the service wasn’t great then. It should be now.
  • 2. TDAmeritrade: Where my current brokers’ account is held. Fast, lots of resources. Service is available, but somehow distant.
  • 3. Charles Schwab: Did consider them, but they have quiet higher initial requirements, or at least did. You do have to register through their one of their international sites, not from the US site.

Other Serious Contenders included,

  • 4. FirstTrade also offers International clients trading services.
  • 5. OptionsXpress would allow me to register and fund an account, which was a surprise. They have branches in different countries, including Singapore
  • 6. Interactive Brokers allowed me to register, but I never completed the applications. I should have. The service allows you to trade many markets, not just the US.

7. Sogotrade, Zecco, Banc of America, all had slightly fussy processes or requirements but at least welcomed international investors.

One of the problems was finding the information. Often sites would require you to hand over your email address without stating clearly that you would be able to then register for an account. Other sites had the information hidden away in Help files or FAQs. Still others didn’t say openly that they accepted international investors, or directed me to ‘international sites’ which wasn’t helpful, (yes, you, Fidelity!).

I would strongly suggest that you read through the websites to find the best deals, the markets you want to trade, though the application requirements for most accounts are pretty similar:

  • 1. passport copy;
  • 2. proof of address;
  • 3. an application form;
  • 4. a W-8BEN form (for the IRS); and
  • 5. minimum account funding (at least!)

Once you register, you won’t have access to the full-range of US products, either such as IRAs or other accounts/services because of legal restrictions. But if you are in a country with a tax-treaty arrangement with the US, this may not be an issue!

Disclaimer: I’m a satisfied customer of TDAmeritrade, but there are no affiliate links in this post.