Poof Be Gone Loser!

Some of you may recall my post about my biggest loser and stock reversal splits. You can read about that here http://poortorichadayatatime.blogspot.com/2011/12/reverse-stock-splits-my-biggest-stock.html

A stock reversal split basically means a consolidation of shares to try to increase share prices and can be a sign a company is having some financial difficulties.

After a particular pick of mine had a reverse stock split back in November, I thought, okay I will ride it out a little while longer. Little did I know just 4 months later, they would call for yet another reverse stock split of 1:500, that means for every 500 shares you held it would be reduced down to 1.

Many things went into this, such as trying to stop a corporate take over, defaulting on equipment in one of their companies so they would not see a revenue at all this year from that company and the fact that if they default on a 2 million loan they would not have enough shares to trade over to settle that loan.

There is no sense holding on to a company that is dragging your portfolio down,keeping it in the red. There is no place for emotional attachments in the world of investing. Cut your losses and move on, learn from the experience and make better investment choices in the future.

Since cutting my loss, my portfolio is back in the green and in a much better place for it.

Keep on truckin on............

My Automatic Investing for 2012

It has been my end of the year review and of course it did not go as I had wanted it to when hubby's hours got cut drastically and I had to sell most of our stocks off. But a new year comes with a new plan of action right?

Some of the choices for last year did not fair well at all so it was a good time to sit down and make a new plan and to prepare to start up our automatic investments again! This is always fun for me! Now granted, I did increase what will be automatically invested to a nice round number of $100 a month which includes the $12 a month Sharebuilder fee. $100 a month is a meager amount to invest for sure but on $1300 income a month it is truly the best I can do for now and I think that means I am doing great at being frugal!

So while I am not an investor and can not give advice, I can tell you what ended up going into my picks for 2012. I wanted some green companies that focused on biodiesal fuels from Algae BUT after 8 different company attempts, Sharebuilder did not offer any of the companies I wanted!

So I changed my angle and decided to go with 5 stocks that had a proven record for paying fairly high dividends.

My 5 stock choices are

Converted Organics    COIN  ( yup still giving them a chance!)
Johnson and Johnson   JNJ
Proctor and Gamble   PG
Walmart                   WMT
Exxon Mobile        XOM


I also have 5 ETF picks I will invest in monthly.

They are

Russell 1000 Value Shares          IWD
SPDR S&P Dividend ETF          SDY
Ishares Silver Trust ETF              SLV
S&P 500 Index SPDR            SPY
Vanguard emerging market         VWO


Basically I ended up switching out 4 different stocks keeping only Converted Organics from my original picks. I did not change any of the ETF's and those remained the same.

I set the plan up to start the automatic investments for the second Tuesday of January and it will be a once a month investment.

Now this is all based on our income right at the moment, so if I am successful at increasing our income, I will also increase our investment amounts and may add a few more into the overall plan.

Reverse Stock Splits: My Biggest Stock Loser for 2011

A Reverse Stock split is when a company takes back  the Original number of shares it offered and condenses it into a smaller number of shares available. They do this in order to raise the price of each share and can be a sign the company is in financial trouble.

This is what happened to a company I chose for 2011 and was for sure my biggest loser for 2011.

When I first saw the stock symbol COIN I was intrigued instantly, who could not help but like a company that had COIN for a symbol? This began my research into this small cap stock that was a fairly new company but had been in business for at least 3 years. I liked that part and it showed fairly sound management as well, or at least for an amateur investor it appeared so.

When I read what the company Converted Organics was about it resonated with my core values and I fell in love. I love picking a company that has value and integrity written all over it.

Then I watched through the entire year as I pretty much lost all but a penny or two as it dropped in share prices. Yes this could be a bad sign and in November when they announced the Reverse Stock Split, well that was not very good news at all! I should run like the blazes, I should drop them perhaps and pick something else. My ETF's are doing really well and if it was not for Converted Organics, I would of showed a small profit from my choices.

So I looked further into why they are doing so poorly and while they have spread  themselves really thin and maybe got a little over  their heads in debt, it was due to acquiring new assets and company growth. They have a seemingly good potential of rebounding ( if they do not fall off the stock market list completely that  is)

So in my end of the year portfolio review, I have decided to ride it out and give them a little while longer. At this point it would  cost me more in the trade fee to dump them than I have in my meager 20 shares of Converted Organics. I will also put more money into purchasing more shares but am limiting that to only $100 as I can live with losing a $100.  Hopefully they can bounce back in 2012 but if not, at least I have my other picks that balance my portfolio out. It is only a meager amount right now ending the year at only $50 due to us having to cash out much of our stocks to get another vehicle and deal with heating costs and such this year.

But hey everybody has to start somewhere right?