Monday, January 11, 2016

Recent Buys (Tax Deferred) - MMM, HSY, TROW, JNJ

Falling Knife


Sometimes, I feel that I am trying to catch the falling knife. The companies that I buy immediate plummet in price. For example, I bought some MMM last month and it dropped almost 10 points!

A lot of people advocate using technicals so that they do not catch the falling knife, and just buy on the upwards direction. There are many ways --  eg using the rolling average, or even the relative strength.

However, I am very lousy at market timing. Very lousy.
Going in the MMM trade, my plan was to average down if this happens ie (drop 10%, buy more). Likewise, I mentally said to myself to average down for the new recent trades below.

Why not? You are buying at a cheaper price. Same level of quality company.

I recently bought the following companies for my tax deferred account. Note: This is not new capital. I am just reallocating from an existing mutual fund which I converted to cash recently.

Date
Transaction
Ticker
Price
Quantity
Amount
12/15/2015
Buy
MMM
149.00
25
3725.00
1/6/2016
Buy
TROW
68.99
50
3449.50
1/7/2016
Buy
HSY
85.61
25
2140.25
1/8/2016
Buy
JNJ
99.23
35
3473.05

So, my next trade on MMM (in my 401k account) will be at around 135 to 138. I will follow the same strategy for the other companies.

As you can see, I am sticking to only the “AAA” companies for my 401k account. I've purchased these companies before in my taxable account so you can read my previous articles on them.

I am interested in dividend income. With the 4 trades, I will get a forward annual dividend of $369.75. The yield of these trades is around 2.9%.

D4s

2 comments:

  1. I think you and all of us sometimes run into a stroke of bad luck as it is impossible to time the market. I like the stocks you've purchased recently, we own 2 of the 4 mentioned and we would definitely consider them all on the conservative side of the spectrum. :)

    Do your research and follow your gut, in the long run you'll be fine. AFFJ

    ReplyDelete
    Replies
    1. Yes - Bad luck indeed. But you are right, over time, these drops are nothing. I just need to buy regularly and edge myself into the market.
      D4s

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