in the market today we actually moved a
little bit to the downside but we
we were recovering nicely going into the
close it appears like we slipped a
little bit
we'll talk about the market as well some
other factors and factors related to
managing a self-directed portfolio in
our session today so let's go ahead and
get started
so again they want to welcome everybody
here to managing a self-directed
portfolio
my name is ken rose and as always
very happy to be here to discuss
investing in the stock market
just a little reminder you can follow me
on twitter my twitter handle is at krosc
underscore tda
or postings related to this area as well
as other areas of investing i want to
thank cameron may for being over there
in the chat window to address your
questions cameron's very knowledgeable
in this area
do feel free to address do feel free to
send any questions you like to order the
chat window and also
remember to follow cameron on twitter as
well he posts some great things over
there that's at cma why
underscore tda white disclosures here
today
it's reminded that in order to
demonstrate the function of the platform
we need
we do need to use actual symbols here td
ameritrade does not make recommendations
or determine the suitability of any
security or strategy for individual
traders
any investment decision you make in your
self-directed account is solely
responsibility we do use a paper money
application here to keep in mind
that is for educational purposes only
any level of success that we may have in
our paper trading account doesn't
necessarily mean you have the same level
of success in your own live trading
accounts as market conditions do change
continuously
there's a picture of myself been here
for about 16 years maybe a little bit
more maybe a little bit less i
enjoy working in this area i'm in
constant learning more i enjoy learning
new stuff all the time i appreciate
questions and comments that come up to
me particularly via twitter
questions and things and then
opportunities to kind of go in and
discover new things
i specialize in blending both
fundamental analysis with technical
analysis
i'm a contributor on the td ameritrade
network i'm a charter market technician
i use thinkscript to build indicators
triggers and strategies
so in here what we've done is we've
assumed that we are a
young professional in the investing
realm right here
and in doing that basically we're we're
we're setting up our our our allocation
um with regards to
to how we how we how we allocate our
portfolio
now you may not be you may not be a
young professional you may be a little
bit older older like myself that's
that's okay you can still take the
principles when we discuss here
and use them with regards to any
allocation you choose okay we just
wanted to have a sample
allocation of course you can adjust
these percentages but as young
professionals
what we're looking at as far as our
allocation here just to kind of give you
a rough idea here there we are right
there so
looking at it we're looking at about a
500 000 account
i'm drawing with a mouse here so if the
penmanship isn't great
then out of that 500 000 account we're
allocating
75 percent of that
by the way that 500k that's that's meant
to equal all of the assets okay
it's relocating 75 of those assets to
stocks
okay so this area right here
coming around like that okay that is
75 of that allocation is to stocks okay
now within that 75 percent again being
young professionals we decided to be a
little bit aggressive
and out of that 75 by the way that 75
percent
adds up to out of the 500 000 it adds up
to
375 000 as allocated to stocks
and we're taking 50 percent of that
actually it's 55 we're taking 55 percent
of that and we're allocating that to
growth stocks
i'm just going to use some shorthand
here gr okay
then we're taking 25 percent of that
and we're allocating that to income
stocks
and then we're taking 15 percent of that
and we're allocating this to you could
call it alternative investments we've
primarily
been allocating this to small cap
small cap stocks aggressive stocks and
we we may do some reits later on
also known in some areas as penny stocks
we don't
we don't we don't categorize a stock as
a penny stock based on the price of
stock but rather
we calculate it based on the market cap
and these are these are primarily small
cap stocks
then we said we wanted to have
approximately five percent
set aside for cash and liquidity
of course that amount will fluctuate as
as our as our potential allocations
fluctuate
now we we're not completely allocated up
to 55
25 and 15 but we are actually pretty
close in the growth area here i think
we're i think we actually
are completely allocated in the growth
area over here on the income area i
think we have about 9 or 10
10k left to allocate and in the small
cap area we have a little bit more
more than that to allocate in that in
most different areas
so with that type of an allocation let's
just kind of take a look at how we've
done up to this point
and to do that let's see we want to do
here grab a
here's a spreadsheet let's start over
here on our grow stock so
these are these are these are our growth
stocks these are
these are the investments over on this
side okay
and if you if you notice our investments
here we did make one investment here in
may
and then we kind of get got a little bit
more structured with regards to how we
wanted to address this class so
primarily our investments have been late
june july and august
up to this point the allocation we had
set aside for the growth here
for the growth area was it was
originally 206 thousand dollars but with
growth in the account
it's now 213 000 dollars we currently
have an allocation of 211 000
so we are pretty pretty close completely
allocated the return so far in this in
this area over the over the last
again it's it's gone on for a little bit
more than a little bit more than a month
now
the but the allocation is currently
earned in this growth area
approximately 10.83 percent in the
income area if we come over here and
take a look at the income area and by by
the way the growth stocks
with regards to growth income and small
cap we use a different
uh process for for each one of these
and because we have three different
three three different processes as far
as building this portfolio out
we keep those processes consistent so
when you go back and you maybe you look
at the archives of some of these
some of the some of the webcasts we've
done look in the title
okay if the title says growth just keep
in mind that's a good place you could go
in and review the process we use for
growth
if the title says small cap or penny
then look at you can go in and you can
look at that webcast you look at you can
look at that archive webcast just to get
a review of the process we use in there
today we're going to be talking about
income and value because that's
basically next in line
we did small cap we did growth so this
week we're talking about income and
value
so today's title when it's posted it
will have the
it'll have the words income and value or
or income or value
if you notice that you'll say okay so if
i want to kind of brush up on the
process to choose i can go
in and catch that archive so the process
of finding these stocks and
and making and deciding which ones to
enter into our portfolio
primarily stays the same the backdrop of
the market continuously changes so it's
basically using those same processes
against the market as the market changes
okay
with regards to the the income area
looks like in the
income area you've got overall this is
this is end of june
basically end of june to end of august
now because
because we're pretty much done with
august okay so that's that's basically a
couple months
look we're looking at 10.13 percent
overall return on areas here we've had a
little bit of a challenge here with
small cap this is a rather volatile area
these things that are highlighted in
yellow those represent excess you can
see
we've kind of been kicked around a
little bit here we're currently on this
one over the period of the last couple
months
we're only up about half a percent so
that's that is not great performance
particularly in relationship the overall
market
we have made some adjustments with
regards to considerations and
with regards to our our entries and
exits
uh stop losses and those types of things
we do want to keep in mind that stopless
doesn't
guarantee it'll stop a loss okay but we
do with regards to using those types of
things we are making some adjustments
here as we go along
in an effort to refine this but this is
where we'll be looking at here this week
is the is the income value area and you
can see up here
our current allocation is 85 000 and our
current allocation target is 97
000 so we we have about we have about
about 12 000 dollars in here
we could allocate this we could also
look at our current positions here and
see possibly
any of those are potentially ready for
exit let's come back over here to our
slides because i think i actually got a
little bit ahead of myself as we were
explaining things over here
let's look at our agenda today since
we've already kind of got into our
agenda
okay so we wanted to review our
allocation performance which we've just
done
okay we want to review the market itself
and we also
want to take a look at it from a sector
standpoint
and because we're looking at dividend
income we want to talk about dividend
stocks
and and we'll load up a listing of
dividend stocks we'll talk about where
that listing came from
but as part of that we'll we'll search
by sector we'll we'll basically tie
these two areas together right here
almost right here we're going to look at
the market and we're going to look at
sectors
okay then we're going to load up some
dividend stocks
and they and they won't be random we'll
talk about that then we're going to look
at those stocks we're going to search
those stocks these dividend stocks
by sector taking into consideration what
we've seen with regards potentially
strong sector
and also looking to see what analyst
expectations are for those stocks
and given time okay we'll also look at
look at our listing of stocks we'll
basically look at a sub listing of those
stocks
we'll look at the yield and we'll look
at yield
and we'll talk about yield and the play
yield parts with the the play that yield
the the part the the the position
that yield plays when we're when we're
making a decision as far as potential
entry as far as potential acts and also
pull in analyst expectations with in
relationship to that
and then we'll look to uh paper trade a
stock as well
okay so with that then let's go ahead
and we'll review the market in the
related sectors here
and we'll come over here and bring up
the thinkorswim platform right here
and what i'm going to do is i'm going to
bring up a chart here so many of you
have seen this chart before this is a
relative strength chart but before we
bring it up
here we have the s p 500 i just want to
come over here and take a look right
here notice that we have a strong
a strong a strong market moving to the
upside
making higher highs and higher lows
we're in this nice
strong channel that's going on we could
draw a line like this
to represent the top part of the channel
and bring this line down here to
represent the bottom of the channel
sort of nice up trending channel
creating higher highs
also creating higher lows the top part
of the channel we could we're showing a
little bit of weakness here we could
possibly move down to the bottom side of
the channel because you know
you know securities the market doesn't
go up forever we could move down to the
bottom of the channel and bounce
continue to go up or
or we could continue to go up hug the
upper part of the channel possibly break
above we're not sure exactly
will happen but overall looking at this
we would say that there would be
justification
to see to be somewhat bullish with
regards to market we want to look at
this most recent one notice here the
market came up here it moved sideways
and then it dipped down a little bit and
then from here it took a nice strong
move to the upside
it's a strong move that took to the
upside if we began here and that date
right there is 8 19 that's august 19th
and if we wanted to see performance of
different sectors from august 19 through
today
we could bring up a relative strength
chart that would help us to do that
what i want to do right here in
relationship to this little discussion
here with regards to this relative
strength chart
is we had a we have pretty much a
complete session
where we discussed the rel the relative
chain
the relatives the relative strength
chart that we're going to look at here
okay
and what i'm going to do is i'm going to
send over to you in the chat window here
let me just send this over to you
i'm going to send you a link to that
session i'm also going to give you the
date of that session
i'm hoping i can send the link over to
you let's see if this will work
looks like we got it okay there's a
there's a link that's that's a youtube
link
also let me show you where you can find
this session as well
okay now notice on the on the
thinkorswim platform we have the
education tab right here
you have that same education tab over on
the tdmr trade
platform as well here is td ameritrade
right here
okay and notice on the td ameritrade
platform we have the education
tab right here if you come in the
education tab right here and come over
here and click on webcast
that will bring up this page right here
and on this page you can go an upcoming
webcast you can go into archive webcast
and go into webcast calendar
if you wanted to find an archive webcast
that's what we're discussing right now
what you can do is select archived come
down here and choose the
instructor i've got here kenrow selected
so we have kendra all selected
and then because each each one of the
coaches usually teaches maybe
maybe three or four webcasts max each
week
rather than try to guess what topic it
is or what level it is i would just
choose the coach and just scroll down
what are we looking for we're looking
for the august 10th remember i gave you
i gave you the date there you might want
to jot it down now
now you have the link so one thing you
do is just copy the link that will take
you straight straight to the youtube so
you could do that
i'm going to scroll down here as well
just so you'll also have a good
understanding of how to find some of
these other webcasts here if i can
see there we go i'm just going to scroll
down here to august
10th and
there's august 10 most this is managing
a self-directed portfolio says trading
income stock examples
doesn't say anything here about the
relative strength chart but
really that's the primary focus of this
discussion
okay now i i actually get into the
discussion of the relative strength
chart
start at 29 minutes in should come in
here and pull it up
i have this set up right now so that
when you pull it up it should
automatically go to the 29 minute point
it just starts talking about the
relative strength chart okay but for
some reason it doesn't
keep mine when you pull up you can just
pull over hold over to the to the 29
to the 29 minute area the reason i want
to bring that up i want to spend three
or four minutes
explaining it here so that we don't
spend 30 minutes here
explaining it explaining it in this
session okay so i'd like to
have some additional time here with
regards to looking at the stocks okay
let's bring up the chart itself then
we've been discussing here and where you
can get
information on that i'm going to come up
here where it says style
and i'm going to come down here and
choose load style again this chart and
how to load it up do everything
is contained in that august 10th we'll
just we'll just use it here today okay
we'll use it today and i've given you
what you need if you if
now many of you are familiar with its
use you know how to use it
how it functions in the light i come
down here just see i've got another one
here
relative strength let's choose this one
there we go
okay so here here we have our relative
strength right here now um i do
i i do update this occasionally if you
if you if you got it from me in the last
oh two two months or so you should be
just fine
um if not or or if you're or if you're
new to our shipments here and you would
like the link to actually build the
chart
i do feel free to contact me over on
twitter and i can do it
and i can do it i can't help make that
available okay but we want to do is we
want to make this
relative strange chart we want to tune
it into the dates in the market right
and if you remember the market we went
back
we we basically went back eight
actually nine trading days that you know
when we're looking at the chart we're
looking at
the date that we had of 819 if you look
at that chart and you count from there
to today there are
nine trading days okay
so so we want to keep keep that in mind
but let's
let's say our let's set our dates here
for our chart i've got weekly here's the
time frame i'm going to change the time
frame here
to daily and i'm going to go custom
right here
and i want to start on that starting
date which was august 19th of this year
that's
that's that's what is that that's like
august 2019 so
let's go to actually that's october
2019.
let's move forward here to 2020 and find
august
here is august and we want to start on
august 19th because we're just looking
at this
most recent run in the market now if
you're looking at that and say you know
i
i'm kind of uneasy about that i want to
look at it from a longer term standpoint
well
you want to feel free to do that there
there's nothing wrong with that
and over here let's set this to today
and that's going to be august 29th right
come over here and
apply august 29th
actually 31st there we go august 31st
and rather than have each candlestick
represent a week we're going to have
each candlestick represent
a day
right here we're going to say okay it
looks like we got our channel here for
the s p
500 let's get rid of our channel because
we don't need that
okay so this is showing us these sectors
these are these are labels up here that
are that are color coded
to identify the sectors what we want to
do is we want to look at a couple things
we want to look at the leading sectors
we want to look at sectors that are
currently moving to the upside
okay so this is by far the leading
sector notice i roll over it's kind of a
gray color
that's telling us it's information
technology we wanted to confirm that we
could roll over the line to a right
click
and when i come down here notice it says
s p 500 number 45
that matches up with the number so one
one potential area that we'd be looking
at would be info
tech okay how about this one now this
this one's moving down okay so the most
picked up here has moved down recovery
then down again
still for the over for the overall
period it's been going up nicely it
looks like that's probably
telecommunication
because of that red it's either
telecommunications or possibly
discretionary but it is it is
rain number two right here but let's
pull this up and see which one does that
have a 25 at the end that has a 50 so
it's telecommunication so
telecommunication may be one but it's
sloping down this one right here
is moving up by the way the black line
represents the spx you totally when you
roll over that it doesn't expand
so these are the three that are
outperforming okay this one's just
barely outperforming but
this looks to me to be discretionary if
we roll over that
right click and i can just come over
here 25 is discretionary so
some of the key some of the key areas
would be looking at them would be
would be infotech it would be
discretionary
okay info tag discretionary
and we can also take a look at we could
also take a look at telecommunications
about this one right here is notice it's
also sloping up nicely
and that looks to me to be health care
let's check that one out is that health
care
that is health care that's 35 so
possibly health care as well
okay so those would be so
those would be some of the key sectors
to look at then would be
infotech healthcare
and consumer discretionary now if you're
now if you wanted to use this and
measure different time frames you want
to feel free to do that
okay we're just we're basically showing
you how to use these tools
as far as exactly how you apply them you
want to feel free to
to kind of mix and mix things up a
little bit and and
and run these in a way that you feel
comfortable with okay
well now that we know this if we bring
up a listing of stocks
okay that pay dividends and let's start
off with this list right here
this is a stock this is a listing of
stocks and these stocks
some of these stocks have been paying
dividends for 25 plus years
some of these stocks have been paying
dividends for 10 to 24 years
and some of these stocks been paying
dividends for five to nine years
this is a combined list of stocks okay
that have been paying dividends in some
of those time frames now
where did i get these stocks i like to
keep things easy
okay and you can you can run
scans to find to find these stocks and
there's nothing wrong with that if you
want to do that go ahead and do it
because i like to keep things simple i
just go on to google and you can do this
the same thing
go into google and search search
dividend champions okay
dividend champions when you search
dividend champions
you should get a result or two maybe one
or two results
and hopefully one of them will say
dividend champion spreadsheet
and when you pull that up what you'll
likely see
is one spreadsheet that not only has
dividend champions
it has also has dividend contenders
okay and also has what is it dividend
champions we got dividend contenders we
got dividend challengers
it probably has all three of those now
some of you may be scratching your head
and say hey what about dividend
aristocrats because that's probably one
of the more popular names in this area
well dividend aristocrats are simply
dividend champions
that are part of the s p 500 okay
so so if you wanted to you you could you
could go ahead and pull the champions
and you could kind of run a little bit
of a cross scan on think or swim and
just bring out the aristocrats if you
want to do that
and we'll play the part of the investor
that's okay just looking at just looking
at the champions not necessarily just
the
just the 25 plus years that are part of
the s p 500
one of the things we want to have on
here is we here's our sector notice
we brought up this listing now now again
when you find it on the internet okay
when you find that spreadsheet on the
internet it's a very simple process to
add it to a watch list over here
basically all you do
is bring up your spreadsheet copy the
symbols just the symbols and nothing
else
copy the symbols nothing else after
you've copied them
come over here to a new watch list or
existing watch list
go up here click this come down here and
choose edit
your watch list then in this box i'm not
going to do because i don't need to do
you click on import then when you click
on import
a box will come up let's go ahead and
click on it says do you want to replace
the symbols or do you want to add to the
current symbols
if you're updating one of those separate
one of those separate lists then you say
replace if you're making a combined list
here then you you'd replace the first
one then you would just add the next two
to it
you come up here and click on paste
symbols it will you click paste symbols
it will it will automatically bring up
those symbols that you copied from the
spreadsheets
from the spreadsheets column okay again
i'm not going to do it because i
because i don't need to do it okay i'm
going to come over here we're going to
sort by sector here
okay and then let's come down here a
little bit notice i've got
i got my dividend yield here i've got my
percent change by the way this is a
percent change column
that is set for that same time period
and how did i do that well i came
up here to symbol i chose customize and
i typed in
perc and i got the choice to use percent
change
then i moved it over okay and after i
moved it over i came over here
and i set it for the number of days
which is eight days remember i was
telling you that if you look on the
chart
from 8 19 which is the beginning point
to today there's nine days
when you use percent change you take one
away from the total number
of days it's just the way that it counts
back it doesn't include the current day
so if we're talking about nine days
total this is day number nine
we want to use eight here because it
doesn't include the current day and then
it counts back like this
so you take the current day the total
amount of current days subtract one and
that's where you want to set that
okay so we have that set so this is our
percentage performance we can come down
we know that information technology
overall during that period of time was
up 7.67 percent
we don't need to be that high because
we're talking about dividend stocks
and since we're talking about dividend
stocks we're going to play the part of
the investor that wants the stock to be
paying a dividend
of at least two percent let's why don't
we go with at least two and a half
percent
so we've come down here and are we going
to get information technology first
let's scroll down there's cons you know
what here's here's consumer
discretionary why we're here on consumer
discretionary because this was also an
area
why don't we start here with consumer
discretionary so where's consumer
discretionary here it's right here so
consumer discretionary over that period
of time was up 3.74 percent
so we'd like to find something here
consumer discretionary that was up
3. 3.74
like its underlying sector this one was
up three point six nine percent
plus that plays a dividend okay of two
and a half percent or more this one does
a 390.
now we're looking for the last part of
our puzzle here like analysts to be
generally favorable they don't all have
to be on board but maybe one or two of
them on board
i'd like there not to be any of them
that are suggesting to sell the thing
so i'm going to change here for just a
second come over here to the analyze tab
i'm going to come down here to
fundamentals this is where we see our
analyst
we're going to come back over here to
this leg click on it
and there we go we got to reduce here
it's kind of going in stair step mode
like this right
okay so let's go ahead and hold off on
that it's not it's it's not necessarily
you know it's not necessarily totally
totally out of contention but let's
let's just hold off on it for now okay
let's keep on coming down here again
looking for something that's
that the percentage performance is a
little bit is a little bit over three
like the sector was
dividend yield of two percent or more we
come down here looks like we have vfc
seven percent two point nine percent
what are analysts thinking about it
we've got a couple of longs here we have
a cell and reduce you know i'd like to
just kind of stay off this side we're
going to play the part of the investor
would like to stay off that side of
things
there may or may not be there may or may
not be be anything here you know
there's always that possibility here we
have
um three the dividend deals are a little
bit low and this is for income so we
want to would like our dividend we'd
like our yield to be
at least at least the average on the s p
500 which i believe right now is
currently about two percent a little bit
a little bit above that
okay the price performance doesn't need
to be as strong because these are paying
these are paying a dividend but we
would like to have some positivity was
that price performance again here on
these folks
that was at 3.74 percent
0.74 percent so here we come down here
what have we got
on our there's our yield 3.7
you get anything in here we may or may
not that's okay
you have something great if not we're
not gonna
we're not gonna push it too much how
about pets and there's pets
petmet express so we're 3.8 we have a
dividend deal with 3.22 so the next
thing we'll look at would be the
underlying
technicals what do the technicals look
like on pads
and we use the same technical process
here that we would use on on any kind of
an entry one thing that stays consistent
here
is our is our technical rules for
potential entry
okay so let's come up and take a look at
the chart
and i'm going to switch gears on my
chart i actually want to save this chart
here in case we need to re
reference back to it so i'm going to
move forward here one chart
and i'm going to change this chart here
so that instead of one month we're
looking at three months
okay and i want to add a study down here
the study we want to add is going to be
average true range
atr because we use that
in our analysis here and let's just make
this so that we can see things a little
bit better
three and go right here say
okay apply
and say okay and let's tie this into
pets
p dts pets okay so
pets has come up here it's pulled back
so we're usually looking to enter in on
a breakout or bounce we don't have
either one of these right now but this
stock would be on our radar okay
one of the reasons the dividend yield is
as high as it is is because the stock is
pulled down
you know this is something that we
actually expect to see maybe look i said
wait a minute i don't want to buy that
stock
it's come down too much well take a look
a little wider view
okay has had a big move to the downside
we can see that it has been moving up
here nicely to the upside
we could put in a contingent order to
take a trade based on it
closing above today's high tomorrow that
would be a possibility as well
just just put in a little contingency
order how are we doing on time here
folks it looks like we're at about 2
30. um in the interest of time
so so we've basically done this with
consumer discretionary we would do the
same thing with some of those other key
industry
industry groups that we were looking at
right as we scrolled down we'd run into
information technology
we would also run run it run into some
of these other key groups as well
let's just run through here i've got
pets noted
anybody else here with a dividend yield
in this little section
here give it dandelion some nice price
performance i'm not seeing anything else
here so we have that one candidate
okay in the interest of time let's go
ahead and we'll put in a contingent
order on this one because i do want to
cover the other
process that we use here and that's
that's primarily looking
at dividend yield okay so
i'm gonna i'm gonna highlight this right
here and say here's our atr right here
so if we wanted to enter in on a bounce
here tomorrow
we could say you know we probably don't
don't need an entire
atr above this high right here maybe we
want maybe we want 10 percent of that
atr
above today's high tomorrow in order to
take an entry we may or may not get
filled right
but what was yesterday's high on this
yesterday's high
was 35
41 and the current atr is a dollar for
10 percent of that would be what 10 of
that would be
14
14 cents right
so we could say that let's grab a little
calculator here for just a second
we could put it in order this is okay
when this stock
this this is going to be aggressive
because we're saying when it trades
rather than when it closes up that makes
it aggressive right
we're saying that if this stock tomorrow
gets up to today's high which is 35.4
plus 10 percent of the average true
range
i'm sure where that came from let's try
that again 34.76
plus ten percent of a dollar forty
is going to be fourteen cents right plus
point one four
okay so if we're at if we put an order
in there
if it's trading at 34.90 we're willing
we'd like to buy it but the most we're
willing to pay for it
let's say 34. let's let's just say third
let's just say 35 even
okay because it may be going up quickly
or may actually open up above there
so how would we do something like that
well
one of the things how how much money
have we got to spend here well we've got
about we've got about 12 000
let's say we wanted to put 6000 that in
this stock
we'll we'll figure out the quantity here
momentarily okay
let's first of all put together our
order i want to i want let's reiterate
where this is at now if
if we do get this bounce then our
support level is going to be at these
lows right here
meaning that if i grab a line right here
and bring it across the bottom right
here
see right there so if we get a bounce
tomorrow that's going to be our support
level
and that support level is let's just
make it so we can see that
and take a look at it on the left that
puts our support level at 3419.
and what we've done in here is we've
said we'll set our stop loss
at 80 percent
of the average true range below that
support level
so where where would our stop loss be
then again these stop losses are not
guaranteed to take you out
at the stop stop-loss level they're
meant to try but there's no guarantee
because stocks can be moving very
quickly they can gap and all
all of all other sorts of other things
can happen but let's take our
um our our average true range of a
dollar
46
one dollar and 46 multiply that by
0.8 and then let's find the difference
between that and our support level right
here
that'll tell us where stop loss will be
34
19. okay so our stock would be then
at and two 33.00
okay so the last thing to figure out
would be our quantity then
you know our stop's going to be we know
where what our entry rules are going to
be
how about our quantity well we're going
to have a limit order to buy the stock
at 35
at the most we've said we're okay
spending six thousand dollars on this
take our six thousand divided by thirty
five dollars
that would mean we could get one hundred
and seventy one shares let's
not knock that down 171 shares
so if we're going to get 171 shares
then what is our what is our theoretical
risk and i say theoretical
because we don't know if that stop loss
will work okay
i mean it's there we hope it'll work but
we do but it's not guaranteed to work
if we enter in this stock at 35
and we get taken out of that stock price
and that's a big if because we're not
sure if it'll
function like that we get taken out of
3302 we've lost 1.98
and if we're getting 171 shares
then our theoretical risk on the trade
is going to be 338
and that's something that we would want
to note in our trading journal
so what would the order look like then
well we're going to right click on the
chart
we'll come down here and choose by
custom with stop
and here's our order right here on our
order
we want to go 171 shares
just tie those together 171 shares this
is our order to enter and we're going to
make this a
stop limit buy order and the first price
is where
this is the stock price this is where
the price needs to be in order in order
for in order for us to say yeah
we want to buy it now okay and we said
it needed to be at 34.90
if it's at 34.90 or higher then we want
to buy it but the most we're willing to
pay
is going to be 35 we just want to keep
that in there for tomorrow if it gets
filled tomorrow great if it doesn't
we're okay passing on things
and if the market's moving down tomorrow
probably won't get filled but we're okay
with that
if it does get filled we want to have
our stop-loss order be good until
cancelled
and the stop-loss level that we were
looking at was 33
and two cents okay
so what do we know about this stock then
well we know that this talk has a
history of paying dividends
we can we can look at some of our lists
and kind of narrow narrow that down a
little bit further to see how long of a
history it has
we know it has a history of paying
dividends okay
we know that um that that its yield is
relatively high right now at 3.22
we can see why that is because we've
seen the chart pull it down somewhat
we can all we also know that in looking
looking what analysts are currently
saying about the stock they're
they're neutral here with one buy
they're they're not all over here that
that may help help us feel a little bit
more comfortable now by the way
investors we can go in here and dig a
little bit deeper with regards to the
fundamentals ourselves
but in here we've opted primarily to go
with to go with
analysts at to go with the analyst
expectations here sometime
we'll probably do is go ahead and come
in here and tear some things apart
looking at looking at history of
dividends and
and and and those types of things we've
already done that somewhat because they
wouldn't be on this list if they hadn't
paid their dividends for at least five
years in a row
and possibly 24 years in a row and
possibly 25 or more i don't know i don't
know i don't know pets
pet pets med has been around that long i
don't think it has okay
but before we send our order in here
then let's just i'm going to come over
here we're going to change this so this
is a this is a listing of all those
other lists
let's just come over here though and
let's see where pat stacks up in these
folks okay
i'm going to come over here to dividend
challengers these are the five to nine
years
dividend folks and let's see if pets is
in here
elemental is pets in here
p-e-t i'm not seeing pets in here okay
and i don't think pats i think i think
pets is probably a
dividend contender let's check it out
dividend contenders so these are these
are folks that are 10 to 24 years
there's pets in here there's pets right
there so pets has a
pets has a history of paying and
increasing their dividends
for for at least 10 years possibly all
the way up to 24 years and here it is a
consumer discretionary stock
okay so that's where it fits in so let's
go ahead and send this order in again
not sure if it'll be filled if it
doesn't get filled that's okay we can
we can take our marble somewhere else
now the other thing we want to look at
here we're running a little bit short of
time but
for our income stocks we use two
different processes
okay but we use these same processes
we're not changing them around okay so
if you look at
if you look at additional sessions we'll
basically be looking at these same two
processes
the second process we use is to get a
listing it
is to take one of those listings of
dividends of dividend stocks okay
i'm going to go to the dividend
champions here okay
dividend champions where are they
dividend champions here they are right
here
okay so all these stocks have been
paying dividends for
25 plus years you know there's a there's
another name for some of these talks
about dividend mega champions or
something i don't want to call dividend
goliaths i don't know
they've been paying paying dividends for
like 40 or 50 years but
but these are dividend champions we're
going to do now is we're going to sort
by yield
i'm just going to pull those i'm going
to bring the highest yielding ones up to
the very top
we were sorted by yield now why are we
doing this well this is
this is a different process altogether
but it's still because we're talking
about
income we're talking about dividend
stocks this is something that a fair
number of dividend value investors do
and the reasoning behind it is this
if you think about how the dividend
yield is calculated
you basically take the trailing
trailing 12 months of dividends
add them all up okay and you divide it
by the price
okay well what happens when this when
the stock goes down like this
when the stock goes down like this the
price goes down
and the dividend yield goes up
what happens when the price goes up like
this
and the price goes up like this the
price goes up what happens the dividend
yield
the dividend yield goes down so if you
have
companies okay that have a history of
paying dividends
they've been in business for a long time
doesn't it make sense to consider buying
those stocks
when the dividend yield is high when
this has occurred
because when the dividend deals gone
high the stock is usually at historic
lows
and what's a real simple rule with with
regards to investing
i was told this when i was 11 years old
actually i think it was 10 years old
because i had a neighbor that was a
stock broker i asked him hey how do you
make money in the stock market he said
hey ken
it's real simple you just buy low
and you sell high there's really nothing
else to it of course i found since then
there's a whole lot of other things to
it okay that's kind of simplistic
simplicity of it
so we can take a listing of stocks like
dividend champions have been paying
dividends for 25 plus year there's no
guarantee they will continue to do that
there's no guarantee they will continue
to stay in business
but we can we can sort it by the highest
dividend yield which is what we've done
here
sorted by the high student india and
we're going to come in here we're going
to look at some of these
we're going to look to see what analysts
are saying because these stocks have
sold off
there's a reason they've sold off could
be the sector is out of favor could be
the market is out of favor
it could be the company companies having
some real problems we're going to turn
it over to the analyst okay
to help us to determine whether or not
after the
off if they represent a potential entry
opportunity
now we could do some we could do some
fundamental analysis on our own i want
to underline that we do have some we by
the way we have some webcasts
on running your own fundamental and
fundamental and at
fundamental analysis okay michael
fairborne does
that that does a really nice one of
those and also
we're talking about technical analysis
here cameramate has
has a great getting started with
technical analysis webcast he teaches on
monday mornings
okay so so so also keep keep those
things in mind okay and
before we wrap things up here i'll show
you i'll show you where you can find
those all right
but we'll come down here and then what
we'll do then is
is let's go ahead and take our drawing
tools off here i'm going to change
i'm going to change my screen here to
the analyze tab here so we're looking at
our analysts again
i'm going to come over here now brace
yourself because if we if for example if
we just pull up one of these bad boys
let's pull this up we're going to make
this chart a little bit longer
just we can kind of get a night rather
than nine months let's go out
oh two years and expect to see
these stocks having sold off with these
high dividend deals just to kind of
underline what we've been talking about
so you can see it visually see there's
xom
motrin knows how they're selling off
your way low
i've also got a custom study here that
helps us here
let me bring this up this this is nice
because it shows us a little bit about
where that dividend yield is
from a historical standpoint
okay this is top 20 percent how this is
like the bottom 20 percentile
if we look at uvvv notice the big
sell-off and has come down here
the dividend yield is popped up here in
the upper 20 percentile
probably see the same here with mo
actually most
most come down here so it's actually
more in the middle here xom has been
down for so long i don't know how
excellent is actually up here as well so
so we kind of know what
so now we know what's going on we do is
shift gears here the analyze tab
and don't you know this this
this is what we actually expect us to
see analysts over here we don't expect
to see them over here
but we're looking to see how far down
this dividend yield goes before we start
seeing some analysts
show up over on this side of our chart
here then we'll check the chart itself
let's go through these relatively
quickly because we're a little bit short
of time
that one actually isn't too bad on oh
you know we're in the middle and then we
have one long
uvv all centered um a t and t
kind of centered a little bit over to
the left there it'd be nice if they
could unload all the debt that they that
they that they got when they when they
had their big acquisition a few years
ago
i'm gonna go through these relatively
quickly though folks nnn
primarily in the middle a little bit a
little bit over to the side this is a
national retail properties this is a
reit a real estate investment trust are
you okay with those and those
those are okay for consideration mercy
mercury general look at that
dividend yield of 5.63 we're all over
here on the accumulate side it makes me
wonder if the chart's going to look that
bad if we have this many over here it
just may
be paying a historically high dividend
that that's possibility let's look at
the chart
i actually like like to see the chart
sold sold off like this it's
it's sold here the dividend yield yield
was rather high
actually we're actually sort of sort of
at the low end of the spectrum here when
we're looking at two years
okay let's go back a little bit further
here maybe go back five years and see
what we're looking at are we still
lower end of the spectrum well that
brings us it to bring us up about the
midpoint
so it would have been nice to catch it
right here and catch it right here
we're still relatively low in the area
though okay
and analysts look pretty good if you
look at it for the five years we are
relatively high from a five-year
perspective just not
as low as these big as low as high as
these big dips what
would have gotten us so let's let's
let's look at
mcy here then and maybe do a little
example here okay here's the mcy little
coming up we're coming up
what what would be an entry here well
again we're usually looking at taking an
entry on a bouncer breakout
see how this sideways moving right here
i think i think what a fair number of
technical analysts would do
is then identify this sideways movement
with a horizontal line like this
let's say okay when we break out of this
sideways movement i want to check volume
to see what's going on
and we'll go ahead and do that here for
mercury
rather than do an order i'm going to
create an alert here it's possible that
we may get filled on that other order at
six thousand that'll basically fill out
our allocation
for this area i don't know that we will
but it is a possibility
let's just put this in here though as an
alert okay
when we where do we want to be alerted
at well let's see what that
what that price is over there let's show
it here over to the left
so we want to be alerted when this stock
hits hits 40
let's let's let's let's go with 46.50
46.50 give me a heads up here on mercury
so come down here what you're going to
choose create an alert
i'm going to come down here and say when
this stock trades at or above
50 46.50 send me a note
by the way you can have this set up so
it actually will send a note to your
cell phone if you like
we'll just give you a note on your
screen get bells and whistles or
whatever
i'm just going to say check
check for volume because on those
on those breakouts it's nice if you have
lime it's not absolutely required okay
but it is nice if you do have volume on
those breakouts
check for volume then i'm going to come
over here and say this
is a
income stock income
stock right there and we'll say create
there we are right there
okay all right folks well i did indicate
that i didn't want to show you one other
area here where you can get some
additional stuff here
so when you go into that education tab
okay
you can come over here to your archived
webcast
you must go over here to your webcast
calendar i'm just going to click on
webcast calendar right here
and these are these are some of the
things that i was alluding to we've
talked about technical analysis trends
in
life here is getting started with
technical analysis 11am with our very
own cameron may who's over there in the
chat window helping you out
we also talked about fundamental
analysis and michael fairborne i believe
he teaches a couple classes on that
uh let's see michael where are your
classes here
you have to wrap things up here pretty
quick there's michael there growth and
value strategies but he has one
building blocks for self-directed
portfolio
here it is right here folks right here
investing
in value stocks right here and that is
on tuesdays at 6 pm eastern time
so if you if you're saying you know this
is kind of interesting looking at those
analysts but those analysts are not
always right and you're absolutely right
the analysts are not always right maybe
i want to do a little bit more
more checking under the hood myself this
is a great place to get started we'll
we'll also probably do a little bit of
that
here and there with regards to some
individual stocks as well
all right everybody well let's go ahead
and wrap things up here today then
and we'll come right over here and here
we go so what do we talk about here
today
well we we reviewed our allocation
performance we reviewed market sectors
we loaded up our dividend stocks
we searched by sector to identify a
candidate the candidate we found was
pets we we searched by yield to find it
to find a candidate and the candidate we
found was i believe was mcmcy
we put in a paper trade we also put an
alert to take a look at as well
next time i believe next time we'll be
swinging background we'll be looking at
growth stocks okay
growth growth stocks next time okay
all right everybody just reminder that
in order to demonstrate the
functionality platform we need to use
actual symbols however td ameritrade
does not make recommendations
or determine the suitability of any
security or strategy for individual
traders
any investment decision you make in your
shelter account is solely your
responsibility
by the way investors i just noticed that
there is a survey over there in the chat
window
i am often i often have folks say to me
hey thanks ken i really appreciate this
i really appreciate that
could be during a session it could be
over on twitter a nice way to show
appreciation
is to respond to that survey okay so if
you can take just a second respond to
that survey that would be greatly
appreciated especially if you could
leave a note or two
i i and and if you if you responded to
surveys in here before that's totally
okay
just just remember that that responding
to surveys is the gift that keeps on
giving okay
so if you could do that of course that
that that would be appreciated
all right everybody well hey thanks
again for joining us here today
appreciate that just a little reminder
um
i hope you have a fantastic rest of your
week you know mondays is
kind of you know kind of kind of getting
getting back into the swing of things
hope you have a great week
best of success you're investing in
don't don't forget to be careful out
there
be cautious let's get on the other side
of this whole thing as happy and healthy
investors thanks everybody
and hope to see you next time we'll
catch you later
you
