The Motley Fool's Weekly Editors' Picks
Fools were out and about this past week in an investing world jam-packed with actions and ideas. Here are three articles you might find useful as you decide how to invest your money.
7 Rookie Mistakes Even the Pros MakeA lesson learned is sometimes all that can be salvaged from the wreckage of an investing mistake. Fortunately, the wreckage doesn't have to be your own. Joe Magyer, advisor for the Motley Fool Inside Value newsletter service, brings investor seven rookie mistakes to learn from.
Joe starts with a mistake he made back in 2003, when his shares of Philip Morris, now split into Altria and Philip Morris International, nosedived when the Justice Department announced it was seeking $289 billion from Big Tobacco. "I panic-sold," Joe write, "only to watch the stock climb back and sheepishly repurchase my shares at a higher price. Ugh."
Joe's advice also includes cautioning investors against relying too much on Wall Street guidance and using leverage to invest by buying on margin.
Read the article to learn some lessons the easy way.
The Hot Alternative to Dividend StocksCorporate bonds may be a hot alternative for return-hungry investors, but are they right for your portfolio? Fool analyst Dan Caplinger took a look at the world of high-yielding corporate bonds, especially those rated "junk." Corporate-bond investors earn more than those investing in Treasury bonds, but they take on the risk that the company could go under.
Dan notes that prices have already jumped substantially, pushing some companies to sell their bonds now rather than later. For instance, Goldman Sachs (NYS: GS) -- a player in the less-than-solid global financial situation -- locked in a 5.3% yield on 10-year notes last month, while JPMorgan Chase (NYS: JPM) wrangled a 5.1% yield on 30-year debt. Both moves will help the companies lock in cheap capital for decades.
Read the article for more insight on the risks and rewards of investing in corporate bonds.
1 Stock for New InvestorsFool contributor John Maxfield struck a chord with this article. "Investing for the first time can be a harrowing experience, with thousands of stocks to choose from -- let alone mutual funds, ETFs, derivatives, and all sorts of other investments," John wrote. Investors nodded in agreement, and John went on to first lay out a key thing to know about the stock market: "Expecting a big payoff is nothing but speculation -- the same thing you do at a horse race."
Greece-based shipping company Dryships (NAS: DRYS) is an example of a speculative bet, John wrote, with shares sinking from a $70-$100 range in 2008 to just over $2 today. "One of the popular theses on this stock is that it will rebound as soon as the European Union gets its fiscal house in order," John wrote, and that's a classic example of a speculative bet that could end up costing you money.
McDonald's, on the other hand, has consistently made money for shareholders through an increasing stock price and dividends, John wrote.
And ... drumroll, please ... that one stock John promised in the headline: Procter & Gamble (NYS: PG) . "Your first few stock purchases should build the core of your portfolio," John wrote. "As such, you want them to be solid, stable holdings that -- most importantly -- don't lose money."
P&G has several things in its favor, according to John.
- It's a Fortune 500 corporation with a successful track record dating back 175 years.
- It owns 24 billion-dollar brands.
- It's globally diversified.
- It pays a 3.3% dividend yield
Read the article for more on how to invest well.
To get a hot stock tip from The Motley Fool's chief investment officer, you'll want to get the free report "The Motley Fool's Top Stock for 2012." Check out the details on this "Costco of Latin America."It's free.
At the time this article was published Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article.The Motley Fool owns shares of Altria Group, Philip Morris International, and JPMorgan Chase.Motley Fool newsletter serviceshave recommended buying shares of Philip Morris International, Procter & Gamble, Goldman Sachs, and McDonald's. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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