What did Phil Town mean by "Buy stocks on sale"??

Question

I was hoping Phil Town wouldve talked more about that.

What did David Bach mean by "Pay yourself 1st.", how do you do it & what percentage should I take out of my mthly. pay?

I watched THE MILLIONAIRE INSIDE on cnbc, (which airs again on 5.28).

If anyone knows the answers & if u can teach anyone about stocks, please let me know ASAP via I.m or email.

Thank u much,

~E ^~^

Answer 1

In general, buy stocks when the go down, the problem is how do you know when they hit the bottom? Unless you are psychic I would go with dollar cost averaging, investing a set amount every month, that way when the stocks go down you are getting more stocks for your money that month, and when they go up your stocks are worth more.

Answer 2

I believe he was refering to stocks that are in the low phase of their cycle.




But that is easier said than done. Low price is not the answer. He makes it sound a lot easier than it is. I saw the show. Basically he use hind site to ID good stocks.

Stocks are very tricky. Education is the answer. You have to do research and understand what you read before you can make decisions.

The other way is to follow the advice of publications like Barron's. They do the onsale, thought best. Identifying the good complanies that have had a recent decrease in their price.

Here is an example of that type of article taken from barrons

'SHARES OF MORTGAGE LENDER IndyMac Bancorp have lost about a third of their value this year as investors fret about lower-income America's problems with paying back home loans.

But this is one lender that doesn't deserve the subprime stain.

The worst of the IndyMac's credit problems stemming from the subprime bust already seem to be baked into shares of a company that has a limited exposure to these risky loans in the first place.

Trading at 1.2 times book value -- versus mortgage lender peers which trade at 1.6 times -- there doesn't seem to be much room for the stock to fall as the company's hybrid thrift and mortgage banking model gives it flexibility to maneuver through tough environments.

And the stock's 6.5% dividend yield offers some margin of safety.'

http://online.barrons.com

You can read barrons every saturday at most library's for free.

For example I sterted by reading barrons, I have averaged about 10- 14% return on my money for the last 15 years.

Answer 3

I believe Town meant you should invest in stocks that are far below their 52 week high, and close to their 52 week low.

I believe Bach meant you should SAVE a percentage of each paycheck and put it into a Money market, a CD, an IRA, or a 401(K) or whatever works for you.

I suggest you take at least 10% out of your monthly pay. More if you can do it. First priority: invest the max allowed in a 401(k). Then put as much as you can into an IRA.

Answer 4

Read the book by Phil Townsend called Rule # !1 investing. It explains all of this. Buying on sale is paying less for it than it is worth. You pay yourself first by taking money out of your account to invest before you do anything else. I like to take 10% .

Answer 5

When stock prices drop, buy the stock low so when they go up again, you can sell them and make money.