I Brought One Share Of IBM
I just brought one share of IBM as a symbolic action, to help guide my investment strategy to where I want it to be.
By. Jacob
Edited: 2020-08-06 12:39
I decided to make an exception and break with my rule of investing a minimum of 1.590 USD (about 10.000 DKK), and I brought just one share of IBM (International Business Machines).
The thing is, often you know in your gut which companies are solid investments, but you rarely seem to actually make the leap and invest in them. There can be many reasons to this; in my own case it is mostly the stock price and uncertainty.
I know it is generally bad to do this due to fees eating your profits, but I also realize that the small amount I pay in brokerage fees (~13$ at Nordnet) can be quickly recovered through return on capital. Of course, if I expect to recover it only through dividends, then it will be at least 2 years. However, IBM is a technology company, and they also work with some pretty high-tech stuff, including quantum computing, so I figure if they suddenly have some major breakthrough, even a single share might be worth keeping in my portfolio.
At the writing of this article, IBM's Dividend Yield was placed at 5.01%.
Besides this, I also expect to buy more. My decision to buy just a single share was mostly symbolic, since I know I would probably invest in something less solid if I did not buy into IBM now — and I also need the diversification. This decision will help me make my next investment decisions. Other stocks on my radar currently include MMM (3M), KO (Coca-Cola) and BAC (Bank of America Corp).
I also look at it this way, that I am buying into future cash flow, and not necessarily short-term gain. I do not want to sell again, ever, unless I really have to. Dividends often seem to cover my brokerage fees anyway, since I have some good monthly payers; but obviously it is often best to wait until you got a bit more cash to invest.
Also, I do not buy shit usually. Meaning, I do not waste money on crap I do not need. I still own the same laptop I did some ~6 years ago, I rarely buy clothes, and I almost never buy candy. The only thing I really miss is a good cup of coffee on a Café somewhere. But, these are tough times, and investing is more important to me than random fun.
EPR Properties and Apple Hospitality
I still own EPR Properties and Apple Hospitality, currently both sits around a -50% loss. I am even tempted to buy more — the problem is that they also suspended their dividends, so I am currently looking to diversify into more solid dividend payers. As I write this, I probably have a combined 2000$ loss on these companies, so it is by no means massive — and you know the saying, that you have not really lost, until you sell at a loss!
Or as Dave Ramsey says:
The only ones that get hurt on a roller coaster are the ones that jump off.
I already decided that I am not going to jump off just because times are tough.
Since I am very tech-focused, IBM has actually been on my radar for a long time. I was even considering it before COVID-19, so it was probably just a matter of time. Currently I am also a bit overexposed to high-risk stocks, so that is another reason for me to diversify. I do not plan on selling either APLE or EPR — I might even buy more if the opportunity arises — currently I am just focusing more on quarterly dividend payers.
I heard a rumor that APLE is currently trying to become cash-flow-positive; when that happens, they will be looking to re-evaluate the whole dividend situation — I hope it happens soon, but word is also out that we may be looking at a slower 1-3 year recovery process. I really miss the dividend from APLE, it was the biggest monthly payer in my portfolio.
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