Friday, January 20, 2012

Why we place lots of bets

Earlier this month I placed a bet on Progress Energy (PRQ). I was certain it was destined to go up in the coming year, and if not this year then next year for sure. I bought some shares at $12.10. Since my purchase, PRQ has hit a new low for the past 12 months: $10.27. (See the graph.)

Everyday since I bought my shares, the price has been on a downward path. I'm going to watch the stock in the coming days. If it continues to tumble, I'm in for some more. I think its dividend is fairly safe and that dividend gives this stock some breathing room, in my estimation. If the price dips to $10 or lower, the yield will be four percent or a little higher. That is an adequate yield for my needs.

Anyway, I don't have all my investments in one stock. I own more than PRQ. (No surprise here.) Because I own a rich mix of stocks, I have benefited from the recent mild up tick in stock values. My portfolio is up about $10,000 since the first of the year. The gains have muted the losses suffered by PRQ.

If you've been following this blog, you'll know that I bought a little Royal Bank when it dropped to about $45. RY is up nicely. And a few months ago I bought an American ETF called REM. It pays a nice dividend. I'm enjoying having it in my portfolio and, best of all, it is up about two percent since its purchase.

Around the same time that I bought REM, I bought ZUT. It is up about seven percent since becoming part of my portfolio. My AUSE is down but not by a lot and it is paying a nice dividend which eases the pain. And the PWT that I bought is up almost 20 percent in the few weeks I've own it.

One investment that I loved, DRW, failed to deliver a dividend this past December. I don't care that the Scotia Bank group is reporting its yield as 12.8 percent. In my books I have it down as delivering about a six percent yield. That's still good but it isn't good enough for what I see as the risk. I'm holding but no longer interested in buying anymore --- not even a little.

So, as you can see, I can afford a temporary set back with PRQ. Gosh, I do hope it is temporary. Stay tuned, and sometime in the next 12 to 24 months we'll have the answer --- maybe.

This didn't pay me any 12.8% in past 12 months.

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