The Prudent Investor


No Tears
March 1, 2007, 11:02 am
Filed under: Update

A good deal of this whole thing is an experiment in a number of ways. I’ve never made a portfolio public before (since writing for The Motley Fool seven years ago, I’ve always been willing to state the positions I’ve held), so that is an experimental first for me. I’ve also never publicly explained most of what I am doing when making a company and purchase selection, so that is also a first.

Another experiment is the use of Zecco.com, and so far I am glad to report that things have worked out satisfactorily.

In my last post I mentioned that I had sent a check to them on Friday to fund my account. Today, during a lull at work, I happened to notice that the Market was down about 375 points. A big smile came onto my face. Sure, this is the sort of thing that calls for tears for most, but DRiPpers are a different breed.

Dividend ReInvestment Programs (DRiPs) allow the shareholder to make numerous purchases over time, oftentimes without cost. A downturn in the Market is not cause for despair – quite the opposite. As long as one has selected quality companies and is looking at the long term, they know that things will come back. The drop in the Market means that things are on sale, and don’t we all love sales?

The only question was whether or not I would be able to take advantage of this situation. I had only sent the check on Friday, and when I logged into my Zecco account on Tuesday I found that the money was sitting there, ready to be used. I had already spent almost two months to come to the decision to buy SJW, so this plunge could not have come at a better time. I like to smile.

I placed a limit order for 15 shares of SJW and got them at $35.51. This is more than $2 less than yesterday’s closing price, a 5.5% drop. By the time you read this it is certainly possible that it may have fallen even more, but at this point I am satisfied with the dumb luck of the timing of the first purchase for this portfolio.

Initial funding: $1,000.00
Purchase 15 SJW @ $35.51 -$532.65
Balance: $467.35
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2 Comments so far
Leave a comment

George,

I lurk on your drip site and occasionally chime in. I enjoy it for the good info and the friendly give and take. I also came over from the Fool when you first set it up. But I digress!

I notice you show an initial funding of $1000. I thought Zecco required $2500. Appreciate your reply. Enjoyed your work on these water drips.

Comment by David Brotton

David –

I remembered reading a post somewhere stating that also, but saw nothing on their site to indicate that was the case. I sent $1,000 for the initial funding and saw that amount when I logged in, so apparently it is not a requirement. My plan is to fund this portfolio with $3,000 (I will send another $2,000 soon), adding $100 per month for monthly purchases. I am looking to initially select six companies, with an initial $500 purchase of each company … at least, that is the plan.

Comment by George L Smyth




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