PDA

View Full Version : Fifth Third Stock Market Questions



BUTLER REDSFAN
02-20-2009, 10:49 PM
Other than having 401k's at some of the jobs I have had I have never delved into the stock market at all directly..The last I saw earlier today 5/3rd was down to $1.03 a share...I know the banks are in chaos right now but if you were a small timer like me and say you just wanted to buy say 50 shares, wouldn't this be an ideal time to buy?..yes, if they go under you are out $50.00 but if a year from now they are worth $50.00 a share then that's $2500.00 I didn't have before.

My questions are:

Can you buy shares on your own or do you have to go through a broker? I realize you need a broker when you want to sell your shares. Who is the best broker to use( in the West Chester,Oh area) if you are just going to be buying a little here and a little there. I appreciate any helpful info. Thanks.

BuckeyeRed27
02-20-2009, 11:01 PM
No you cannot buy shares on your own unless you own a seat on a major stock exchange (I believe one sold for about $1.3M a few years back).
So yes you have to pay a commission through on online broker. If that's what you really want to do then you would want to use an online broker like Scottrade, TD, Schwab, Fidelity or someone like that where the commissions will be fairly low and there will be some type of service and execution.

redsfandan
02-20-2009, 11:57 PM
My questions are:

Can you buy shares on your own or do you have to go through a broker?
Unless it's through something like your employers 401k plan you do need a broker to buy and sell ANY securities (at least the initial shares). It's a regulated industry but unfortunately for us some things are still "overlooked" (hence the current mess). With some stocks you may be able to buy the initial shares through a broker and later shares though a DRIP plan.


I realize you need a broker when you want to sell your shares. Who is the best broker to
use( in the West Chester,Oh area) if you are just going to be buying a little here and a
little there. I appreciate any helpful info. Thanks.

I've used Scottrade ($7/trade) and they're ok. A month ago I had a similar thread and
someone recommended E-Trade but that thread was lost when we lost two weeks of posts.

As far as whether to buy now I don't think anyone should be in a rush to buy unless you want to do some short term bets playing on short term swings of a security and that approach is much more risky than normal with how volatile the market is right now. Alot of stocks have become very cheap but I don't think that will change much in the next year.
Make sure your finances are ok first (6+ months of savings in case of emergency if possible, etc). Then it wouldn't be a bad idea to put some money in some select stocks concentrating on the better companies that have had their stock price hit hard. For example, GM closed friday at 1.77 but Ford closed at 1.58 and if I was to buy one I'd rather have Ford simply cuz their books are in better shape. (Disclaimer: I don't work for Ford and am not in the financial services field so I won't pretend to be a financial "expert". I'm not liable for your mistakes or any losses. Only mine :p:) So make sure to do your homework before you buy anything. But it's important to be realistic about a stock comeback of any company. I hate to say it but I just wouldn't expect the stock of any company to increase THAT much (like the $1-$50 example you gave) and probably not within a year either.

kaldaniels
02-21-2009, 12:01 AM
I believe Sharebuilder.com is a good place to start for new investors.

Red in Chicago
02-21-2009, 12:04 AM
Other than having 401k's at some of the jobs I have had I have never delved into the stock market at all directly..The last I saw earlier today 5/3rd was down to $1.03 a share...I know the banks are in chaos right now but if you were a small timer like me and say you just wanted to buy say 50 shares, wouldn't this be an ideal time to buy?..yes, if they go under you are out $50.00 but if a year from now they are worth $50.00 a share then that's $2500.00 I didn't have before.

My questions are:

Can you buy shares on your own or do you have to go through a broker? I realize you need a broker when you want to sell your shares. Who is the best broker to use( in the West Chester,Oh area) if you are just going to be buying a little here and a little there. I appreciate any helpful info. Thanks.

It's going to be much more than a year before it ever sees $10/share, let alone $50/share.

You're better off putting that $50 under your mattress ;)

Red in Chicago
02-21-2009, 12:15 AM
Similar to Redsfandan, I use Scottrade for my wanna be a stock broker money. They're cheap and have an easy to use website. You have to keep in mind, that if you are only buying a few shares here and there, that those $7 commissions charges can add up. On top of that, you've got to add in $7 more when you sell.

Years ago I had a "drip" plan for Coca Cola. One of the pitfalls with some drip plans, is that you aren't able to buy shares on the day you want, but rather on the day of the month that the company buys them for you. It's also kind of a pain in the butt at tax time after you've sold your shares.

Unassisted
02-21-2009, 12:17 AM
The last I saw earlier today 5/3rd was down to $1.03 a share...I know the banks are in chaos right now but if you were a small timer like me and say you just wanted to buy say 50 shares, wouldn't this be an ideal time to buy?
It's interesting to me that you're considering buying bank stock now. My dad just bought shares of another bank in Ohio. He'd been waiting for the price to reach a certain low point, which they did this week.

I've owned shares of BAC for about 3 years. They're worth about half of what I paid for them. I picked BAC because Jim Cramer liked it. I had noticed it has a large number of customers where I live and charges some of the highest fees. I'm sitting tight with the BAC stock I have and not picking up any more.

redsfandan
02-21-2009, 12:36 AM
One possibility as an alternative to traditional stocks and mutual funds is ETFs. They are similar to an index (or mutual fund) so they have less risk than an individual stock but they trade openly throughout the day unlike a mutual fund. (edit: They, also, can be bought via any broker.)

Ltlabner
02-21-2009, 06:58 AM
This isn't the market for trying to get a quick score IMO.

5/3rd was around $25ish last year IIRC and its high was 60ish so the chances of it going to 50 in the next 5 years are slim to none.

I also wouldnt be looking to invest in a sector were talk of being nationalized has been going on (denials of the White House notwithstanding). Forget the political stuff...it just doesnt make sense to be putting money into banks from a financial prospective IMO.

Think precious metals.

Redsfaithful
02-21-2009, 12:23 PM
5/3 is probably literally insolvent if its trading that low. Nationalization is a serious concern. If you want to gamble your money there are probably more enjoyable ways in all honesty.

Reds4Life
02-21-2009, 01:23 PM
I don't think it's a bad time if you are young (25 or so) and can afford it. If you look at these as long term investments, say 20 years, some of the stocks right now are ridicilously cheap.

Dom Heffner
02-21-2009, 01:47 PM
I like annuities.

The only way I'd tell you to put money into stocks is if you don't care if you lose it.

oneupper
02-25-2009, 03:48 PM
I've owned shares of BAC for about 3 years. They're worth about half of what I paid for them. I picked BAC because Jim Cramer liked it. I had noticed it has a large number of customers where I live and charges some of the highest fees. I'm sitting tight with the BAC stock I have and not picking up any more.

Half? Wish it were so. I picked up some at 10 and change and some more at Six. 4.71 as we write. Ouch. BAC is down from the 50s.

If you like Fifth Third, you might think of picking up some 8.25% 2038 bonds trading around 75%. Will give you around 11% yield and if its in your IRA/401k, tax-free until you retire. $50 won't do it though.

kaldaniels
03-01-2009, 12:51 AM
Half? Wish it were so. I picked up some at 10 and change and some more at Six. 4.71 as we write. Ouch. BAC is down from the 50s.

If you like Fifth Third, you might think of picking up some 8.25% 2038 bonds trading around 75%. Will give you around 11% yield and if its in your IRA/401k, tax-free until you retire. $50 won't do it though.

Do you mind to elaborate on this. I am semi-literate on financial issues but when it comes to muni/corporate bonds I am a fool. How do you get these. What are the risks.

oneupper
03-01-2009, 10:02 PM
Do you mind to elaborate on this. I am semi-literate on financial issues but when it comes to muni/corporate bonds I am a fool. How do you get these. What are the risks.

No problem, at the risk of boring everyone else.

Bonds = Corporate Debt = Company IOU.

Most corporate bonds have a par or nominal value of $1000. They pay interest, usuallly semi-annually at the rate established. At the end of the term, they pay your principal back.

That is if everything goes fine and the company doesn't go broke. (I'll get back to that later).

In the case I put forth, Fifth Third Bancorp has several bonds outstanding, one of which is the 2038 one mentioned.

That Bond is trading at around 75% of par or $750 per Bond.
It carries a 8.25% coupon which means $82.5 of interest per year (or $41.25 each six months). Unlike a savings account, a bond pays interest on fixed dates.

In the case of Fifth Third, it is March 1 (it's TODAY) and Sep 1 of each year.

So you would invest $750 today and get $82.5 in interest every year until 2038. In 2038 you get the principal back, not $750 but $1000.

The risk? The risk is that the company goes broke or needs to restructure somehow. But even that isn't all that bad.
What normally will happen in those cases is that shareholders will be wiped out and your bonds will be swapped out for shares, in the new restructured (and more solvent) company.

Or the company may be forced to liquidate. In that case, bondholders must be paid before shareholders see a cent.

You may not get your $1000 back, but you usually get something. It varies case by case.

However, you'd be surprised how resilient some of theses companies are. I've bought some bonds of companies I expect to go into chapter 11 and they are STILL plodding along (and paying interest...yippee).

Why in your IRA? Well the bad thing about bonds is that the interest is taxed as ordinary income. If you're in a low bracket..not so bad. If you are in a higher one...not so good. Capital gains (which you usually get from stocks...sometimes) are taxed at a lower rate (for now).

You can stick a bond like the 2038 Fifth Third in your IRA and forget about it. The term...29 years is long enough and the yield is high enough to beat the average inflation expectation for the next few decades and nothing is taxed until you start making withdrawals.

It wouldn't be my first choice in bonds...but since you brought up 5/3..well.
But its not a terrible choice and I actually hold that bond (among others) in my IRA.

As for how to get these. You need to get them through a broker, but even a discount broker will sell them (I use E*Trade). It's not as easy as buying stock, but once you figure it out...it's not that difficult (my wife does it and she isn't very financially literate).

I have been loving bonds recently and my bond portfolio is up very nicely this year (with the market down as you all know). They are boring if you will, because you can't trade them very well (the bid/ask spreads will kill you). But you can buy 'em and forget 'em. Prices goes up, price goes down...doesn't matter if you're holding to maturity.

With stocks, even if you buy them on the cheap, you still need someone to buy them off you at a higher price. With bonds, all you really worry about is if the company will pay or not. And even if there is trouble, you usually come away with something.

I'm happy to clear up anything that may not have been well explained here.

kaldaniels
03-01-2009, 11:56 PM
Awesome Oneupper. Thank you. You went above and beyond, and made a whole lot of sense. :beerme:

It is something I will certainly look into!

Redhook
03-02-2009, 12:34 AM
Awesome Oneupper. Thank you. You went above and beyond, and made a whole lot of sense. :beerme:

It is something I will certainly look into!

No kidding. That was great oneupper. I think I learned more from you in the last 5 minutes than I did in my last year at Miami studying Finance.

BUTLER REDSFAN
05-07-2009, 04:14 PM
Of course I sat on my butt and did nothing..as of 3:14 today its now at $5.25...:(

oneupper
05-07-2009, 05:07 PM
It opened at $6.50 today. So at least you didn't throw in the towel and buy desperately.

As for the bond, its hovering around 60%. It's been a poor performer in a great bond market.

So much for what I know.

OTOH
BAC is over $13, so Unassisted and I are enjoying this very much.

It has been a SPECTACULAR rally.

reds1869
05-07-2009, 05:46 PM
I bought FITB at $1.76. I can't even begin to tell you how much I'm enjoying this rally.

freestyle55
05-07-2009, 06:30 PM
Or the company may be forced to liquidate. In that case, bondholders must be paid before shareholders see a cent.

You may not get your $1000 back, but you usually get something. It varies case by case.

Unless of course the government steps in and pays out unsecured shareholders a higher percentage than the secured bondholders (i.e. Chrysler)

Rojo
05-07-2009, 07:59 PM
I bought Ford at $1.45 and it's over $6. Nice. A few months it wasn't a bad idea to gamble on give-away stocks.

Despite this rally, I still don't think the market's in good shape for the long haul.

bucksfan2
05-08-2009, 09:25 AM
I bought Ford at $1.45 and it's over $6. Nice. A few months it wasn't a bad idea to gamble on give-away stocks.

Despite this rally, I still don't think the market's in good shape for the long haul.

I own some Bank Of America stock. Back in Feb I thought about buying couple hundred shares of BOA when it was trading at 4.00. I was talked out of it and now its at 13.51. That would be a nice return.

redsfandan
05-08-2009, 10:47 AM
I regret that I wasn't on the ball and didn't buy more of UYG (an etf tied into the financials sector) when it hit 1.37 two months ago but I like that it's tripled since then. I may still buy some more cuz, even though I expect some more rough patches, I think it could be a nice buy and hold for awhile since a year ago it was north of $30 and two years ago (before this mess started) was north of $70.

Rojo
05-13-2009, 04:06 PM
All this talk of floating shares to pay back TARP has me wondering what that will do to financials. My sucker-meter is twitching.

Redlegs23
08-02-2009, 12:10 PM
FITB looked like a good purchase a few months back. If only...

Ford was also a nice buy Rojo, good call. This one is making me kick myself, I thought real hard about it a few months ago.

Anyone have any others they're looking at right now? I think long-term there's some good bargains out there.

I picked up a couple this past week. I got in GXDX just before their earning announcement and I'm glad I did. Got a 15% pop. I'm hanging on to it for a while though, I think it can run into the 40's. Great balance sheet, sales growth, and aggressive marketing & advertising to increase market share are the reasons why. Obama potentially cutting medicare funding could potentially hurt the company a little.

I also threw a little money at MELA. Highly speculative and risky. The FDA is supposed to issue their appoval/disapproval of their melanoma detecting technology in December. So far the studies they have done look very promising.

Anyone have some good buys right now?