(08-24-2014, 10:45 AM)Robandcindy2 Wrote: What had me in this train of thought was seeing some "red" I didn't expect to see in our portfolio.
Some red in the short term should not cause too much worry -- all it means is that you can buy a little more and average down your cost per share. Accumulating shares in a good company at a good price can take a nice long time.
For example, I bought my first shares of TGT when it was at about $71, and even though it has fallen a lot since then -- in the "red" for me -- I've continued to buy. I've gotten shares for as low as $57.30, and my average share price is now around $62. If it hangs out below $60 (still in the red for me), I'll keep adding opportunistically. It may take a few years before the company rights itself, but it will, and when the stock eventually climbs back into the $70s and $80s, I'll be happy that I did. Am I sure it will work out this way? Nope. But I am confident.
It was the same story with JNJ a few years back. All the talk was about recalls and lawsuits and how JNJ was finished. Meanwhile, I piled up shares at an average price of just over $60. They eventually righted the ship, and now shares are over $100. The short-term "red" period was an opportunity, not an indication that I had made a mistake.
MCD is another name that might fit this bill these days.