Everyone in my position was informed that we will all be getting a raise effective January 1, 2008! Nice surprise!!
For privacy reasons, I haven’t provided much detail on my position and what I do. I will say that I am in middle management for a private company. To remain competitive, the company believes in providing their employees with excellent benefits and pay. From what I understand, they recently did a survey of what similar companies pay those in my position. Since we were being under paid relative to the competition, the company gave us all a raise! Yeah, they want to keep us that bad.
With the extra money coming in next year, there are some implications to my retirement plan. Instead of hitting the next tax bracket in 2010, I’ll actually reach it a whole year earlier in 2009. This makes it even more important for me to max out my Roth IRA. But now I wonder if the savings are all that significant in the next two years… because a part of me doubts that I will reach the next tax bracket after 2009. Wait and see I guess.
All the extra income will go into building my Investment Portfolio. As some of you may know, my portfolio is not well diversified with investments in just two companies. I hope to change this over the next 12 months, with a focus on about 8 to 10 companies in various sectors. Extra money means extra savings!
In the last week and a half, the stock market has been disturbingly volatile. On Monday morning, all the stocks in my watch list had positive gains through the early afternoon. But, by day’s end, each stock had completely turned around and showed losses for the day… whoa! Literally, my screen went from green to red in a matter of hours.
For a moment, I did freak out. Thoughts of another Great Depression or Dot Com Bust entered my mind. My fears were further fueled by other PF bloggers that expressed similar feelings about the market. Dahhhh!
Fortunately, my concerns subsided by reminding myself that I am investing for the long term… and not to make a quick buck. With all the media surrounding poor market performance recently, several stocks look like a bargain right now. And, over time, I believe the value of many good companies who are trading at a bargain will increase substantially.
So, with some self reassurance, I invested more money yesterday!
I bought several shares of American International Group (AIG) at $63 per share. I think this was a bargain! AIG is an insurance company (Warren Buffet style) with operations throughout the world. They were recently approved to launch plans in China… which should help the company’s growth. If no hurricanes or major catastrophes occur this year, AIG should do well in the next 12 months. Otherwise, I think this is a solid pick for the next 3 to 5 years.
My portfolio is now composed of 50% Walgreens (WAG) and 50% AIG. Walgreens was having a great run last week, but has since dropped a few points this week. It sucks, but I still think this was a solid buy for me. Also, I am still in the process of slowly, but surely, diversifying my portfolio. I anticipate another purchase at the end of this month.
Remember, long haul! haha.