Thursday, January 24, 2008

Economic Stimulus Package

It's official, we are all getting a late Christmas present from Uncle Sam. The government is going to give us all $600 to kick start the economy. My question is, what's the consensus on this? Will this turn the economy around? Will it have a short term effect only to return to where it was a couple months ago? Or will it have no effect at all?

Secondly, what do you plan to do with your $600? Pay off bills? Take a vacation? Buy 600 lottery tickets in attempt to parlay the good fortune into larger earnings? Buy one share of Google stock?

I will more than likely just put mine in the bank or possibly invest in the stock market. My IRA has been making me sad recently though and I'm hesitant to throw good money after bad. But then again, there is a big Martin Luther King Jr. sale going down in the stock market right now, and I'd be foolish not to buy low. I just haven't been doing my research lately and have no idea what to buy. Any good stock tips, preferably with an explanation of why it's a good investment, will be taken under advisement.

My current strategy is to buy stocks that pay a good dividend, put them on automatic dividend reinvestment, and let the magic of compounding interest carry me to prosperity. The other part of the theory being that if a stock pays a 6% dividend, it doesn't really matter if it goes up in value, but if it does, you double your gains. Again, this is all theoretical at this point. It's worked with a couple stocks so far, but I haven't done it enough to have solid data. Still, the theory is sound.
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