bank

Why I Bought $2,000 Worth of Bank of America Stock

alrighty guys what is going up so

welcome back to another episode in

today's video we're gonna be talking

about why i just spent

over two thousand dollars on bank of

america stock so

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it roll that intro

let's go damn

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so yes i did buy 72 shares of bank of

america stock and

maybe it's because i am warren buffett

because he just picked up some shares

so this is really cool to see because it

gives you a lot of confidence behind

your investment

the reason why is his average return is

17

and that's outperforming all the indexes

the dow jones the nasdaq

and the s p 500 so that is really cool

gives me a lot of the confidence as a

bank of america investor for the future

so from my 2 000 investment i'm going to

be getting around 51

per year in passive income baby so i'm

not gonna have to lift a finger

for this money and i know a lot of

people right now probably are saying

well carter why would you only invest 2

000 and get 51

that's not a lot well here's the thing

guys i'm starting that snowball effect

so maybe

this year i'm only getting 51 but maybe

the next year it's 75

then 100 then 200 then 300 starting that

snowball effect with my dividends

also known as compound interest and yes

with all my dividends i'm going to be

using drip which is the dividend

reinvestment plan so i can start it

because it's the best way to do it on

average when you guys are signed up with

drip you make around three to four

percent

more per year look at this graph look at

this this is why

you you reinvest all your dividends

right here look at that but bank of

america does have a ton of long-term

potential

look at the price to earnings right now

the price to earnings is right around

13.8

that is very undervalued me personally i

like to find stocks that are trading

under 25.

the reason why is because the price of

earnings is really a gauge to find if

stocks are trading overvalued

undervalued

and how much you're paying for your

earnings and right now with it being

right around 14

that is very undervalued if you look at

a company like tesla tesla's price to

earnings is like

800 but that is a growth stock so yes it

is a little different but as a value

investor like myself this

is really cool to find a company that

has a ton of long-term potential

just off the price to earnings so yes

you guys know that they do pay a

dividend

but did you know this over the past

three years they've grown their dividend

164 percent so this is crazy because we

hope as investors

that the history repeats itself so like

i said

that 51 dollars could easily turn into

60.75 and 80

and yes the revenue is very very good

they made around 75 billion dollars last

year so that's really strong to see

with the profit margin right at around

25

strong numbers strong fundamentals

really no

bad things in sight they have a ton of

cash over 800

billion dollars in cash so if this

company slows down at all

they can use some of that cash to grow

the business

or to even pay investors which is really

cool any now you might be saying well

carter

what is their what is their payout ratio

the payout ratio is only 25

which is really cool payout ratio is

just a ratio of determining

how much money the company actually pays

out to dividend investors so if a

company pays out a hundred percent

on their payout ratio they have no money

left over to grow the business but bank

of america still has 75 percent of their

money

that they can use to grow the business

which is great

now the only thing that is down a little

bit is their quarterly income growth

it's down around five percent but i

think

since this whole kind of recession we're

in everything's kind of being weird

i do think that this company will turn

around in the next couple of months

so now that we got a good understanding

of some of the fundamentals now let's

move to the technicals so this is going

to be like support

resistance where i see it in the future

my price prediction so i hope you guys

enjoy it

already guys swift ticker symbol bac

this is bank of america's ticker

now looking at the chart you guys can

see that there is some clear resistance

here at around 32

some more resistance here at 35 which is

that all-time high

and some more support here down at

around 22 dollars

so now that we marked out that

resistance the strong support

now this huge crash was pretty much just

a march recession you guys can see

it crashed from that 35 point all the

way down to 17

a share looking at it and the rsi that

was a very

undervalued territory for this stock and

maybe a little overvalued here at around

35 that's why we got that little bit of

temporary sell-off

it was gonna rebound hit that old

resistance and pretty much

sold off big time now looking at the

chart here you guys can

clearly see that there is some very

strong resistance here at 28.

it hit that resistance and sold off here

now

the thing about this is we are still on

a short term

upward trend which is really strong

really positive

now i personally think that we're going

to have a little more

little more fall here at around 27

before we get another bounce the 27 mark

is going to be this 90 moving average

line

you guys can see that in the past it's

used it as support right in here

here here little here here so it uses it

a lot as support

so i do think that's going to be a very

very strong buy point to buy

but if you're like me a perfect strategy

for this one is dollar cost averaging

that's what i'm doing

i put two thousand dollars up front but

i'm going to continue to invest

weekly into this company here i think

that there is a ton of potential for it

and if it falls down here i'll probably

spend another two to three thousand

dollars averaging my price

right at around 27 and a half but even

for this fall guys that's only a dollar

fall so this stock really does not move

too much

and i do think that by mid to late next

year the stock will be probably trading

somewhere around 32 to about 34

a share that's my price target is at 34.

i do think a perfect buy zone if you

guys are going to do your one

lump sum investment would be right

around 26 to 27

a share always set an alert here at 25

because it could possibly happen you

know but i think that since it broke

over this 200 moving average line

it's all up upwards baby so everything

looks really strong for this company

here

so now you might be saying well carter

you are just like warren buffett and

that is what i like to hear my friend

and we'll see you guys tomorrow don't

forget to go ahead and check out my

course

remember to stay happy stay positive and

stay safe out there

stay safe please for me all right take

care guys have a good one

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