Investment Risks: I Just Picked up BAC

In my discretionary brokerage account, I recently picked up a new holding that is definitely my riskiest play to date. If you’ve ever followed my thinkings on investing and income, I tend to be a “for the long haul” kinda guy. I don’t like making trades, I like making investments, and much of the time that includes eating some losses in the short term. I prefer to seek out solid dividend-paying stocks to build up a source of income, and I’m not entirely against taking risks, especially in my discretionary account where I can afford to lose the money.

Again, it’s important to reiterate that this isn’t my IRA or 401k, those are invested mostly in equities and in index funds. Bank of America, however, has been on my list well before the subprime mess broke and everything went nuts in the market. If you’re looking for insight into my investment analysis, I’d liken it mostly to dividends matter.

With the recent credit crisis, Bank of America has gotten crushed, I mean just absolutely slammed, going from 50ish dollars a share down to as low as 33 dollars. Given the BAC did get burned fairly badly by the whole subprime ordeal, but is also one of the largest banks in the country, I snapped up some shares while the getting is good.

With BAC’s recent acquisition of Countrywide and more write offs looming on the horizon, we are not out of the woods yet, and the stock could very well go even lower than current levels.

That, however, is a risk I’m willing to take.