Dividend Stock Investing

[The Virginian]

Hey - Take a look at this REIT - (GOV)

It is a REIT that currently yields 12.65 % !

It leases property to Federal, State and Local governments, Stable Income, Reliable tenants ( Even if they are using your tax dollars to pay)

This one is a no-brainer to me.

Move up to the nice hotel all those government employees get to party at aj !

(Note - I do not currently own this one but plan on adding it in the near future)

www.govreit.com/home/default.aspx

[The Virginian]

Home Depot raises Dividend a Whopping 16.9% !

from .59  cents per share quarterly to .69 cents per share.

I don't own this one but wish I did - Think about it - When was the last time you got a 16.9% raise in your income ? This is an incredible amount. Congrats to all that have Home Depot in their portfolios

[The Virginian]

Added a little more PSEC today.

[The Virginian]

I think today was a positive day - Oil held and the indexes went from triple digit negative to double digit positive. Maybe things will settle down for a while - at least we can hope.

[ModE98]

Looks to me we need to surpass 16611.58 on the Dow to break into positive territory again.  Tomorrow and Friday, if they can be bullish, will get us going.  Today's action may be the catalyst for a modest bull run (HOPEFULLY).   With oil and world affairs, plus our political dilemna  being as they sre, do not see anything to set the market strongly in a recovery mode headed toward the 18000+ level.  (jmo).

stockcharts.com/h-sc/ui                                                  

[The Virginian]

Mod,  we are still a long way from the 18,300 high for the DOW  but at least we are headed in the right direction for now. I will be happy if we can tread water through the Spring & Summer. Overall I have been happy with the performance of my portfolio. This is especially true with all the Oil, Gas and Coal related stocks I have. Despite a few dividend cuts (COP & KMI were the biggest) my income continues to grow. It it ever does break loose I think my portfolio will skyrocket up ( At least this is my hope)

I don't know for sure but I think this stagnant range of stocks is actually helping in the accumulation of more shares. 

[ModE98]

Sold my HRZN this morning on the nice price jump, equal to 3+ dividends in next 9 mo.  Will certainly buy back on a -0.40 price dip,  which would probably occur in the next market correction.

[klewcm]

Has anyone discussed Morningstar's Josh Peters dividend investment style and selections on this board?
I'm interested in opinions / comments regarding selections, performance and the newsletter, particularly any long term issues encountered before I subscribe and commit to the methodology etc.  Thanks in advance.

[The Virginian]

Mar 1, 2016 14:47:00 GMT -5 klewcm said:

Has anyone discussed Morningstar's Josh Peters dividend investment style and selections on this board?
I'm interested in opinions / comments regarding selections, performance and the newsletter, particularly any long term issues encountered before I subscribe and commit to the methodology etc.  Thanks in advance.

I'm not familiar with Josh Peter's but personally I think you could do just as well selecting your own stocks. In the Long Term Investor wxyz has an excellent "model Portfolio" that is proven. For building a quality portfolio just pick Large Cap Solid companies that pay dividends and produce goods and services you use or everyone you know uses. Examples would be :

PG
XOM
T
VZ
CLX
PEP
KO
PFE
BMY
JNJ
GE
INTC
PM
MO
DUK
ED
AWK
SO
CVX

.................... I prefer to pick my own, and purchase individual stocks. Remember - It's time in the market that produces results. To set a price target I look at the 52 week Low/High - Divide by two and that average gives me the Fair value target price. Not perfect but it works well most of the time.

Another way to build a portfolio is to just find a good ETF you like maybe like SCHD - Take the top stocks and make that your portfolio to build on.

Or Just buy the S&P 500 ETF or something like the SCHB - Broad market ETF

Everyone has their own preferences and most are not bad but I never just follow someone else , especially if they are charging me money

Good Luck !


 

[Ombud]

Ford issued a special dividend. .. not complaining but unexpected. So even though F is technically a loss from where I bought in 12/2015, I'm even counting the dividend. Not bad

[The Virginian]

For those that might be interested these two quality stocks are below their 200 day moving averages :

DUK - Duke Power

BMY - Bristol Myers


Makes it an excellent time to add positions

[The Virginian]

I'm thinking of selling KHC - Any thoughts ?

[ModE98]

Sold some OPK and picked up shares of DX, FSFR and HCAP for high dividend income today.  If I survive for much longer, dividends will help pay assisted living cost.  I am compiling my shopping list.

[Ombud]

Live long & prosper, ModE98

Figure this is as good as anywhere to ask ~~~

Went to one of those talks last night, no I dn buy the annuity. Buy he got me to thinking. In 6 yrs I will be at RMD age. I like everything the IRA is in. Would it be a good idea to stop reinvesting all dividends to get some cash for RMD? I don't want to sell in a dip

[Deleted]

Mar 8, 2016 11:37:38 GMT -5 Ombud said:

Live long & prosper, ModE98

Figure this is as good as anywhere to ask ~~~

Went to one of those talks last night, no I dn buy the annuity. Buy he got me to thinking. In 6 yrs I will be at RMD age. I like everything the IRA is in. Would it be a good idea to stop reinvesting all dividends to get some cash for RMD? I don't want to sell in a dip

Ombud

This is a Highly complicated question for a several reasons:

{1} You need to know which Table (1, 2 or 3) within IRS Publication 590-B Appendix B you will need to use to be able to figure the Worksheet in Appendix A of the same IRS Publication.

{2} The amount of the RMD required as per the worksheet from IRS Publication 590-B Appendix A.

{3} The year Total Amount of all Dividends currently.

Figuring out the Amount stipulated (current) by the information gathered via #1 & #2 above; will let you know if the amount in #3 is enough to cover the RMD (Current).

The reason for figuring the above (current; as though now was the time for RMD's); is so that you can do some Extrapolation & estimation forward 5 years.

The reason for 5 years; is that the RMD is figured off of the Value of the IRA as of Dec 31st of the year prior to your reaching the RMD age (Worksheet Appendix A IRS Publication 590-B).

The reason for doing the forward extrapolation; is to determine:

{A} The estimated yearly increase of the amount of Dividends (estimated using 2% rule of thumb; Yearly Dividend amount for each individual equity x 2% = ? + Current Yearly Dividend Amount for the individual Equity);

{B} The estimated increase in value of the IRA over the next 5 years based on {1} Increases to both Positional Size due to D.R.I.P.ed dividends & {2} Dividend Amounts Based on the increased Positional Size as a result of the D.R.I.P.s.

This Extrapolation will give you an idea as to whether or not, the Dividend Amounts would Cover the RMD at the POINT You actually required to take them; if you waited until the last possible moment to stop D.R.I.P.ing (November of the year prior to requirement of RMD).

The knowledge directly above would be gleaned from the extrapolations detailed & Estimations of future IRA value at the 5 year forward mark as PER The Extrapolations and as Adjusted by Variations to account for Market Movements {Worst Case Scenarios & Best Case Scenarios; defined as Estimated Value from extrapolations adjusted by -50%, -25%, +25%, +50%, +100%).

The reason for the Adjustment Scenarios as detailed above; is because variations in Value will ultimately change the RMD and in the 5th year out from here that could be substantial; a somewhat bad year; a really bad year, a rather good year, a stellar year or a highly beneficial unforeseen event could substantially change the account value.

Now here are some thoughts to all of the above:

{1} Many might say all of this is pure overkill, more headache than help.

Maybe; Maybe not. Realistically, if one doesn't have a fairly good idea of what could be the case, then they are working half blind.

{2} Some might say that it isn't worth the time.

But; what if stopping D.R.I.P.s now actually hurts the future valuations? One could really be shortchanging themselves. Or conversely what if in fact stopping the D.R.I.P.s is the best thing?

In an Era where Cash holdings are gathering no interest (or minimal), compounding interest can't be used to short step future estimations of both value, income & lifestyle afforded.

& my challenge to anyone reading this:

You have spent your life working diligently towards this point; why slow down or stop at this point planning, estimating and gathering towards the reward; when doing so could put you over a barrel?

A truly successful person always plans for both the best and the worst & seeks to hit a mark somewhere in the middle.

If you think 10 steps ahead; you will never be 2 steps behind.

[The Virginian]

Ombud, I'm certainly no expert but my own personal plan is this - I will take the RMDs and immediately deposit them into my taxable account where I will invest the money back into dividend paying stocks. My plan is to never use the principle funds I have accumulated. If you don't want to pay taxes your RMDs can be placed in Muni funds that are tax free.

As for annuities -  They give you guaranteed income for a specified period but it is always lower than you could earn yourself - not to mention you lose the capital, pay an 8% commission and will not have the advantage of compounding. You can do much better on your own and you still keep the capital amount. ( Which in my case will be in a trust to dole out to my children for the rest of their lives) Annuities are great for the Investment challenged people that don't have a clue but not for the Investor types (IMO)

[The Virginian]

Sold : KHC and Purchased - CVRR for IRA

[The Virginian]

GIS ( General Mills)

Announces Dividend Increase

From .44 per share per Qtr to .46 per share per Qtr
            
or
            
$1.84 per share per year

[Ombud]

The Virginian, I was shocked that the vast majority of the room bought. Not me. My dad had 2 sayings:

1. When that dollar bill kisses you back, then you're a richer man than me
2. No one is as interested in seeing your investments grow as you (are)

I like the way you think. It really doesn't matter if I divest of an investment in the IRA if I reinvest in it in my brokerage account! That makes 3 things that the 'salesman' was wrong about:
1. How RMD's are taken
2. The new SSA rules
3. Market overall

[The Virginian]

My mother had annuities -  and in her case it was probably the best. She came from the great depression Era and didn't trust or know a thing about the stock market. The sad thing is she could have been so much better off had she even had the knowledge to put the money into an Index Fund.

I had no financial education from my parents, everything I've learned has been self taught and from the "college of hard knocks" something I hope to correct with my own children. Right now they are still young enough that they don't pay me much attention but I hope as they get a little older they will pay enough attention for me to pass only my limited but growing knowledge. I'm afraid of what the future might hold for them.

[Deleted]

The Virginian

Funny isn't that a couple of generations fought to gain access to both Tools (Financial Instruments) & Detailed information; which for years had been both the realm of the Uber Elite & kept highly secretive;

And won access to those things and more:

Only to see generations which have come after them, pretty much turn their back on those very things?

Before the 90's, general folks like us couldn't trade Options, before the mid 2000's trying to find information on much of anything was near impossible (and most of the time when you did find it; it was incorrect).

Before the late 80's trying to get a half straight answer out of a Broker was like trying to find Bigfoot.

Now, there is a wealth of access; but newer generations don't much care. They would rather take the word of some TV "guru", flee to and fro and then buy & sell ETFs without much mind to what is actually going on...

[The Virginian]

That's right DI - There is a tendency to cling to the "Old Ways" of doing things. On another forum there are those that still think one cannot manage a large portfolio of stocks because you cannot possibly keep track of all those investments. So some will say no more than maybe a dozen stocks should be held in your portfolio.

While this may have been true in the past a revolution has taken place in recent years. I am able to by-pass brokers altogether and place my own buy and sell orders with the mere click of a button.
I can receive multiple "alerts" from many aspects of my stocks from my online account broker or from many forums including Seeking Alpha, Yahoo, Google Finance and many more. I can be alerted on many things for each stock like breaking news, price changes, Dividend news and much more. ( I don't know how old you are - but it wasn't that long ago you had to wait for the daily newspaper to be published just to find out what price your stock closed at from the previous day!)

Things have changed and now I track well over 50 stocks will little effort. I plan on having over 100 stocks in my portfolio soon and don't see any problems with that many at all. Who knows ? Someday I may have the whole S&P 500 in my portfolio !

[The Virginian]

Ombud - I just wanted to comment more on the RMDs - As you may remember from another thread ( don't know if you read or not)  I am going to be moving to Georgia within the coming year. As part of the move I own a rental property outside of DC in Northern Virginia. My initial thought was to sell the rental property, take the cash, and buy a new home with no mortgage. After some thought I came to my senses. I intend to take out a mortgage on the new property. While I could pay cash - why?

Here's my thinking - Current Mortgage rates are below 4%. I am confident that I can earn at least an 8% return by investing the money. That alone is enough to keep the money. Once I give that money away it's gone forever and there is no way I can use it again unless I take out a home equity loan and pay someone else to borrow my own money. It just does not make sense. Also, I reasoned if I have the money and something does go wrong I always have the money there if I were to ever need it. The money in the investment will continue to grow and compound. By taking out the mortgage I also get a tax advantage to offset any moneys earned from the investment.

It has taken me a while in life,  but I now realize you should never give up any of your principle money if you can avoid it. Keep the money and use the Dividends if you need them but don't give up the principle - protect it at all costs. 

[Ombud]

Congrats on impending move, The Virginian. I keep my home separate from all investments (homeless both at 5 & 16 so it taints my perspective) but I'm not adverse to 'good' debt ... education, property, and to a lesser extent investments.

@di, I'm one who invests in ETFs as a basis but fully understand that that portion is striving towards mediocrity. That's where individual stocks & options come in. More so when not in crunch season (oddly did better there than working per hour last year, tracked it) which is why I'm now trading the Roth bc I dn want 2016 tax return to balloon out

Not selling anything in the brokerage #1 bc I like it all.

[Deleted]

Ombud

Allow me to clarify; I was speaking towards what the younger generations are doing.

You & many others around here are in the generation; which fought for more access & transparency.

You (and many others here) also know the art of the Duck & Dodge. This comes from the wealth of information gained from the fight for access & years of knowledge gained from splitting every penny to make the most of less.

Trading in an IRA makes a lot of sense; in that nothing is taxable until, well RMDs turn it into Cold Hard Cash.

Doing this also, helps to further the IRA beyond the pathetic amount one is allowed to "contribute" each year (seriously it is a savings based retirement vehicle; meant to help one build a nest egg: But, yet you can only put in so much a year? If it weren't for the Tradability within one IRA's would seems ludicrous).

For you from what I gather; ETF's are a way to monitor a wide basket of things; which then you use in a fashion to help you gauge where to go with individual things; in another place or places.

And you do this (from what I see knowing that ETF's barely meet longer term a definition which your generation and the early part of mine would call beneficial.

The same can not be said of the later half of my generation; or from what I see generations which have come after mine.

I was born early enough in the 70's; so that I was both able and aware enough to hear the arguments & b**tching over "F*** OPEC", "R***ded FED", "C*****ing lying Brokers" and much, much more..

As such I appreciate the gravity of things in a more finite detail and seek to look much deeper; than folks born in the latter half of my generation by and large. And that is not to say that there aren't younger folks who seek to push as deep as I do; just that there are far, far fewer of them than there should be.

So I wasn't lobbing a slight at you; but more or less lamenting the downward slide of inquisitiveness, enlightenment and independence of the majority of those who are coming into the markets now a days.

[Ombud]

Oh yeah, I get that. DS only does stock & not in the company he works for outside of the match (1979) / GS1 thinks he just needs FB & SPY (1996).

Index ETFs are a strive to mediocrity. That'll be my mantra when we discuss it next

Even in a sideways market, there's money to be made. You just have to like putting together puzzles IMHO

[Deleted]

Ombud

Or to put it another way, much more bluntly:

You need to look for the stupidity wherein it lives.. Those very things which make you seriously go WTF!!!

Like for example (again) BAC... Seriously WTF?!?!? 5 quarters of earnings beats, 5 times in which they beat the PRIOR years earnings {while they were beating the current earnings}, trading at a 41.87% DISCOUNT TO BOOK VALUE, trading at a 76.96% DISCOUNT TO CASH held in a bank somewhere; &, &, &,,,,

Seriously there is a WTF?!?!?!?! is wrong with this action, given what one can see if they look AND the fact the economy is Actually rolling right the F***k along.....

Well, if some want to be lazy and listen to some guy who is actually holding a huge amount of it and looking to buy more; telling them that it is Worthless Garbage, then that is there problem..

BUT watch, those same folks will bitch that "If I only would have"; after BAC finally starts to act its worth....

Of course BAC is a VALUE play; which is not what folks think is worth anything. Because, Value plays don't act like f***ing ATM's...

Remember what Forrest Gump said? "Stupid is as stupid does".

[Ombud]

Which is why I picked up more

[nlt]

Any words of wisdom for someone who is ready to jump into stocks more?  We have retirmement plans funded, invest in mutual funds in taxable accts and have an adequate emergency fund.  Currently hold small positions in X and MUR and I just feel like stocks are "on sale" now, more so than they have ever been in my adult life.  I want to invest in solid American company(ies) for long term investment potential.  I guess I'm just throwing this out there for places to do research etc.  to start looking.  Thanks in advance, I'm a loooong time lurker on YM and WIR back to the MSN money days!

[Jaguar]

Welcome to YMAM, nlt.