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Post by kathiel on Dec 29, 2020 3:37:33 GMT
I'm surprised not to find any posts here.
I invest to augment my pension, so have chosen to invest for income. I am all in individual stocks, No bonds, no mutual funds, and my portfolio produces a yield of about 5%. While I hold "the usual suspects" like utilities and REITs, I have a special fondness for pharmas, and I have been searching out tech stocks that pay good dividends, such as IBM, STX, NTAP.
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Post by chang on Dec 29, 2020 3:40:18 GMT
This forum is only 9 days old! (And this board was added a few days late.) Thanks for kicking off the discussion on this board.
Whenever one of my mutual funds (in a taxable account) pays an ugly CG distribution, I think about people who only own individual stocks. From a tax standpoint, you couldn't do better.
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Post by rhythmmethod on Dec 29, 2020 3:45:06 GMT
kathiel , great to see you here. I’ve always enjoyed your posts. I look forward to an exchanges! Thanks for joining!
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Post by kathiel on Dec 29, 2020 18:54:20 GMT
Thanks for the warm welcome. I look forward to many discussions with you.
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Post by anitya on Dec 29, 2020 19:21:21 GMT
I'm surprised not to find any posts here. I invest to augment my pension, so have chosen to invest for income. I am all in individual stocks, No bonds, no mutual funds, and my portfolio produces a yield of about 5%. While I hold "the usual suspects" like utilities and REITs, I have a special fondness for pharmas, and I have been searching out tech stocks that pay good dividends, such as IBM, STX, NTAP. Good to see you Kathie. Seems like you have grasped the subtleties of equity investment better than a lot of us to grapple this subject well. To my gross mind, can you not gain 5% income from bondish investments rather than taking equity risk? By bondish, I mean HY, preferreds, even fixed income CEFs and may be go as far as equity utilities (monopolistic rents?) but not IBM, STX, NTAP, which seem to be in the realm of value equities. May be I am trying to grasp the subject by brute concepts but it would help if you can share your insights on the subject.
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Post by Deleted on Dec 29, 2020 21:39:17 GMT
I am 13 years away from retirement. When do you think I should start transitioning from growth oriented stocks to dividend oriented stocks like MMM, KO, VZ, PM etc. After I retire? Or should I start accumulating them on dips along the way?
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galeno
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Post by galeno on Dec 29, 2020 22:13:57 GMT
I'm a total return investor. So my answer is NO. But since the name of this board is "dividend investing" then you may want to consider SCHD. Or "slicing and dicing" the 100 stocks in SCHD to make your own dividend stock portfolio. I.e. pick the 30 with the highest dividend yield and do this every year??? I am 13 years away from retirement. When do you think I should start transitioning from growth oriented stocks to dividend oriented stocks like MMM, KO, VZ, PM etc. After I retire? Or should I start accumulating them on dips along the way?
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Post by helmut on Dec 29, 2020 22:25:27 GMT
I am 13 years away from retirement. When do you think I should start transitioning from growth oriented stocks to dividend oriented stocks like MMM, KO, VZ, PM etc. After I retire? Or should I start accumulating them on dips along the way? I know this is heresy to a dividend investor but I'm not sure there is an advantage to using dividends as your main focus. The link below shows me that from 2008 through 2020 the dividend stocks you mentioned would not do as well as the S&P 500. If you started on year 2009 the S&P 500 would have done significantly better. helmut LINK
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stats
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Post by stats on Dec 29, 2020 23:25:39 GMT
Like Kathie I have a pension and invest to supplement it. We only need a 3% yield on our portfolio to have enough. We generally aim a little higher than that. This year we ended up with a yield of 3.96%. The extra yield wold normally pay for a trip or other extravagance but in COVID days it just increases portfolio cash.
We try to keep our stock positions below 5% of portfolio. Currently, have more than 4% in APPL, MSFT, CLX, MCD, MMM, and SBUX. Thats after selling these same stocks earlier in the year. We sold a third each four of the above stocks earlier this year just to keep the individual stock positions under 5%
Waffle, we started slowly about three years before retiring running a shadow portfolio of twenty stocks. I funded the portfolio with fake money but ran the portfolio just like I expected I would do in retirement. I learned I had no idea, what cheap or expensive meant, that stocks are much more unpredictable than you think, but qenerally had a good experience. then a year before retiring started selling mutual funds once or twice a year to buy dividend stocks for real. Our portfolio of dividend stocks has lagged the S&P index a bit about 15% over the ten plus years we've been running it. It also has about half the volatility of the index. A trade off I am happy to make. During the last two market downturns we had no compulsion to sell but instead was always looking for new money to add to our portfolio.
We have plenty, we do not need a largish yield. If we needed more yield I might have made a different choice.
stats
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Post by Deleted on Dec 30, 2020 17:40:32 GMT
" Our portfolio of dividend stocks has lagged the S&P index a bit about 15% over the ten plus years we've been running it."
last 12 years have been all growth. So dividend stocks will lag.
I will start thinking of bonds, dividend stocks and AA funds as I get near (within 3 years) to my retirement.
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Post by helmut on Dec 30, 2020 21:55:05 GMT
" Our portfolio of dividend stocks has lagged the S&P index a bit about 15% over the ten plus years we've been running it." last 12 years have been all growth. So dividend stocks will lag. I will start thinking of bonds, dividend stocks and AA funds as I get near (within 3 years) to my retirement. waffle, After reading my last post I realized I did not state my thoughts very well. I do think dividends are an important fundamental but I don't agree that sacrificing total return just for the sake of an outsized dividend yield is prudent. Dividend growth is more important to me than the actual size of the yield. I've started looking at dividend growth as a more important factor than value. That being said many of the dividend growth ETFs I follow will fall into the value style. Getting back to your original post I believe growth or momentum is still an important feature and should not be abandon entirely in retirement. helmut
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Post by Chahta on Dec 30, 2020 22:26:38 GMT
I am 13 years away from retirement. When do you think I should start transitioning from growth oriented stocks to dividend oriented stocks like MMM, KO, VZ, PM etc. After I retire? Or should I start accumulating them on dips along the way? That is kind of like buying bonds 13 years away from retirement. 13 years is forever so I would keep growing as much as you can. 13 years is about the drop dead time for SS. You may need all you can get by that time.
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Post by chang on Dec 31, 2020 0:26:38 GMT
I am 13 years away from retirement. When do you think I should start transitioning from growth oriented stocks to dividend oriented stocks like MMM, KO, VZ, PM etc. After I retire? Or should I start accumulating them on dips along the way? I view the overall equity/bond allocation as something that should be examined and adjusted as we approach and enter retirement. But "growth vs. value" is a matter of macroeconomics and market dynamics. I don't see any connection with your age or other personal circumstances. You want to be in the right place at the right time no matter where you are in your investing journey. I have maneuvered around the "nine-box grid" over my lifetime, sometimes with success (and sometimes without). Right now LCG looks awfully frothy. As I am adding to foreign equity, I am reducing LC (LCG and LCB) to keep my equity allocation in check.
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stats
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Post by stats on Jan 1, 2021 0:29:10 GMT
Helmut, you make a very good point about chasing yield.
Our worst “investment” was when we bought Thurnburg Mortgage. Many were writing on M* forum that it was a safe 20% yield. I kept thinking of buying and finally after watching it pay two 5% quarterly dividends, I convinced myself it must be a safe dividend stock. Two dividends later they cut the dividend and soon thereafter went bankrupt. I had bought the stock through the company and asked for and received my shares. After the company went bankrupt, I framed my shares (very stylish purple picture of some buildings) and hung them on my study wall as a reminder to never chase yield again.
Stats
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Post by xray on Jan 4, 2021 18:39:56 GMT
Some of us use 10% dividends and 5% CapGains [15%/Yr for our Goals and Objectives each and every year] for many years now. This has been quite successful for both up/down correction markets. The problem for most investors is when to buy/sell and can be quite a challenge if not using excel worksheets and keeping up with one's investment.... The days of Buy and Hold are long gone and "trading" has moved to the forefront.... Suggest using 16 securities [as a minimum] and no more than 6% in any one investment as taught to us many years ago from our college professors. Dollar cost averaging "UP" should be utilized [especially after initial small investment after careful analysis]. Using "average buy price" [using average MktCostPrc in the excel worksheet] adds value in following dividend growth.... Excel sheets that are being used should include "Sell Codes" [signal for knowing when to sell], report card grades [0-100], and "Risk" factors for the safety of having a security in our portfolio's in the first place. As of last week, many of us have approximately 50% in cash waiting for investment [after taking substantial gains last year].... Closed end funds [CEF's] were very profitable last year and very similar in performance to 2017 [currently 70% of my current portfolio]. CEF's offer a NAV which can be analyzed to the current MktPrc and adds to our immediate evaluation for any buying activity. Sectors out of favor [like Oil and Health] should be studied and analyzed carefully as they are excellent long term sources of excellent dividends [with used with undervalued securities currently and investor panic].... One single opinion of the many I am sure....
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Deleted
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Post by Deleted on Jan 4, 2021 20:19:11 GMT
"The days of Buy and Hold are long gone and "trading" has moved to the forefront...." - I am realizing this now.
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Post by xray on Jan 4, 2021 21:38:53 GMT
To waffle:
Not too hard to understand the big-boys system after a few years trying to understand what they are doing. The problem is [remains] we don't have their resources to make their bigger paydays....
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Post by FD1000 on Jan 5, 2021 15:35:15 GMT
Most should use mutual funds but if you want to buy single stocks then 1) Higher distribution should not be your first goal/criteria. 2) Look at ALL stocks, why would you want to limit your search? Do you really want to miss on the best Tech companies since the 80"? If you know how to select great high distribution companies then you should know how to select great ones from ALL stocks 3) I don't see why retirement should change the above. Remember: you can always sell shares when you need to and selling shares isn't worse than depending on distributions. Example: which was better in the last 10 years MSFT or ATT? 4) Buying single stocks isn't easy. If you want to do both: use mainly index mutual funds and buy up to 5 single stocks. The first guarantee market return and the second may allow you to hit a home run. 5) Income at retirement can come also from bonds. OEFs bonds can be used as a ballast but also as higher risk/reward. CEFs can be used as part of your stock portion but with distribution > 8%. 6) The rest depends on style and goals. Investing is all about looking at all the tools and select more than one to meet your goals.
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Post by chang on Jan 6, 2021 2:42:54 GMT
4) Buying single stocks isn't easy. If you want to do both: use mainly index mutual funds and buy up to 5 single stocks. The first guarantee market return and the second may allow you to hit a home run. +1. For me, it's mainly for fun. Example: I always had my eye on McCormick. I figured that people would always buy salt and oregano no matter what. A few years ago it dropped to $59. I bought 100 (?) shares (cannot remember exactly), and stupidly ( stupid!, stupid!, stupid!) I never bought any more. I have 225.78 shares now. Is it a needle-mover for my portfolio? Of course not. But it's fun to own. One day I will sell it to fund a purchase, may a motorbike or something. Right now I own only MKC, RTX and JPM, and none of them are needle movers. Incidentally, I am in no way disparaging people whose portfolio consists in large part of major stock holdings. Kudos to them for eliminating CG distributions! I simply do not possess the skills to do that.
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Post by xray on Jan 6, 2021 19:17:09 GMT
The "BIG" money for us older type retired investor "analysts" is in "PENNY STOCKS" [$10] with dividends or distributions currently >10%. Mixed in with other securities in various sectors adds a boost to yearly performance. Out of sector investor favorability can be a great source for finding them and doing extensive research. Many of us follow a bunch of undervalued penny stocks [in our current portfolio's] and own more than the normal allowable shares [much more profit capability (# of shares being held) when we know what we are doing. The risk is much higher of course and is understood]. Today was a great day for penny stocks [penny stocks normally go down with higher markets and give us better entry points or better mktprc's for dollar cost averaging]] as "Zacks" just confirmed our previous analysis [on two of them] and we have bought additional shares to dollar cost average....
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Post by Chahta on Jan 7, 2021 16:54:23 GMT
Hey chang , have to share this single stock story. No names to protect the innocent. My mom is 91 this year. She has owned Target (was Dayton Hudson back then) for about 40 years. Her initial $6800 has grown to very high 6 figure amount. She reinvested divs for a long time but now wants the income. Years ago I told her she had too much in that one stock (her only stock) but she holds bond and equity funds too. I give such great advice. Maybe one day my sister, brother and I will split 4500 shares. This is the story dreams are made of. Just hold McCormick for another 30 years, young man.
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galeno
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Post by galeno on Jan 8, 2021 22:11:25 GMT
My advice to you as a young man. Be greedy. My advice to you as an old man. Don't be greedy.
I'm tempted all the time to take 5% of port (~10% of our equity allocation) and see if I can beat the only equity index fund we now own (FTSE all world equity index). FD1000 recommends 5 stocks. I agree.
But I've got a lot more fun things to do than watch the markets and get stressed out. At least before the "VID".
The beauty of low cost passive index investing is I only have to spend about 30 min per year on our investments. The only stress I have is the equivalent of "which toothpaste should I use?"
Lots more time to enjoy life and party.
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Post by chang on Jan 9, 2021 1:17:17 GMT
Sectors out of favor [like Oil and Health] should be studied and analyzed carefully as they are excellent long term sources of excellent dividends [with used with undervalued securities currently and investor panic].... I am still puzzled why Health Care is an "out of favor" sector. It's not like we haven't had a health care issue front-and-center for the last year. I overweighted it with a HC fund (actually two) about a year ago, and while they're sitting in profit, the growth has been far from explosive. What's holding HC back as a sector?
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Post by wannabechef on Jan 9, 2021 16:40:03 GMT
Sectors out of favor [like Oil and Health] should be studied and analyzed carefully as they are excellent long term sources of excellent dividends [with used with undervalued securities currently and investor panic].... I am still puzzled why Health Care is an "out of favor" sector. It's not like we haven't had a health care issue front-and-center for the last year. I overweighted it with a HC fund (actually two) about a year ago, and while they're sitting in profit, the growth has been far from explosive. What's holding HC back as a sector? I've been holding onto VHT (VG Healthcare ETF) since August 2017, which granted, hasn't done better that VTI (Total Stock Market) since that date. I share your confusion on why healthcare hasn't had a more robust upswing, especially mid/post covid. I don't have a large amount in it, ~ 1.3% total allocation. Seems like it would have been better to throw that money into tech or even a Russell 1000 Growth ETF. Oh well, hind sight is 20:20, I think decisions like this help me understand it's hard to time getting in/out at the right time. I can't complain too much I suppose, to date the return has been +15.71% since purchase. My best guess as to why it hasn't been performing lately is perhaps a looming thought that the government will step in and regulate the industry further, or even establish a US govt run form of healthcare. I'm not looking for opinions on whether this is a good or bad thing, I just sometimes wonder if that is effecting the sectors' ability to break out in the way tech and growth has. I should ask my neighbor, he works for J&J, she works for Merck, to see what the hold up is
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Post by xray on Jan 11, 2021 15:34:46 GMT
wannabechef Keep in mind that the market is "HOT" for other sectors of the market. The health sector is dependent on what the health stocks are really doing currently with the virus "solutions". Some of us had HQL and HQH in our portfolio's until we observed that they were stagnate in NAV [at that time we sold out for more favorable sector (OIL)]. HQL and HQH have improved some since we sold out. The normal trading range for both have been between 18-25 in "NAV's" since their big drop from favor many years ago [was >40]. They remain on our watch list since at one time they paid a 10% distribution [currently 8%] and my current analysis for both has a report card grade of 100 [hoping for a market correction to take advantage of this].... OIL has recovered a lot aa many of us [early return investors] are now profiting ....
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Post by steadyeddy on Jan 14, 2021 2:30:46 GMT
Sectors out of favor [like Oil and Health] should be studied and analyzed carefully as they are excellent long term sources of excellent dividends [with used with undervalued securities currently and investor panic].... I am still puzzled why Health Care is an "out of favor" sector. It's not like we haven't had a health care issue front-and-center for the last year. I overweighted it with a HC fund (actually two) about a year ago, and while they're sitting in profit, the growth has been far from explosive. What's holding HC back as a sector? A pandemic requires HC companies to work hard but not charge more (because it benefits the society and the gumments are not gonna pay a lot). Thus HC sector is not very profitable.
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Post by steadyeddy on Jan 14, 2021 2:34:21 GMT
Kathie - Welcome. I feel like we have sabatoged your thread. Sorry. Now, back to dividend investing.
I used to own T, MO, and others for years but never made any profit in terms of total return. While dividends were causing me to pay more taxes, the total returns were falling behind.
So I promised to myself - no more individual stocks.
I admire your steadfast commitment to divvy stocks!!!!
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Post by Deleted on Jan 14, 2021 5:31:51 GMT
JPM is the only dividend stock that I have. and it is 1% of my portfolio. May be I should add few?
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galeno
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Post by galeno on Jan 14, 2021 20:47:27 GMT
Do you prefer stocks that grow their dividends? Or stocks that have high dividends? If you prefer the first an easy short cut would be to use SCHD's 100 stocks and pick the first 5, 10, 15 etc that have the highest dividend yield. In the 1990s a lot of people liked using a system called "The Dogs of the DOW". Similar idea except you use SCHD instead of the Dow 30. JPM is the only dividend stock that I have. and it is 1% of my portfolio. May be I should add few?
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Post by yogibearbull on Jan 14, 2021 22:34:19 GMT
Do you prefer stocks that grow their dividends? Or stocks that have high dividends? If you prefer the first an easy short cut would be to use SCHD's 100 stocks and pick the first 5, 10, 15 etc that have the highest dividend yield. In the 1990s a lot of people liked using a system called "The Dogs of the DOW". Similar idea except you use SCHD instead of the Dow 30. JPM is the only dividend stock that I have. and it is 1% of my portfolio. May be I should add few? High current dividend is incompatible with high dividend growth. Some companies go out of the way to increase dividends, meaningful or not, just to hang on to Dividend Aristocrats label. A middle course with some current dividend and some dividend growth may be more desirable. I think that SCHD is more in the middle compared to some other dividend oriented ETFs.
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