Retirement Strategy: Buying The Dips Worked Once Again

Includes: CVX, GE, JNJ, KO, MCD, PG, T, XOM
by: Regarded Solutions

In our fast moving world, even stock market corrections are quick to occur and quick to vanish. Just the other day I wrote this article suggesting that investors look at an array of stocks to either add to existing positions, or to open new position in.

I felt that this would be an appropriate opportunity to take a quick look, and see what would have occurred if any investor actually took this action.

Let's call this NEW portfolio: Buy The Dips Portfolio, or BTDP!

Using The Simple Metrics Offered, How Did We Do?

Using the "KISS" method and to keep it completely easy to follow, the list of stocks are short and consist of ONLY the best of the best.

The BTDP consists of just these stocks: AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), General Electric (NYSE:GE), McDonald's (NYSE:MCD), and Chevron (NYSE:CVX).

We will not be adding stocks, we will not be selling stocks, we will simply follow this new portfolio from the point we suggested buying the dips, to current pricing. My intention is to update this little portfolio on a monthly basis to see how we have done.

It should be fun and interesting to follow along!

2/3/2014 STOCK YIELD FWD P/E 2/7/2014 +/-
31.95 T 5.50% 12.48 32.31 1.20%
90.05 XOM 2.80% 11.56 90.58 0.50%
86.78 JNJ 3.10% 13.82 90.04 3.75%
37.21 KO 3.00% 16.76 37.95 1.80%
75.71 PG 3.10% 16.31 77.31 2.10%
24.35 GE 3.60% 13.38 25.19 3.90%
93.02 MCD 3.50% 14.67 95.92 2.35%
111.14 CVX 3.60% 9.67 112.05


Obviously we began this little portfolio on 2/3/2014, and the forward yield was based on that date. Going forward, it will not be necessary to include that column. At the same time, I have left any investment amount off of the chart because everyone does not buy the same amount of shares.

The dividend yield is based on the original purchase price, and can be followed along based on the amount of shares you might have purchased. That will not be changed into a yield on cost (yoc) figure going forward, but as you can see, the current yoc is already higher given the higher share prices.

I would like to point out that every stock is now up nicely in just a 5 day period. This hopefully illuminates the "buy the dip" philosophy that I myself employ, on those mega cap, blue chip, dividend champion stocks.

The Key Takeaways For Our New Journey

  • Using simple and uncomplicated metrics can work when making a buying decision.
  • A newcomer deciding to begin a brand new portfolio of dividend income producing blue chip stocks can profit from buying the dips.
  • Adding to existing positions on these dips can increase an investor's overall income, which is what a dividend growth investor focuses on.
  • Sticking with the biggest blue chip mega cap dividend paying stocks pays on in the long run for a more secure financial future.

The Bottom Line

Keeping this simple will allow my current followers and new readers to begin to see how this strategy unfolds. Nothing is ever perfect, and there are never any risk free guarantees.

Let's have some fun, make some money, and follow this new portfolio!

Disclaimer: The opinions of the author are not recommendations to either buy or sell any security. Please remember to do your own research prior to making any investment decisions.

Disclosure: I am long CVX, GE, JNJ, KO, MCD, T, XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.