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  • Why Dividend Growth Is More Important Than Yield (Don't Be A Yield Vigilante) [View article]
    The author Doug Carey does an excellent job comparing high yield with little to no growth versus the lower yield/high DGR stock. He repeated the article 3 or 4 times now with various stocks, but is an excellent tutorial on why you need to at least start with a 1.25-1.50x yield greater than the S&P 500 because as good as a company like FAST or CHRW may be and the DGR has been outstanding on those two examples, it's takes way too long to get a yield of substance. Skyler, if you use the example of T vs WMT, you would get a very different view of which stock you would choose.
    Jul 19 10:22 PM | 3 Likes Like |Link to Comment
  • Why You Should Save For Your Kids' Retirement: The Power Of Time [View article]
    Gee whiz, Skyler - you really meant it that I should write articles instead of giving you all the ideas.

    The answer sat, is yes, you can "employ" your children. My kids are soon to be 4 and 7. I have a flyer that promotes my business and has both of them in the flyer. They were paid as "models." Both were paid $395. No tax problems because under $400 for children and you don't even need to file any tax returns.

    Only one dividend paying stock is in their Roth right now: INTC. Next year $395 more. We'll see what DRIPping these stocks does in 45-50 years.

    Jul 17 02:44 PM | 3 Likes Like |Link to Comment
  • Building A Portfolio, One Wish-List Stock At A Time [View article]
    I'll try and answer this for the author and I will call it the Chowder Law because he is the one that beat this into everyone else on this segment of SA:

    The purpose of the DGI philosophy is to protect the income stream. The more companies one has, the less risk you are placing on any one sinking your man-made, inflation beating annuity. To accommodate for this being your primary goal, you must let the volatility of the market change your portfolio value/net worth every day. You can't have both and I am guessing the author is not focusing on total return in the truest of defintions.

    My .02 reinvested.

    Jul 16 06:41 PM | 11 Likes Like |Link to Comment
  • Do Dividend Stocks Pose Hidden Risks With The Fiscal Cliff Looming? [View article]

    Nice article. I am right on the cusp of being in the "5%" as Skyler and I have had talks offline and could probably tell my family does pretty well. What can I do about it? No more Roths for me, no more IRA contributions, but my wife has a 401K which we do just to the match. I don't trust tax rates moving forward leaving me almost 50/50 taxable/tax-deferred(f... Not a heck of a lot I can do and frankly, I leave it up to my accountant to tell me how much I owe or how much to withhold each pay period. Not bragging, just fact.

    But I never worried about the tax rate because of something Fish said a long time ago on one of these threads:

    With dividends, you are paying the taxes bit by bit over time, but with a 401K/IRA distribution, you are getting wallopped all at one time.

    I know there is no way to really analyze it, but I wonder what the taxes paid over holding a stock 20 years (say KO) for its dividend would have been versus in a IRA and distributing at the 20th year? DRIPping both, my hunch tells me one would end up really close to paying the same amount in taxes at the end. Too many variables, I know, but the results would be intriguing of paying the tax man now at a known rate versus the tax man later at the who-the-heck-knows rate?
    Jul 13 02:19 PM | 3 Likes Like |Link to Comment
  • Hidden Cost Of Mutual Funds: Why Dividend Growth Investors Should Go It Alone [View article]
    Or, if you really want to be like Chowder and follow 48-50 stocks, you can do I used to use it when it was called and doing a bunch of moving of stocks. Back in the good ole days, it was $199/year in the two trading windows each day. Now it's $290/year. So yes, you can DCA 48 stocks every month for one fee.

    Jul 10 04:43 PM | 4 Likes Like |Link to Comment
  • Dividend Growth Portfolio: 2012 Mid-Year Update [View article]

    If you are retired, I would figure you would call yourself Mauisenior, but I digress. If you have read his articles, DVK is retired. Hence, I don't think he would do anything differently.


    I know DVK mentioned earlier in the thread about not wanting to go down this YOC tirade, so I will try and sum it up in a few paragraphs.

    YOC, or on my own spreadsheets I call it Yield on Personal Money Invested (PMI), is not a fair assessment of how your portfolio did over time. It's only how your PMI has done over time without regards to actual stock price or total return.

    Real life example: I have stock in Praxair (PX). My PMI yield is about 5.5%. The real yield, what anyone can buy it in the market for today, is 2%. What does this mean? I have had a REALLY nice capital gain. But if I am trying to maximize (long term, growing, stable) income, does it make sense for me to hold on to something that currently yields me only 2%? No. I should sell, pay my LTCG tax and reinvest into something with a higher yield, like BBL or DRI, and nearly double my income. I have too much cash sitting right now that I'll keep my Richjoy special of nice DGI and Total return and hold PX. But if I need more cash, it's on my short list of sellers.

    So why is PMI yield on my spreadsheet? Because I have two goals. First, the dividends only cover not only my expenses moving forward, but advance more than inflation, which I believe is a near universal tenet for everyone on this section of SA. My second goal: My dividends end up being at least 100% of my PMI. I do not include 401Ks in this because I have so little control, only taxable account and IRAs. This is a moving target because money moves in and out but as it stands right now:

    Goal #1 - 15 years
    Goal #2 - 26 years
    Goal #2b - 33 years (after presumed inlflation of 4%)

    I don't know if I will ever reach Goal #2 because that's delaying retirement for some internal ego thing that no one else will ever get, and the irony would probably be I reach it and 3 months later get hit by a bus and never enjoy it, so I think I will stick with Goal #1 + 2 years to give myself a real nice cushion.

    Jul 4 09:52 AM | 5 Likes Like |Link to Comment
  • The Art Of Finding Rock Solid Retirement Stocks [View article]

    We are probably close in age, but your picture makes you look a a guess about 5 years youunger than me. I invested in grad schol during the .com boom in the late 90s. One of my classmates took $50K up to $750K (on paper) and we graduated and he had about $150K. This was while trading in-between or even skipping classes because that was a better investment of his time than school was.

    The second time was 2008-2009. Depending on your timeframe, you started investing in 2007 or you started investing mid 2009 and your opinions are totally different than mine on what an investment should be used for.

    Remember what my (still living) gradmother mentions to me - it's all about the cash flow. She doesn't consider her "net worth" when paying for her phone bill and her doctor(s) bills. She looks to see if it fits into her budget. That's what the game is all about - making these investment "annuity-like" that can grow with or exceed inflation. The earlier you do it, the more compounding via DRIPping/reinvestment of dividends will help you greatly.

    Best of luck
    Jun 29 02:58 PM | 6 Likes Like |Link to Comment
  • The Art Of Finding Rock Solid Retirement Stocks [View article]
    Your most important line in your article is this:

    I can afford to buy Bank of America (BAC) and sit on it for 10 years in hopes of achieving a phenomenal return down the road.

    The purpose of DG and the subset of DGI is to not "have to hope" to get a return. Most people that turn to this type of investing have gone past hope and have realized that a return of their money is more important than the return on their money. (Will Rogers)

    Free screener can be found at Don't forget low to moderate D/E and low payout ratios as being important on a checklist.
    Jun 29 02:05 PM | 3 Likes Like |Link to Comment
  • Linn Energy (LINE -2%) says its Linn Co. unit filed plans for an IPO of up to $1B in common stock; proceeds would be used for general corporate purposes, including financing its acquisition strategy, LINE says. The company has been on a buying spree, including today's acquisition of Jonah Field properties from BP for ~$1B.  [View news story]

    So as you understand it, LinnCo will not be a public General Partner, like KMI did with KMR/KMP? I couldn't understand the press release of where LinnCo was inthe heirarchy.
    Jun 25 11:28 PM | Likes Like |Link to Comment
  • Dividend Growth Investing: Reflections On What I've Learned [View article]

    My list is very short because I analyze things differently. But 1st tier undervalued: AFL, BBL, TEVA, WAG (their new European exposure definitely puts a twist on things)

    2nd tier (meaning close to my buy point): LINE, CVX, and UTX.

    The two small caps that I hope go down again: SBSI (currently own some) and WRLS (really interesting space, almost recession resistant IMO, maybe need one more year to see another dividend increase again to go in).


    P.S. Forgot to mention - really great article and loved the series. Clear, concise, logical way to get your SWAN stocks.
    Jun 23 10:17 PM | 1 Like Like |Link to Comment
  • Dividend Growth Investing: Reflections On What I've Learned [View article]
    For non-US stocks, I would try mergent's website. They are the people that make the Dividend Achievers list. They also do a Canadian version and an Internatinal version. They are slightly different than the US guidelines because of (usually) semi-annual dividends, currency exchange rates, and unequal dividend payments, but you have to start somewhere. Definitely not as comprehensive as the CCC list.
    Jun 23 07:34 AM | Likes Like |Link to Comment
  • My Dividend Crossover Point [View article]

    I don't know why this is a big nightmare. In fact, I would love for this nightmare to be a problem. Why? Let's use MCD as our example. We have been DRIPping the shares over time and we have had some dividends be bought as stock at 90, 94, 102, 106. Now it's 88 bucks. Sell the over priced shares and you now have a tax loss. You want a net-tax zero? Sell enough shares that are under $88 to get you a net-tax zero with the overpriced shares.

    I am at a loss why this is that hard?

    Jun 13 06:05 PM | 2 Likes Like |Link to Comment
  • My Fear As A Dividend Investor [View article]

    You can say at least 450 stocks raised their dividends in 2008-2009 because they made it on to Fish's CCC list.

    Lbushmaker: To a certain extent, I understand your point that you can't follow 30+ stocks. But I will argue that is from a total return point of view. I have begun to realize more, with the help of Chowder continuing to bang this point home in numerous threads, that one gets to the equal weighted 33-50 stock range, you protect the income stream, and that's the focus of most of the people that reply on these boards. After one does the due diligence on the stock and purchases at their preconceived buying threshhold, it really boils down to only two questions moving forward:

    1) Has the company drastically changed their operations in the last 12 months that it could affect long term performance?

    2) Did they raise the dividend at a rate greater than inflation?

    If the first answer is no, and the second answer is yes, you are done until the next annual report and the next press release that should announce the next dividend increase. I know this grossly oversimplifies things, but is Coke really going to screw with their formula and come out with New New Coke?

    My .02 reinvested

    Jun 8 09:16 PM | 9 Likes Like |Link to Comment
  • Dividend Disasters And What I Learned From Them [View article]

    Sorry I have not logged in for a few days. If you read the articles by Bob Wells, you will see why he looks so closely at beta. But let me try and explain what beta is:

    Beta is the volatility of price movement as measured against the market (I believe the S&P 500). So if the market moves 1% and your stock moves 1%, the beta is 1.0 (exactly like the market). If your stock moved 2% that day, your beta is 2.0 (twice as volatile) and if it only went up 0.5% that day, it went up only 0.5. (Note: Beta is not measured on 1 day intervals, but either 36 or 60 month intervals)

    There are instruments like reverse ETFs that do exactly the opposite times how much leverage you want (-1.0, -2.0, -3.0).In theory, when times are good (late 90s), you want beta sky high because your stocks were going much higher each day than even the market was doing. Of course, when things sour, KABOOM!!

    Really, what does my comment mean? Find the Steady Eddies - the KOs, and the MOs and the MCDs of the world to be able to sleep well at night. Those losing periods won't be as painful but you won't have the potential highflyers, either, BUT you will be collecting a nice rising dividend stream from companies that have proven themselves for 10-60 years.

    Hope that made sense.

    Jun 4 02:44 PM | 2 Likes Like |Link to Comment
  • Dividend Disasters And What I Learned From Them [View article]
    Ahh.. self-reflection on the part we don't want to admit. Kudos to writing the article and making me realize where I have screwed up and more importantly, why.

    Example 1: Dot com boom. ELON - bought at 20, went to 120 in SIX WEEKS. Didn't sell until like $8 a share because I was too young and stupid to understand (was still in grad school)

    Example 2: Novastar Financial around 2006/7. Sucked in by the ultra high yield and thought all the pundits on the message board were right and just Herb Greenberg was wrong. Lost a killing and licked my wounds from that one.

    Example 3: The current one is TEF. I don't put this in the same category as the first 2, but down just the same. I go back to why did I buy? Telecom (steady utility), increasing dividend (at the time) with international exposure and a great kicker of Latin America.

    Where have I gone wrong? The debacle of the home country and redemption of ETFs, european mutual funds and the likes having to continually sell as the price pushes downward and the DEBT/interest payments continuing to mount. (I still hold TEF)

    What have I learned (and this may not apply to everyone's appetite of investing) with each passing mistake?
    Go with companies that have dividends.
    Go with companies that have rising dividends.
    Go with companies that have manageable debt (VOD over TEF). Go with companies that have moderate payout ratios (TEF over 100%), and
    Go with companies that beta is less than the market (still testing this one in my mind).

    I think the people that really read not only the authors that you mentioned but the comments from those author's articles will save SOOOO much time in investing properly for the long haul. There is no reason to reinvent the wheel when we have so many great wheelmakers showing us openly how they do it.

    My .02 reinvested.

    May 28 10:36 PM | 4 Likes Like |Link to Comment