Targeting A Retirement Income Level From A Dividend Growth Portfolio - Part 2 [View article]
As you note, this was in an IRA. Wouldn't Larry want his 50,000 after taxes? That means he really needs closer to $60,000 in dividends making the needed DGRs even higher.
Retire In Half The Time With Dividend Growth Investing [View article]
Sorry:
Minor revision to my comment. I said the yield for PAYX would be close to 100% per quarter. The adjusted close for PAYX in March 1990, was $.43 per share. With the current dividend at 32 cents per quarter, the yield on one's ORIGINAL cost of those March 1990 shares would be 74.4% per quarter.
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
jdhd wrote: "The price is determined from the average of the high and low for the quarter and from there is given a 5% discount."
So let me see if I understand this. UPS in that 3 month time period hits a high of $50, and now at the end of the time period, happens to be at the low of $30. They average the 2 to get $40 and you get 5% off $40, so at $39.20 versus the $30 it is currently selling at? Wow, that's a bargain.
I personally DRIP because I don't want to have the headache of trying to figure out which is the most undervalued at the current time. And Jim is slightly incorrect. The price can go down as long as the fundamentals don't change. Lower price = more shares to get more dividends. My guess is FTR's fundamentals have changed in 5 years, KO has not.
5+, you are right. If an addendum to this article can be done to say in these 5 years, the stock value of FTR is down 22%, but the income provided has gone up X%, then that gives a more complete picture.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
One last thing and then I will stop writing. Somoene asked about BAC of C and someone else responded about don't throw all financials out. I looked at the CCC tab titled Changes where Fish talks about cut dividend stocks/merged/unchanged. Now I know this list is not comprehensive and there may be more stocks that were not inclusive, but humor me anyways. Here are the stats:
25+ Year streaks Cut Unchanged Acquire Total 2008 ALL 9 1 3 13 Banks 6 1 0 7
2009 ALL 21 7 2 30 Banks 13 3 0 16
2010-1 ALL 1 5 1 7 Banks 0 2 1 3
All Comp 31 13 6 50 Banks 19 6 1 26
From 8-24 years Cut Unchanged Acquire Total 2008 ALL 0 1 0 1 Banks 0 1 0 1
2009 ALL 7 6 1 14 Banks 4 4 0 8
2010-1 ALL 3 26 1 30 Banks 2 11 0 13
All Comp 10 33 2 45 Banks 6 16 0 22
Quite simply, looking per year or cumulatively, half the dividend problem children are banks. Food for thought.
Conoco-Phillips Spin-Off: Buy One Dividend, Get One Free [View article]
David:
You are not misremembering. I don't know how you search thru my posts, but it was I who saw on a COP powerpoint that it would be current absolute dividend with new COP and .80 cents annually with new spinoff.
I am also like you that I expected the market to tank further and didn't expect to COP to push higher so fast. Que sera sera.
Market-Timing Should Be A Fundamental Component Of Income Investing: Part 1 - Why [View article]
Depraved:
If you want to save some headache, there is a company that already tracks the ranges of companies. Go to iqtends.com and you could download a sample issue.
James, instead of DCA, what do you think about value averaging? I think it's a wonderful twist EXCEPT that one needs to have a lot of cash on the sidelines if and when 2008/2009 happens again.
A Smaller Cap, High Yield Dividend Growth Portfolio [View article]
Jeff:
Maybe I misunderstood the article with the studies, but I took stocks that have been doing 8+ year increases and found this:
Market Cap: 1st Quartile Break is at 1.1 B; Midway is at 3.7 B; 3rd Q is at 15B
Top half of yield breaks at 2.93%, round it to 3% for good measure. Upper quartile is at 4.03% (let's say 4%)
Looking at 1, 5, and 10 yr DGR breakpoints, the sweet spot is dividends growing between 6 and 12% per year, no matter the time frame.
So to me, it becomes a comfort thing. If you want to go micro-cap hunting, be my guest, but I think the sweet spot filter process is:
Mkt Cap between 1B and 15B (may cut that to 10B - so true mid-caps) Yield 3% and higher DGR - 6% minimums on 1, 3, 5, and 10. Anything higher than 15% logically becomes unsustainable over time.
Dividend Champions Smackdown XVIII: The Tweed Factor [View article]
Trademarked? Hard to say this would be trademarked, but I'll try and explain this for those that don't want to go the website. I'll reference two books: Geraldine Weiss - Dividends Don't Lie and Kelley Wright (took over the day to day for Weiss) Dividends Still Don't Lie.
They focus on companies that have paid dividends for 25 or more years, not necessarily rising, but have paid dividends each and every for 25 years. They throw in some other criteria as well (S&P rating, payout ratio, debt levels), but all their stocks pay dividends. They took a stock like ABT and in the old days charted it on graph paper and drew two lines respective to the stock's yield in a given year - one where it hit an "undervalue" point and another line that seemed to show an "overvalue" point. For ABT, it has been historically undervalued RELATIVE TO ITSELF at 3% and overvalued at 1.4%.
CAT, OTOH, has its own range of 3.4% to 1.6% historically. So, now that the yield is 2.2%, it is closer to overvalued but has been in a declining trend since July. LOW is 2.0% - 0.5% so with it now 3% it is considered EXTREMELY undervalued (for obvious reasons). IQT, for their clients, will buy stocks when they are undervalued and wait for them to get overvalued to sell. Been doing this for 40+ years with the best risk-adjusted newsletters for 10 and 15 year stretches.
Do the ranges get adjusted? Over time, I am sure they do, giving a more recent bias, but once the columns are in there, I don't change them - they just sit their in my spreadsheet and are my first filter for what stocks to look at that month/quarter focusing on what is undervalued or close to it.
Dividend Champions Smackdown XVIII: The Tweed Factor [View article]
Allan:
Go to Norman's articles and his most recent one, I explained in the comment section how to easily do this. I think Fish needs to give me credit for doing this first. I may have beat him by 30 minutes ;).
I also said in the comments and as Norman mentioned in his article, the prior dividend growth rate can't be sustained indefinitely, especially if it's 15% or higher. It will cannabailze all of the earnings at some point. So I cut the 1 yr and 5 yr DGR rates in half to see what still succeeded. Interesting cast of characters.
During Accumulation Phase, It's OK To Be Concentrated [View article]
Great point. I think people believe I have to have 20,30, 50 positions to start or I just can't do this, so I will wait. It's kind of like the Confucian saying, "A journey of a thousand miles begin with a single step." Start with one or two positions then search a different industry for the third, then something else for the fourth. Eventually you will have the diversity you need.
Linn Energy - A Stock To Buy With REIT Dividends [View article]
Why would you need to know basis for a Roth? the gov't got their slice when you put it in. You don't need to know what gains or losses came from what you took out of the Roth. The same applies for an IRA or 401K distribution as well. The only difference is that distribution is fully taxed.
A Real Dividend Growth Machine: Q1 2013 Review [View article]
Dang, buyitcheap (comment #2)!!. Now you are into my stream of consciousness. In my state, you don't need a prenup (though it would help). What I would do is this if one is getting married:
If you are getting married on April 10th, you have all the statement and account values as of April 9th. You have concrete documentation of what you brought to the marriage and keep is as a separate account. You intermingle funds, you are screwed In a community property state like mine, the EARNINGS or future value of the account is split 50:50 (theory, reality may be different) because you were together. Using #s:
You go in with $50,000. 5 years later, you get divorced and the account is $100,000. She gets 50% of the earnings (or $25K). You get 75K.
Please note: I am not a lawyer. I am just going through the fun as we speak and wish I never knew this. But the reason I was originally writing was DGM's comment:
"...in my Roth IRA will not be taxed. I showed in a previous article that taxes have a negative effect on long-term compounding of dividend income, so it is helpful to reduce the impact of taxes whenever possible."
Those that are deferring taxes must look at the purchasing power. You will nearly ALWAYS be better going Roth first before anything else. In fact, here is a link to a free book to explain it better than I can. Enjoy. http://bit.ly/XlU17Q
Dividend Growth Investing And The Reluctant Spouse [View article]
NIschill:
Thank you for your comment. As I said in my first comment, I wasn't trying to hijack the thread, but when someone goes from not caring to caring a lot, you unfortunately have to put up your guard, whether you are the man or the woman. Like you, I have not hidden anything from my wife or my lawyer and you can't do anything that is outside of paying the bills when a divorce is filed. I can't buy or sell one share of stock right now even if I wanted to, But she will want more than 50%, way more, in a state that is community property. Even at under age 40, she will be better off than probably 90% of all households in this country, and better than 98% of those in our age group.
I am happy to see you have your financial house in order even if your spouse does not. Since the filing, my wife has been a bigger financial doofus (along with some other family decisions) than I even realized. You think the fight will be bad over splitting assets, wait till she hears I want 50% time with my two kids.
DD
P.S. I have my article 95% penned, I am waiting for things to be finalized to put numbers to it without any consequence. Stay tuned.
Building A Better Retirement With Dividend Income [View article]
GD:
You reduce the RMD by reducing the total value (the nut) of your IRA before you reach 70 1/2 years of age. If the nut is less as of 12/31, the RMD will be less for the next year.
The link I gave to Lange's book, and it is the whole book, is really good (I am now 75% done) and goes through why you would want to start converting some money into Roths sooner rather than later (provided you have the cash flow to do so). It helps with estate purposes and purchasing power. The purchasing power is the key phrase - what money do I really have after tax to spend on whatever I want?
Targeting A Retirement Income Level From A Dividend Growth Portfolio - Part 2 [View article]
Nice illustrations to get the point across.
Retire In Half The Time With Dividend Growth Investing [View article]
Minor revision to my comment. I said the yield for PAYX would be close to 100% per quarter. The adjusted close for PAYX in March 1990, was $.43 per share. With the current dividend at 32 cents per quarter, the yield on one's ORIGINAL cost of those March 1990 shares would be 74.4% per quarter.
My apologies if that didn't make sense before.
eyetri2
Core Portfolio For The 58 Year Old [View article]
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
"The price is determined from the average of the high and low for the quarter and from there is given a 5% discount."
So let me see if I understand this. UPS in that 3 month time period hits a high of $50, and now at the end of the time period, happens to be at the low of $30. They average the 2 to get $40 and you get 5% off $40, so at $39.20 versus the $30 it is currently selling at? Wow, that's a bargain.
I personally DRIP because I don't want to have the headache of trying to figure out which is the most undervalued at the current time. And Jim is slightly incorrect. The price can go down as long as the fundamentals don't change. Lower price = more shares to get more dividends. My guess is FTR's fundamentals have changed in 5 years, KO has not.
5+, you are right. If an addendum to this article can be done to say in these 5 years, the stock value of FTR is down 22%, but the income provided has gone up X%, then that gives a more complete picture.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
25+ Year streaks
Cut Unchanged Acquire Total
2008 ALL 9 1 3 13
Banks 6 1 0 7
2009 ALL 21 7 2 30
Banks 13 3 0 16
2010-1 ALL 1 5 1 7
Banks 0 2 1 3
All Comp 31 13 6 50
Banks 19 6 1 26
From 8-24 years
Cut Unchanged Acquire Total
2008 ALL 0 1 0 1
Banks 0 1 0 1
2009 ALL 7 6 1 14
Banks 4 4 0 8
2010-1 ALL 3 26 1 30
Banks 2 11 0 13
All Comp 10 33 2 45
Banks 6 16 0 22
Quite simply, looking per year or cumulatively, half the dividend problem children are banks. Food for thought.
eyetri2
Conoco-Phillips Spin-Off: Buy One Dividend, Get One Free [View article]
You are not misremembering. I don't know how you search thru my posts, but it was I who saw on a COP powerpoint that it would be current absolute dividend with new COP and .80 cents annually with new spinoff.
I am also like you that I expected the market to tank further and didn't expect to COP to push higher so fast. Que sera sera.
Market-Timing Should Be A Fundamental Component Of Income Investing: Part 1 - Why [View article]
If you want to save some headache, there is a company that already tracks the ranges of companies. Go to iqtends.com and you could download a sample issue.
James, instead of DCA, what do you think about value averaging? I think it's a wonderful twist EXCEPT that one needs to have a lot of cash on the sidelines if and when 2008/2009 happens again.
eyetri2
A Smaller Cap, High Yield Dividend Growth Portfolio [View article]
Maybe I misunderstood the article with the studies, but I took stocks that have been doing 8+ year increases and found this:
Market Cap: 1st Quartile Break is at 1.1 B; Midway is at 3.7 B; 3rd Q is at 15B
Top half of yield breaks at 2.93%, round it to 3% for good measure. Upper quartile is at 4.03% (let's say 4%)
Looking at 1, 5, and 10 yr DGR breakpoints, the sweet spot is dividends growing between 6 and 12% per year, no matter the time frame.
So to me, it becomes a comfort thing. If you want to go micro-cap hunting, be my guest, but I think the sweet spot filter process is:
Mkt Cap between 1B and 15B (may cut that to 10B - so true mid-caps)
Yield 3% and higher
DGR - 6% minimums on 1, 3, 5, and 10. Anything higher than 15% logically becomes unsustainable over time.
eyetri2
Dividend Champions Smackdown XVIII: The Tweed Factor [View article]
They focus on companies that have paid dividends for 25 or more years, not necessarily rising, but have paid dividends each and every for 25 years. They throw in some other criteria as well (S&P rating, payout ratio, debt levels), but all their stocks pay dividends. They took a stock like ABT and in the old days charted it on graph paper and drew two lines respective to the stock's yield in a given year - one where it hit an "undervalue" point and another line that seemed to show an "overvalue" point. For ABT, it has been historically undervalued RELATIVE TO ITSELF at 3% and overvalued at 1.4%.
CAT, OTOH, has its own range of 3.4% to 1.6% historically. So, now that the yield is 2.2%, it is closer to overvalued but has been in a declining trend since July. LOW is 2.0% - 0.5% so with it now 3% it is considered EXTREMELY undervalued (for obvious reasons). IQT, for their clients, will buy stocks when they are undervalued and wait for them to get overvalued to sell. Been doing this for 40+ years with the best risk-adjusted newsletters for 10 and 15 year stretches.
Do the ranges get adjusted? Over time, I am sure they do, giving a more recent bias, but once the columns are in there, I don't change them - they just sit their in my spreadsheet and are my first filter for what stocks to look at that month/quarter focusing on what is undervalued or close to it.
Hope that made sense.
eyetri2
Dividend Champions Smackdown XVIII: The Tweed Factor [View article]
Go to Norman's articles and his most recent one, I explained in the comment section how to easily do this. I think Fish needs to give me credit for doing this first. I may have beat him by 30 minutes ;).
I also said in the comments and as Norman mentioned in his article, the prior dividend growth rate can't be sustained indefinitely, especially if it's 15% or higher. It will cannabailze all of the earnings at some point. So I cut the 1 yr and 5 yr DGR rates in half to see what still succeeded. Interesting cast of characters.
Best of luck.
eyetri2
During Accumulation Phase, It's OK To Be Concentrated [View article]
DD
Linn Energy - A Stock To Buy With REIT Dividends [View article]
DD
A Real Dividend Growth Machine: Q1 2013 Review [View article]
If you are getting married on April 10th, you have all the statement and account values as of April 9th. You have concrete documentation of what you brought to the marriage and keep is as a separate account. You intermingle funds, you are screwed In a community property state like mine, the EARNINGS or future value of the account is split 50:50 (theory, reality may be different) because you were together. Using #s:
You go in with $50,000. 5 years later, you get divorced and the account is $100,000. She gets 50% of the earnings (or $25K). You get 75K.
Please note: I am not a lawyer. I am just going through the fun as we speak and wish I never knew this. But the reason I was originally writing was DGM's comment:
"...in my Roth IRA will not be taxed. I showed in a previous article that taxes have a negative effect on long-term compounding of dividend income, so it is helpful to reduce the impact of taxes whenever possible."
Those that are deferring taxes must look at the purchasing power. You will nearly ALWAYS be better going Roth first before anything else. In fact, here is a link to a free book to explain it better than I can. Enjoy. http://bit.ly/XlU17Q
DD
Dividend Growth Investing And The Reluctant Spouse [View article]
Thank you for your comment. As I said in my first comment, I wasn't trying to hijack the thread, but when someone goes from not caring to caring a lot, you unfortunately have to put up your guard, whether you are the man or the woman. Like you, I have not hidden anything from my wife or my lawyer and you can't do anything that is outside of paying the bills when a divorce is filed. I can't buy or sell one share of stock right now even if I wanted to, But she will want more than 50%, way more, in a state that is community property. Even at under age 40, she will be better off than probably 90% of all households in this country, and better than 98% of those in our age group.
I am happy to see you have your financial house in order even if your spouse does not. Since the filing, my wife has been a bigger financial doofus (along with some other family decisions) than I even realized. You think the fight will be bad over splitting assets, wait till she hears I want 50% time with my two kids.
DD
P.S. I have my article 95% penned, I am waiting for things to be finalized to put numbers to it without any consequence. Stay tuned.
Building A Better Retirement With Dividend Income [View article]
You reduce the RMD by reducing the total value (the nut) of your IRA before you reach 70 1/2 years of age. If the nut is less as of 12/31, the RMD will be less for the next year.
The link I gave to Lange's book, and it is the whole book, is really good (I am now 75% done) and goes through why you would want to start converting some money into Roths sooner rather than later (provided you have the cash flow to do so). It helps with estate purposes and purchasing power. The purchasing power is the key phrase - what money do I really have after tax to spend on whatever I want?
DD