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  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    1) I did weed out I removed IBM earlier this year from my portfolio and replaced it with CSCO so periodic review and removal will occur in this portfolio but I am not going to chase current yeild either.

    2) The problem with using mutual funds is if we both track the market 8% annually Fund vs Private holdings, the private holdings will win everytime in the long run because the 0.5%-1.0% management fees taken out of your mutual will kill your performance over time compared to owning the same stocks independently.
    Apr 24, 2014. 01:49 PM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    Personally I think the buffet model is flawed somewhat for the time in which we live. Most of his gains have been made from only a couple stocks that have increased 10,000% since first purchase (I am exaggerating the performance but you get the point)

    I feel like the buffet argument comes up so many times because everyone thinks they know what buffet is doing (When in reality he has created his own version of the buy and hold model. which is what I am trying to do.) but lets take a quick look at some data from the buffet approach:
    1) Buffet currently owns 43 different stocks
    2) 4 stocks comprise 61% of his portfolio (WFC, KO, AXP, IBM) this is due to him never selling core positions
    3) Buffets portfolio contains 18 stocks currently that comprise less than %0.50 each

    from these stats I am going to draw a few conclusions
    1) 43 stocks is a fairly large number, not in terms of mutual fund ownership but still more than I currently own
    2) His portfolio is very top heavy which creates significant exposure risk should 1 of those 4 companies fail to perform (example: IBM is the reason that buffet last year underperformed the broader S&P index for the first time 10 years)
    3) because he owns so little of so many stocks should one or more of those companies have a banner year or market breaking move it will have a minimal impact on his portfolio due to the small presence.

    If you are trying to keep your portfolio balanced in any way you are clearly not following Buffets buy and hold mentality.
    If you do not have core holdings that are positions with which you will not part then you are not following buffets model.

    When its all said and done maybe what I need to add is a vs buffet metric to my portfolio. I will have to consider how I would compare my portfolio versus that of buffet on an annual basis but I feel like this would be a worthwhile endeavor.

    If anyone has any ideas as to a good approach on how to compare my performance versus buffets I would welcome your input.
    Apr 21, 2014. 09:31 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    sharebuilder allows automatic dividend reinvest free for the stock that the payment is coming from but not for other stocks. Thats an interesting feature you have from scottrade.
    Apr 21, 2014. 09:10 AM | Likes Like |Link to Comment
  • My KISS Dividend Portfolio: 1st Quarter 2014 Update [View article]
    understandable I just wanted to let you know what my current methodology was. also generally you have to declare how many shares to sell at the time that you create the trailing stop limit order. it would be a little more difficult in your case because you would probably only want to declare enough shares to sell based upon the share price at the time that you order is created in this case. so you protection would in effect only be for part of your position. your protection would be less than mine but I still think it would work out for you in the long run.
    Apr 18, 2014. 10:28 AM | Likes Like |Link to Comment
  • My KISS Dividend Portfolio: 1st Quarter 2014 Update [View article]
    I am glad to see that someone else also believes in the DGI model. I have written my own articles relating to this type of investing model I however am starting on the other end of the spectrum from where you are since I am only 29 and have many years ahead of me so I am focusing more on the dividend growth potential rather than current yield. As far as you BA problem do you have the ability to use trailing stop limit orders? I have been implementing these in my portfolio for some time to protect overbought stocks while still holding onto them. I had one such transaction trigger last year on O that had a huge run-up right before a huge price collapse. The trailing stop sold at 5% down from the peak and I watched O fall an additional 10% at which point in time I re-bought once I thought fair value had been attained.

    Here are my Conditions for How I implement trailing stops(I use a 5% trailing stop limit order with a limit offset of $0.01):
    1) Stock must be up over 30% above cost basis: this ensures I don't sell a stock for a loss.
    2) Stock has surged more than 5% in under two weeks: my metric for determining quick price runs(you could replace this item with your FAST graph metrics instead)
    3) Average daily volume of shares traded must be above 1,000,000 shares: this ensures that no one large sale of shares can artificially trigger a price drop forcing me out of a position that was manipulated by large value trade.

    This is just my thought, but if you had placed a stop limit order out for boeing using my current model your trade would have looked like the following.

    1) BA's price peaked at 144.57
    2) a 5% trailing stop (like I use) would have set a sale price at 137.34
    3) from what I can tell you owned 153 shares of BA total before you 36 share sale during the Quarter
    4) using my model you would have sold all 153 shares at 137.34 per share for a total sale of 21013.02 (Minus Commision)
    5) after Boeing's price fell to current levels you could have re-bought 15,000 dollars worth of BA at the February low of 121.40 or at whatever level you feel it became re-valued.
    6) if you had bought 15,000 dollars at 121.40 you would have 123 shares in your portfolio with an additional 6,000 leftover for other purchases.
    7) under this model you would own 6 more shares of BA than you currently do for the same purchase price. you would also have an additional 1500 dollars above your current cash level based upon the difference in your sale proceeds for your 36 shares and my stop limit order.
    8) in all totaled my trailing stop limit technique would have saved/made you and additional 2,200 dollars based on BA's price as of today.

    Just a Thought

    Here is my latest portfolio update
    I currently have 2 trailing stop limit orders set up for ADM and DD based upon my metrics.
    Apr 15, 2014. 09:36 AM | 2 Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    In my opinion reaching for fringe companies would not be the goal of an income or dividend growth portfolio. I would rather focus on the growth aspect of reliable companies whose top and bottom lines are growing at a reliable rate. I would say that no more than 20% should be invested in unproven companies. I understand what you are saying and doubling down does help reduce the cost just be sure to not ride the company all the way into the tank.
    Apr 6, 2014. 09:35 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    That is a very solid strategy and one that most would echo. My method is meant to be more thought provoking than traditional styles.
    Apr 6, 2014. 09:31 AM | 1 Like Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I would agree but focusing on higher current yield can also be less reliable if the payout ratio is abnormally high you may be at a higher risk of dividend cuts. Dividend growth is about as reliable as dividends themselves. I would argue that a company focused on dividends should also be focused on dividend growth, if they are not they are probably not a company you should be investing in for its dividends.
    Apr 6, 2014. 09:22 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    also I did a little more research while I don't trade on a day to day basis I do have the ability to do so should I feel that I need to. I further looked into LOYAL3 and I found some interesting information.

    "However, we batch all of the orders and typically execute them once daily"

    this means that you probably don't have the ability to set limit orders or trailing stops or any advanced protection trading techniques that you could potentially employ to protect gains with other brokerage services. I use some of them for my portfolio (I use 5% trailing stop-limit orders for all investments that have risen <30% above cost basis)

    Also how to you know when the trades might execute beginning of the day end of the day middle of the day. while this does sound similar to sharebuilders automatic investment service at least I know when sharebuilder will make their purchases(middle of the morning).

    Just a couple more observations.
    Apr 3, 2014. 09:59 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I looked into LOYAL3 that you spoke of and while it does seem like a great deal the limited selection would be the largest detractor that I see. I own many companies not on their list of stocks. I am also hesitant to use anything that is called free!!!! My grandfather always said "you get what you pay for, and value is in the eye of the consumer" While the second part of that statement would surely resonate I caution you that if they are making no money from your services than what makes then beholden to you should issues/problem/tragedy arise? Answer: none If they aren't making money from you they sure arn't providing this service for free so there are hidden fee's somewhere which means that regardless of what you think your opinion won't matter in the broader sense.
    Apr 3, 2014. 09:51 AM | 2 Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I couldn't agree more and these are the takeaways that I love from readers comments.
    Apr 3, 2014. 09:45 AM | 1 Like Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I would agree with your quote entirely the hardest part of investing is to figure out what kind of investor are you? I find ways to measure success that is reaffirming to me. Someone else may use different metrics to measure their own level of success. I am merely trying to offer a point of view for those who potentially think the same way that I do, as well as offer outside of the box thinking for those who do not think this way.
    Apr 3, 2014. 09:45 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I have heard this view for the last 4 years of my investing life. Everyone is wondering why I am taking such a conservative view of investing considering that I am so young.

    Everyone keeps telling me "you should be taking more risk because hey your younger and if something goes wrong you have time to make up for mistakes."

    I argue that there are significant holes in this logic.

    1) If I do take risk and something bad does happen yes I do have more time to make it up, but that is assuming I can make it up. what happens when I have one stock that loses 50% and then I invest in one that goes up 50%, yes I have made up for my mistake but I have essentially gotten back to zero meaning I am no further ahead today than I was tomorrow
    2) Not all companies are worth investing in. some people assume that just because something is new and fresh that its worth investing in. This is not the case sometimes the older companies that have been around and proven their worth over the years are a better bet because they are institutionally engrained in our society and are not going away anytime soon. some of these tech companies could fold tomorrow and you would be out everything you invested in the.
    3) I am not a fan of volatility. The thing that I love about dividend stocks is that their volatility is significantly lower than that of non dividend paying stocks. while it is true that they don't grow as much in high interest rate environments or that they usually lag the broader index's track by a certain factor, THEY ALSO DON'T FALL AS MUCH DURING TURMOIL. The overall beta for my entire portfolio is 0.65. I prefer less turmoil in my portofolio.
    4) Winning bets on the new and trendy means you have to beat wall street to the punch. I am a firm believer that an average investor has no way of beating wall street at their own game(IPO's, HFT, etc...). They will always find a way to profit from small investors. The only way I feel that you can beat Wall street is to take a longer view than they do. The only strategy that has proven to win over time in both up and down markets is dividend investing. I have merely added the growth element to my dividend income portfolio.
    5) success rate. I would argue that someone starting at age 25 using my model vs the traditional (younger = more risk - older = less risk) will have a greater success rate of actually being able to retire. Now I am not claiming that you will have more money in retirement than the other model because some people will hit a couple home-run investments back to back and end up making bank. I would argue that a smaller percentage of these people will overall succeed than using my model which is an guaranteed income model that you can build over time and rely on and not have to merely sell everything at retirement and then all of a sudden have to figure out how to convert your holdings into income. I have already done that.

    I know this reply was quite wordy but this is definitely a topic that I am passionate about so I love when there are questions like this because it means that I an stimulating people to really question why I would take this approach. Please keep the comments coming!!!!!
    Apr 3, 2014. 09:42 AM | 2 Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    again thank you for the re-affirming support You hit the nail exactly on the head as far as how I view this portfolio/investing strategy. Most income seeking investors that only seek current yield can be burned on their principal by wild price swings in their underlying holdings. if this was strictly about income I would grab the 15 highest paying dividend companies and call it a day. This however is not about income, its rather about income potential 20+ years down the road. I am just trying to find ways to justify to myself that waiting is valuable, and one way to do that is pay yourself to wait (aka Dividends)
    Apr 3, 2014. 09:25 AM | Likes Like |Link to Comment
  • My Income Portfolio Quarterly Update (Q1 2014) [View article]
    I appreciate your quote at the end. I am glad to know that my approach is in use by other investors as well. I am trying to bring this type of investing style to more public awareness than anything else. If indeed I do become wealthy through this technique I will acknowledge you as being the first to recognize this investing styles potential. If success does follow through ups and downs I may one day write a book about my investing strategy. Again my goal was to offer a slightly different take on dividend growth investing from a younger persons point of view who has time on his side and isn't entirely focused on current yield only.
    Apr 3, 2014. 09:21 AM | Likes Like |Link to Comment