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  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]

    First, if you transfer money to any of about a dozen brokerages tomorrow, you can get anywhere from 25 to hundreds of trades for free. Some even offer extra cash incentives.

    Second, if you read the article, you know that I don't plan to sell any of these positions, at least not for a very long time. If and when the time does come to sell, this portfolio will be worth hundreds of thousands of dollars and will have produced tens of thousands of dollars in dividends ... so I will laugh at a few hundred dollars in commissions.

    Third, as I explained in the article, the portfolio is held within my IRA and I won't even concern myself with taxes until RMDs come a'callin'. I just turned 54, so that's a looooong time from now.

    In the future, it would help your case if you actually read articles all the way through before voicing your criticisms of them.

    Dec 17, 2014. 11:44 PM | 54 Likes Like |Link to Comment
  • Dividend Growth Investors Focused On Income Earn Higher Total Returns [View article]
    Hi Chuck.

    I am thrilled and honored that you used my series as the basis for this important and revealing discussion. Compiling the viewpoints of some of the best DGIs on Seeking Alpha and writing the articles helped me tremendously as an investor.

    Your article is eye-opening. So many folks want to make things black and white, one or the other. As is the case with life itself, investing is more nuanced than that. You provide some cold, hard facts -- as well as insightful opinions based on your long involvement in personal finance. Great stuff.

    I currently am working on a forward-looking project involving the New Nifty Fifty. It will be a real-money, real-time portfolio that I will track over years and, hopefully, decades. I have just completed the paperwork to transfer funds into the account that will house the study. As soon as the money makes it in there, the portfolio will be built and I will write my first article about the project. I'd like to get the article done before Christmas but it might not happen until early in the New Year. I hope you and your readers will look for it.

    It's fun and instructive to look back and it's exciting to look ahead!

    Thanks for all you do for Seeking Alpha readers.

    Dec 12, 2014. 12:41 PM | 52 Likes Like |Link to Comment
  • The Real Nifty 50 For Dividend Growth Investors [View article]

    First, thanks for linking to Part 1 of my series. However ...

    In my article, I DID list the 50 companies that represented the consensus choice of the 10 Seeking Alpha panelists -- so I have no idea why in you state: "I am not sure if there was an actual list of 50 from the article series."

    I am sure. They were right in Part 1, plain as day, in table form. I even listed data points for each of the 50.

    The 39 companies you referenced actually came from Part 3 of my series -- These were the 39 companies from the panelists' consensus that also happened to be in the 50 I selected.

    The 11 you omitted from your article (for whatever reason) also were mentioned prominently in Part 3. They are: AFL, CAT, CLX, D, EMR, GE, GPC, IBM, SJM, TGT and WFC. Along with the 39 companies you listed, these 11 round out the New DGI Nifty Fifty. FWIW, several of those 11 are in VDIGX.

    It is a free world, and you can write whatever you want in your series. I am flattered that you recognize the hard work I put in and that you acknowledge the panelists ... even if your ultimate goal is to prove we have erred somehow.

    Nevertheless, if you do continue this series, you might want to ... I don't know ... actually list all 50 companies in the New Nifty Fifty?

    As for comparisons to VDIGX ... I do hope that since DGIs invest first with dividend growth in mind, you will show how VDIGX has proven to reliably grow its dividends year over year over year, through recessions and wars and political hijinks. Unless, of course, you can't demonstrate that because it isn't the case.

    And since most DGIs, especially those in retirement, focus on the actual income their portfolio produces, I am sure you will demonstrate the superior income-producing ability of VDIGX. That could be a challenge given its sub-2% yield, but maybe I'll be surprised.

    You also might eventually choose to acknowledge that I wasn't telling investors to buy all 50 New Nifties. Here is how I said it in Part 1:

    <<... The purpose of the article isn't to encourage readers to rush out and buy everything on the list. Instead, an investor might say, "Wow, these 10 panelists sure dig Johnson & Johnson. I'll give it another close look, and if I like it as much as they do I'll grab some when it enters my value zone.">>

    Whereas every VDIGX investor must hold UPS, LMT and UNH -- the fund's top three holdings -- whether they want those companies or not, the purpose of my article clearly was to present companies worthy of further due diligence. Also, every VDIGX investor is paying to own its component companies regardless of how they are valued at the time; I think you'll agree that the vast majority of DGIs aim to buy companies when they are fairly valued or undervalued.

    Oh, and since you must want it to be an apples-for-apples comparison, I am sure you will somehow show how VDIGX's expenses will, over time, affect a position in that fund. Just my back-of-napkin calculations show that $100,000 held in VDIGX for a year will produce fees of $310. By midway through Year 2, those fees would easily eclipse the one-time trading commissions to purchase all 50 of the New Nifties (in the unlikely event that an investor actually would buy all 50).

    Finally, you said in this article:

    "Let's hope the history of the original Nifty Fifty does not repeat itself. Of course the original Nifty Fifty were can't-miss buy and hold forever companies with a history of consistent earnings growth. The group largely went on to underperform the broader market indices in certain periods due to overvaluation levels - perhaps the moniker made them too popular and too expensive."

    Where do I start? As I wrote in the article that kind of inspired the entire New Nifty Fifty idea -- -- an investor who actually invested in the original Nifty Fifty would not have emerged destitute, as some like to believe. A person who put $1,000 into each stock, held each stock for 40 years and reinvested dividends along the way would be a multimillionaire now. And that's even if dozens of positions within that group had gone completely out of business (which didn't happen).

    Did the group "underperform the broader market indeces in certain periods"? Yes. Did it also overperform in certain periods? Yes. Did it depend upon the periods? Yes. Was it even possible to buy indeces back then? No. Would DGIs even have bought most of the stocks on that list? No, which is why I wanted to come up with a modern list that accentuated dividend growth.

    Anyway, I will be interested to see which facts you choose to present in the remainder of your study.

    Meanwhile, your readers might be interested to know that a little later this year, I will be coming out with a real-time, real-money portfolio involving the New Nifty Fifty. I hope they look for it.

    Nov 18, 2014. 09:40 AM | 46 Likes Like |Link to Comment
  • How Do You Hold Cash When Realty Income Or AT&T Are Available? [View article]

    I have some dry powder, so I don't fully agree with the author, but unless I am provoked, I would never call a fellow human being moronic.

    Disagree. Debate. Argue. But have some class.

    Aug 13, 2014. 02:09 AM | 42 Likes Like |Link to Comment
  • Why Most Dividend Investors Never Succeed [View article]

    Excellent article that made a lot of great points. I can see myself in the list of common mistakes and I'm sure other readers can, too.

    One thing I got out of this that might not have been one of your intended purposes when writing the article:

    If one had invested $10,000 apiece in WMT and nine other stocks 30 years ago, one would have nearly $1 million today. This despite the other 9 going bust and WMT having gone through several sideways/dead periods.

    To me, this underscores what's great about Dividend Growth Investing. We need not be perfect as investors -- we want to avoid mistakes but we know we won't. But by searching out quality, proven dividend growers at good valuations, and by not panic-selling when the market is up to its usual shenanigans, we can succeed even if a few of our investments go belly-up.

    Dec 26, 2013. 08:07 AM | 33 Likes Like |Link to Comment
  • Prospect Capital: What Comes Next? Part 6 [View article]

    What a silly comment.

    If Buzz is right and your comment is misleading investors, will you reward Buzz?

    Simply stated, if you don't like Buzz's advice, don't follow it. And if you've got something intelligent, worthwhile and fact-based to add to the discussion, do so.

    Oct 20, 2014. 09:59 AM | 32 Likes Like |Link to Comment
  • DGI For Dummies: Managing Your Dividend Growth Portfolio [View article]

    <<I am a dividend growth investor that combines the wisdom of Buffett [BRK is still about half my portfolio] with the dividend growth strategy. So I don't do it like many on here insist is the only way>>

    Please name 3 DGIs who say their strategy is "the only way." I can't. Heck, it's hard to name 3 DGIs who follow the strategy the SAME way. Each of us has his/her own way within the system.

    For example, I use the DGI strategy with most of my individual stocks, but not all. Individual stocks make up about two-thirds of my portfolio. I have some bond exposure and a rather large stake in Vanguard Wellington. I like having some cash on hand. I don't own any company yielding even 6.5%, and most are in the 2.7% to 3.7% range.

    Many, many, many DGIs do things very differently, yet we are all DGIs.

    Based upon my reading comment streams on SA for about 3 years, I'd say one is far more likely to find a commenter opposed to DGI opining that DGI is the wrong way than to find a DGI practitioner say DGI is the only way.

    I wish you good fortune, regardless of the way you achieve it.

    Sep 5, 2014. 06:24 PM | 29 Likes Like |Link to Comment
  • Why Most Dividend Investors Never Succeed [View article]

    Not to speak for the author, but I believe he's saying the mistake is made when somebody sells just because stock price has appreciated by 100% or more. Sometimes one should sell and sometimes one should hold, but it depends on the fundamentals, not the price. It's not an easy thing to learn. I'm still struggling with the sell decision.

    Of course, if one needs the money, that's an entirely different variable. The author also covers that, saying that it's important to know why somebody has made a transaction before following his/her advice.

    Dec 26, 2013. 08:01 AM | 29 Likes Like |Link to Comment
  • REIT Interest-Rate Concerns May Be Overblown [View article]

    Small quibble: It's not "real money" if one doesn't sell.

    I own the exact same number of shares of NHI, OHI, O, HCN and NNN today as I did before the REIT pullback. Actually, that's wrong, I now own more shares because I've been reinvesting dividends -- at much lower prices, to boot.

    I plan to hold all of the above long-term. They will go up, as they did in May, and they will go down, as is happening now. I figure that years and decades from now, I will be happy I have owned these companies because I will have made real money on them.

    Dec 6, 2013. 09:03 AM | 29 Likes Like |Link to Comment
  • Bogle's Views On Retirement Income [View article]
    I long ago vowed to stop using SA comment streams for political discourse.

    All I'll say is that I only can invest based upon what I know is true today.

    To project that SS will die or that COLAs will stop cold or that the government is coming for our IRAs or that Roths are going to start getting taxed ... well all of that simply is not productive thinking that can help me plan intelligently.

    For those who think any or all of the negative scenarios will come true, then simply invest more. Then you can be pleasantly surprised instead of unpleasantly surprised.
    Jul 19, 2013. 05:37 PM | 28 Likes Like |Link to Comment
  • 31 Beaten-Down Dividend Growth Stocks: Part 2 [View article]

    Sorry ... you lost me at "put down your beer."

    Oct 15, 2014. 03:55 PM | 26 Likes Like |Link to Comment
  • Surviving A Worst-Case Scenario To Become A Dividend Growth Investor [View article]

    <<Of course not a single person on this thread believes this. And am sure I will be ignored.>>

    First of all, I don't ignore anybody who treats me and other readers with respect. Despite a little bit of "I'm right and the rest of you are wrong" attitude, you have shown no disrespect. You deserve a reply.

    Second, many on this thread will believe much of what you say. See, one of the major misconceptions is that all DGIs are the same. I do tend to go for more "old line companies," as you labeled them, but well over a third of my portfolio has nothing to do with "typical DGI companies." Many DGIs mix in lots of newbies - and even companies that pay no dividends at all. It's rarely a good idea to label or generalize.

    And as for "old line companies" ... I'm guessing that 15 years ago, there were those who said that "old line companies" such as JNJ, PG and MMM would be out of business by now. Just because one buys an "old line company," it doesn't mean one doesn't project to the future. I happen to think all three of those - and the couple dozen other "old line companies" I own have bright futures ... or I wouldn't own them.

    Not all that long ago, AOL and WCOM and Nortel (and pretty much everything dot com) were "titans of the future" ... until they ceased to exist. "Coca-Cola? Bo-ring!!! Global Crossing is where it's at, baby!"

    Anyway, thanks for providing an alternate viewpoint.

    Sep 18, 2014. 11:47 PM | 26 Likes Like |Link to Comment
  • Safe Large-Cap Blue-Chip Dividend Champions For Your Retirement Portfolios: Part 2 [View article]
    Wow, nicholas.

    50K plus SS is well more than the average working American earns now. For a senior who also is on Medicare and who hopefully has low debt (and maybe even no mortgage), it should be more than enough in most cities in the U.S.

    I don't know where you live, but I live in Charlotte. 50k plus SS of, say, 36k for a couple - that's more than 7k a month in a fairly low-cost area. Heck, this fictional couple will be doing so well in retirement that staying in a low enough tax bracket will be a far bigger concern than having to choose between Friskies and Meow Mix!

    You often make good points on comment streams but you tend to overdo it with hyperbole, exaggeration and downright fact-inventing.

    I am nowhere near the 1% but I am debt-free, mortgage-free and living in an affordable area. I have zero doubt - zero! - that my dividend income and SS will be more than enough for my wife and I to thoroughly enjoy our retirement.

    Aug 27, 2014. 09:17 AM | 26 Likes Like |Link to Comment
  • Rising Risks For Dividend Growth Investors [View article]
    Hi Eric.

    First, well-written, thought-provoking piece.

    I am one of the relatively new DGI proponents to which you refer. I am not a kid, and I have been through several recessions/corrections over the years, but only about 2 years ago did I decide to cast my lot primarily with DGI. I am not 100% in equities, but individual stocks do make up well over half of my portfolio and almost all of those are DG companies.

    I went into this with my eyes wide open. I did not read one article and jump into DGI; I considered it for a long time and did months and months of research before putting one penny in one individual stock. And as I built and refined and tweaked my portfolio, I did so with the idea that nothing lasts forever. A little less than a year ago, I decided to heavily favor the most high-quality dividend growers, especially those that weren't overvalued at the time I bought them. I have mostly tried to stick with companies that provide products and services we will always need and want, and thus am overweight Consumer Staples and Energy.

    I am not a "zealot" or "cultist," as some like to refer to those who favor the DGI strategy. I fully acknowledge that there are many ways to invest successfully, and I wish nothing but success for all of us.

    However, from the time I first read about DGI, through all of my research, through my decision to focus on DG companies, through now, when 95% of my portfolio is complete, I have not read or heard one thing to make me believe that DGI is not an excellent, common-sense strategy for building income and wealth for retirement.

    For while not a single one of us can predict whether any stock prices will rise, fall or be flat over the decades, I can be reasonably sure that the high-quality companies I have chosen to own will continue providing me a rising dividend stream during thick and thin. Were I a retiree in 2008-09, if I had to draw down my investments by 4% even as they were being reduced by 30 or 40 or 50%, it would have been a great financial hardship. But were I a DGI in 2008-09 and didn't have to touch my principal while living off a still-rising dividend stream, I believe I would have been far less prone to panic or worry. It simply makes sense.

    Yes, even some blue-chip companies that were favored by DG investors have gone belly-up or have dramatically cut their dividends. But the vast majority have not. One of the three things I take from your article came in a comment you made earlier, about 25% turnover in Dividend Aristocrats since 2010. That number surprised me because I wouldn't have thought it to be that high, but it also means that there was NOT turnover among 75% of Dividend Aristocrats. So while the Aristocrats are not bullet-proof, the odds are quite favorable.

    The second main thing I got from the article was the statistic you cited that DG stocks suffered a 56% peak-to-trough loss during the recession. This is an eye-opening number to be sure and it is a cautionary tale for all investors -- DGI and otherwise. Within that statement, however, there is confirmation that the strategy works for those who are resolute in the face of adversity. As long as investors didn't panic and sell, they not only recovered but thrived since 2009. And those who were intelligent enough and brave enough to invest more near the bottom have become rich -- and did so not by taking wild forays into upstart companies but simply by investing heavily in outstanding, proven companies when they were available at deep discount.

    Finally, I am glad you reinforced the importance of stock selection. I have tried to buy companies only when they are fairly valued or undervalued. It is harder to find those now than before, but some are still out there. I am mostly done with the accumulation stage, so I am content to watch the value of my portfolio rise as I collect my dividends. All the while, I know that no bull market lasts forever.

    I did not panic and sell my mutual funds or my few individual stocks from 2007-09. So, now that I have embraced DGI while also building a large cash emergency fund and other non-stock holdings that balance our portfolio, I like to think I will not panic and sell my DG companies when the next correction arrives.

    I guess all of us will find out this year or next year or however many years from now when it happens.

    Read that last sentence again, everyone. Lots of folks have been predicting an imminent correction for 2+ years. It could happen any day! But it hasn't. And those who acted as if it was going to happen any day by selling everything and going all cash certainly have not helped their portfolios.

    The truth is that none of us knows, so I choose to remain invested in extremely high-quality companies with long histories of rising dividends. To me, it's common sense.

    Again, Eric, thanks for providing a forum to discuss this important subject.

    Mar 29, 2014. 11:45 AM | 25 Likes Like |Link to Comment
  • You Don't Need $2.5 Million To Retire [View article]

    I don't know your situation at all, but I do wonder if you really "need" 100K in income.

    Before moving to Charlotte three years ago, we lived in Chicago for 16 years. I can't compare Chicago to NJ, but I will tell you it is a VERY expensive place to live, always right up there with NY, LA, SF, DC, Boston, Seattle on the top of the most-expensive lists.

    For most of that time, my wife was a stay-at-home mom. My salary was less than 100K/yr that whole time, far less most of it.

    Our family of 4 lived in a small, old but nice home that we gradually updated. We shared one full bath. We certainly would have liked a second bath or a master bath, but we didn't "need" one. My son's room was 8x9 with no closet. He would have liked a bigger room, but he didn't "need" one. Our kitchen had formica counters; we would have liked granite but we didn't "need" it. We had a very small yard and would have liked more space but we didn't "need" it; there were nice neighborhood parks nearby. Our kids played sports but they weren't on the expensive traveling teams. For family entertainment, we played board games or played outside. Usually, when we took a family vacation, we drove to visit family and friends. As our income increased, especially after my wife went back to work, we did more things and treated ourselves to more niceties, but we didn't go hog wild because none of those "wants" were actual "needs."

    My one silliness was cars. I didn't like to drive old cars and when they would get close to being out of warranty, I'd trade 'em in. I no longer do that and wish I had stopped sooner; I'd probably have another 100k at least in investment savings.

    Again, I don't know your circumstances. But I think that for most of us, if we sat down and really thought about "wants" vs. "needs" we'd surprise ourselves.

    Nov 10, 2013. 10:03 AM | 25 Likes Like |Link to Comment