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  • 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 08:07 AM | 33 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 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 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 05:37 PM | 27 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 10:03 AM | 25 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 11:45 AM | 24 Likes Like |Link to Comment
  • Is Intel's Failure To Hike Its Dividend A Sign Of Things To Come? [View article]
    Alan, Anon:

    I respect your right to invest for ethical or moral reasons.

    Does this also mean you won't invest in fast-food companies (profit from obesity), big oil (pollution, wars), techs (slave-like conditions), big-box retail (low wages, no benefits), banks (nearly ruined global economy, had to be bailed out by taxpayers), automakers (had to be bailed out), health-care companies (poison drugs, recalls, out-of-control costs), etc.?

    An investor can find a legitimate cause-for-concern issue almost anywhere he or she looks.

    Jul 29 03:07 PM | 24 Likes Like |Link to Comment
  • Mortgage REIT Meltdown, I Told You So [View article]

    You know that I consider you well-versed on all things REIT, and you also know I generally agree with you about mREITS. But ...

    Anytime a writer starts a sentence, paragraph or article with the words, "I don't want to offend anyone, and I'm not writing this article to toot my own horn ... " it is a signal that the writer is about to offend many readers and toot his own horn.

    It would be like me saying, "No offense, Brad, but you sound like a braggard and a bully."

    I wouldn't invest in mREITS, but I saw little gained by rubbing salt in the wounds of those who have lost money in them.

    Just my 3 cents. Take it for what it's worth.

    Jul 15 09:07 AM | 23 Likes Like |Link to Comment
  • Dripping Works: A Real-World Example [View article]

    I'll indulge you for awhile ... but only for awhile.

    Yes, Warren Buffett clearly HATES PG. That's why he only owns 53 million shares valued at more than $4 billion, Berkshire Hathaway's fifth-largest holding.

    And yes, if PG enters a serious downtrend and stays in a serious downtrend, it would hurt PG shareholders. Which makes PG different from every other publicly-traded company, how?

    If what you took from this article was a sales pitch for PG, you didn't get my point. PG was merely an example I used to illustrate why I favor dripping. I could have used MMM or COP or PM or any of the other companies I own. I chose PG because it's one of the largest, longest-tenured holdings in my portfolio.

    You are welcome to buy other stocks if you'd like. And you are welcome to do whatever you want with your dividends. We have that freedom here in America, last I checked.

    Now, if you want to have a serious discussion specifically related to what I wrote, I welcome the discourse. If you just want to instigate, I invite you to move along.

    May 20 04:12 PM | 23 Likes Like |Link to Comment
  • When Dividends Beat Stock Buybacks [View article]
    The main way these corporations squander money is by giving their CEOs and other top management huge raises and bonuses every year. And when the worst of them get forced out because they are incompetent or crooked (or both), they get eight-figure golden parachutes.

    That, my friends, is squandering money that could go to shareholders or back into the company.
    Jul 9 04:33 PM | 19 Likes Like |Link to Comment
  • Mr. Market Cannot Be Relied Upon To Provide Dependable REIT Income [View article]

    My only thought on Sam Zell is that he took over the Chicago Tribune and L.A. Times, two of the great newspapers in the world, and in short order bankrupted them. By the time he left just a few years later, they were in ruins ... but he lined his own pockets with money.

    So anything Sam Zell says about anything is automatically -- and this is a technical term, so I hope everybody can figure out what I'm saying -- crapola.

    Feb 7 09:03 AM | 18 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    I made the mistake of pausing for a second on CNBC early this afternoon. While they were screaming about Armageddon, I couldn't help but notice at that moment that the Dow was still over 16,000 and the S&P was over 1800 -- marks that were celebrated as huge bullish breakthroughs just last month!

    Perspective is in pretty short supply these days. Thanks for trying to provide some here.

    Having said that, every correction does start at some point. We don't know yet if this is that point or if it's just the rampaging bull taking a brief respite.

    Jan 24 11:36 PM | 18 Likes Like |Link to Comment
  • A No-Brainer Dividend Growth Investment [View article]
    Several years ago, my son and I went to the Baseball Hall of Fame. When we were finished, we went to McDonald's. Our double-cheeseburgers were so good -- hot and wonderfully greasy -- and our fries were so crisp and hot, that I asked to speak to the manager after our meal.

    He approached me somewhat nervously and I said, "I just want to tell you that was the best meal we have had at McDonald's in a long time. Everything was cooked perfectly. I figured if people want to talk to the manager if they have something to complain about, the least I could do was talk to the manager to offer praise."

    By the look on his face, I'm sure it made his day. And if he shared it with his employees, it made their day, too.

    And I wasn't lying. It was tasty!

    Jan 21 01:56 PM | 18 Likes Like |Link to Comment
  • Why Most Dividend Investors Never Succeed [View article]

    Very few DGI proponents I know of are counting only on dividends to fund their retirement needs and wants. In fact, I'm not sure I've come across any.

    For example, my goal (as I wrote here - is for my portfolio to generate $36,000 in today's dollars, or $3,000 per month.

    I certainly do not expect to live on that $3,000 alone. I calculate that my wife and I also will receive about $3,000 per month in Social Security beginning at age 62 (and much more if we delay until 65 or 67 or 70). We also will receive modest pensions from the private companies for which we've worked. And then there are the non-stock portions of our portfolio, which figure to generate another thousand or two per month.

    Dividends are just one of the baskets that will help make retirement a picnic!

    Dec 26 09:40 AM | 18 Likes Like |Link to Comment
  • Omega Healthcare Is A Sleep-Well-At-Night REIT That Pays 6.27% [View article]
    OK, Brad, but you did indeed call OHI a "lower quality REIT." And you did so in bold-faced print as part of a stern warning to your fellow investors. Those were your words, not mine.

    It certainly is a better value now, but I'm still not sure how it can fit into anybody's Sleep Well At Night category with the highest quality REITs out there.

    By my definition, when something is high risk, it is the opposite of Sleep Well At Night. It doesn't mean one shouldn't own the company, it simply means one might expect a few sleepness nights. That was the essence of your own warning four months ago.

    I'll let it rest now. Have a good one.

    Aug 5 09:39 AM | 18 Likes Like |Link to Comment