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  • 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 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 08:07 AM | 33 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 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 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
  • 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 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 09:17 AM | 26 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 03:55 PM | 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 | 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 10:03 AM | 25 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]

    It's the GOP's jobs program. Lots of lawyers will get paid. They don't care that there will be no resolution, just a circus. They get their money either way.

    Jul 31 11:07 PM | 24 Likes Like |Link to Comment
  • Correction, Interrupted [View article]
    So basically, what you're saying is you don't know.

    Welcome to the club.

    Jun 2 08:58 AM | 24 Likes Like |Link to Comment
  • Retirement Strategy: Did You Buy The Last Dip? You Should Have, But There Will Be Others [View article]

    <<When does buying the dips not work?>

    Well, for a lot of companies, it didn't work very well in 2007-08. Let's say you wanted to buy GE on the dips. So every time it went down a couple percent, you bought another batch. You started at $41. And you bought more at 40. And you bought more at 39. And you bought more at 37. And you bought more at 35.

    You get my drift. Sooner or later, you're going to wake up and realize, "Hey, this dip isn't a dip ... it's a freakin' correction." So you wait for a 10% fall and buy GE at 33 and again at 30. And then you say, "Hey, this isn't just a correction, it's a freakin' recession."

    By that time, though, you've bought thousands of dollars of GE at prices that STILL haven't been reached 6-7 years later!

    Oh, and as a "bonus," you're freaked out by this falling knife and you stop buying ... just when you could have accumulated GE at 18 and 14 and 10 and 7 -- prices that turned out to be deeply discounted bargains instead of buy-the-dip non-bargains.

    And GE wasn't alone during this period. It had plenty, plenty, plenty of company.

    Having said all that ...

    I like to buy the dips and do so quite often. But there have been times when I've worried, "Is this a dip or the start of something much, much more ominous? And if it is the start of a 40% crash, shouldn't I wait for more than a 2% dip?" Most of the time I've ignored that inner voice and bought on the dips, anyway.

    The past few years, we've been fortunate that the dips haven't turned out to be a recession. Since 2009, buying the dips has been an excellent strategy. But it isn't a slam-dunk strategy if a bear market is just around the corner. And, unfortunately, bear markets don't always advertise that they are coming!

    May 7 02:18 PM | 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