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  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    excellent point, bionic!
    Jun 1, 2015. 11:41 AM | Likes Like |Link to Comment
  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    HYI - Thanks for the comments. Investing is a business and you are ahead of the game by thinking of it in that context.

    The danger of YOC is that you are only calculating yield on your original investment and not considering the yield on the entire capital you have exposed in that position.

    Think about this example...

    If you invested $10,000 in MCD 10 years ago at $30 (split-adjusted), your YOC would be ~11.3% today. While its true you are earning 11.3% on the original $10,000, your actual capital position in the stock is over $32,000. In other words, you are ignoring what you are earning on two-thirds of your position by looking at YOC. In reality, you are earning 3.5% on your current $32,000 investment in MCD.

    This is where our points about focusing on dollar income and capital redeployment come into play. Can you earn more risk-adjusted income by redeploying all or part of your MCD position into a different stock with a lower YOC?
    Jun 1, 2015. 11:17 AM | 4 Likes Like |Link to Comment
  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    Jim - I think you bring up a good point with active vs. passive investor. All investors must deploy capital at some point. You may only do it several times a year and CPA may do it several times a month...but the concept of maximizing risk-adjusted income (upon deployment) is the same.
    Jun 1, 2015. 10:59 AM | Likes Like |Link to Comment
  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    cpa - There are those that get it...and those that don't. You get it!
    Jun 1, 2015. 09:19 AM | Likes Like |Link to Comment
  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    Hi Jim - Thanks for the comment. The point of the article was to encourage investors to focus on income growth in dollar terms and to place less emphasis on percentages. Focusing on dollar income will also help you tune out daily price fluctuations.

    We also advocate that investors always analyze their income stream in dollar terms and to always look for ways to grow that income stream while maintaining or improving the risk-adjusted capital position of their portfolio (i.e., buying stocks with better relative valuations). This includes investing new capital as well as reallocating existing capital.

    If you can increase your income without increasing your overall risk...why wouldn't you?
    Jun 1, 2015. 08:09 AM | 1 Like Like |Link to Comment
  • Yield-On-Cost: A False Sense Of Security For Dividend Investors [View article]
    Pickin - Thanks for the comment. BMY has been one of the best performing stocks in the healthcare sector over the past few years (a sector that has a dearth of good dividend growth candidates). That said, we hear your point about its dividend growth history. We chose BMY for this analysis because the yield-on-cost wasn't so egregious or obvious. In fact, its yield-on-cost was almost equivalent to JNJ's current yield, which we think made a stronger point about focusing on dividend growth in dollar terms.
    Jun 1, 2015. 07:04 AM | 4 Likes Like |Link to Comment
  • The All-Aristocrat Team: 35 Income Generating Dividend Machines (Part 4) [View article]
    Hi bk14857 - see link below:

    http://tinyurl.com/qzk...
    May 30, 2015. 08:41 PM | Likes Like |Link to Comment
  • The All-Aristocrat Team: 35 Income Generating Dividend Machines (Part 4) [View article]
    grisly - Love the name, btw.

    MMM is too darn high...but unfortunately, the stock doesn't tend to pull back very much when it does. Our Buy Zone for MMM is $142.00-$152.00. Send us a message with your email address and we will send you a free Buy Zone report for MMM.

    CVX's Safety Rating (14) is currently hurting its position on the All-Aristocrat Team...otherwise it would be higher.
    May 29, 2015. 01:27 PM | 1 Like Like |Link to Comment
  • The All-Aristocrat Team: 35 Income Generating Dividend Machines (Part 4) [View article]
    Thanks, Bingo. CVX is a great company with a fantastic yield right now!
    May 29, 2015. 12:18 PM | Likes Like |Link to Comment
  • The All-Aristocrat Team: 35 Income Generating Dividend Machines (Part 4) [View article]
    Thanks for the comment, rhiannion.
    May 29, 2015. 12:17 PM | Likes Like |Link to Comment
  • Correction 2015? Be Prepared To 'Buy The Dip' [View article]
    $118.00 would only be about a 10% drop. Certainly possible if there is a broad market selloff since Apple is such a large part of the S&P weighting...
    May 28, 2015. 03:02 PM | Likes Like |Link to Comment
  • Correction 2015? Be Prepared To 'Buy The Dip' [View article]
    Great strategy and prices, Myer! Send us a message (click "send message" link above) with your email address and we will send you a couple of sample Buy Zone reports for the stocks mentioned above.
    May 28, 2015. 11:13 AM | Likes Like |Link to Comment
  • Correction 2015? Be Prepared To 'Buy The Dip' [View article]
    Buying great stocks at good prices is a winning strategy long-term. Stay patient! As this article suggests, cash-secured puts are a great use of idle cash. Here is a link to a short primer we wrote on cash-secured puts and covered calls (specifically with dividend investors in mind):

    http://bit.ly/1zeVAEx
    May 28, 2015. 10:37 AM | 1 Like Like |Link to Comment
  • Correction 2015? Be Prepared To 'Buy The Dip' [View article]
    It would definitely be nice to buy some stocks on sale! We would settle for a small 10% correction at this point...
    May 28, 2015. 09:34 AM | Likes Like |Link to Comment
  • 3 'Fairly Valued' Dividend Stocks That You Could Buy Today [View article]
    haha. excellent point! buying tomorrow would be ok too...
    May 25, 2015. 12:49 PM | Likes Like |Link to Comment
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