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  • DIY Dividend Portfolio: Protection For A Correction [View article]
    Hedging may not be for everyone, but as food for thought...wouldn't it be great if you could protect your downside AND buy stocks really cheap on a pullback. Hedging and buying the dip on great stocks is not mutually exclusive. You can (and should consider) doing both. If anything, when you have a hedge in place, it makes it that much easy to pull the trigger when stocks trade down...because if stocks go lower you are already hedged!

    The only thing you are giving up by hedging is possibly a little upside. If stocks continue to rally, the capital gains in your portfolio should more than offset the cost of the hedge. Your dividend income will remain intact regardless of what happens, which is what dividend growth investors care about most.

    It seems that the common argument against hedging in the comments below is that "short-term unrealized capital losses in a long-term dividend portfolio are irrelevant". However, in the same breath you say that you are unwilling to hedge because it affects your potential unrealized capital gain (if stocks continue to rally).

    It's a little hypocritical to say that you care about the potential loss of capital gains, but you don't care about the potential for capital losses. In our opinion, you should care about both...and error on the side mitigating downside risk over and above trying to maximize capital gains...
    Feb 21 10:55 AM | 1 Like Like |Link to Comment
  • DIY Dividend Portfolio: Protection For A Correction [View article]
    Agreed, DVK - An investment plan should reflect the beliefs and goals of each individual investor. Sticking to that plan, whether it includes a hedging strategy or not, is the key to long-term success...
    Feb 21 10:32 AM | 1 Like Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 7b): Technology 'Buy Zones' [View article]
    For more information about our dividend stock ratings and "Buy Zone" reports, please visit our website:

    http://bit.ly/Kb3f0w
    Feb 20 09:33 AM | Likes Like |Link to Comment
  • DIY Dividend Portfolio: Protection For A Correction [View article]
    David - Thanks for the comments. We agree with most of what you have said above. We certainly aren't suggesting to liquidate your dividend portfolio over the possibility of a correction...we are just pointing out that a simple hedge will help you mitigate some potential downside risk (while keeping your dividend income fully in tact).

    We agree that buying the dips in great dividend stocks is a phenomenal long term plan. The core of our investment strategy is to identify good dividend stocks and patiently wait for low risk entry points. It sounds like you have done a great job of that historically.

    A hedge may not make sense for everyone, but it is one strategy that we use to mitigate downside risk...and the cost of protection is very cheap right now...
    Feb 19 05:13 PM | 4 Likes Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 7): Technology [View article]
    Stu - with all due respect..."6% with virtually no risk" doesn't exist...

    There is certainly risk...you may just be overlooking it. "Junk bonds" are yielding less than that right now...
    Feb 15 04:28 PM | Likes Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 7): Technology [View article]
    Hi Sean - Our 6% income target for our Model DIY Dividend Portfolio includes both dividend income and option income (from conservative option strategies like cash-secured puts and covered calls). We believe that it is much safer to supplement a stable, high-quality dividend portfolio with additional option income than it is to go out the risk curve in search of higher yielding stocks.

    That said, we do own some high-yield stocks (with yields over 6%) in our portfolio, but we limit our high yield concentration to 20% of our overall portfolio.

    Our weighted average target annual dividend yield for the portfolio is 4.0% and our target option income yield is 2.0%...which gets us to our total annual income target of 6.0%.

    We discussed this investment plan in more detail in Part 1 of the series:

    http://seekingalpha.co...
    Feb 15 11:23 AM | 1 Like Like |Link to Comment
  • The All-Defensive Team: 20 Low-Beta Dividend Stocks For Your Retirement Portfolio (Part 4) [View article]
    Great minds think alike, birder... :)
    Feb 15 08:17 AM | 1 Like Like |Link to Comment
  • The All-Defensive Team: 20 Low-Beta Dividend Stocks For Your Retirement Portfolio (Part 4) [View article]
    For more info about our dividend stock ratings and Buy Zone reports, please visit our website.

    http://bit.ly/Kb3f0w
    Feb 15 07:00 AM | Likes Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 7): Technology [View article]
    For more info about our dividend stock ratings and Buy Zone reports, please visit our website.

    http://bit.ly/Kb3f0w
    Feb 15 04:14 AM | Likes Like |Link to Comment
  • The All-Defensive Team: 20 Low-Beta Dividend Stocks For Your Retirement Portfolio (Part 2) [View article]
    Yes, HNZ investors are very happy this morning... :)
    Feb 14 11:41 AM | Likes Like |Link to Comment
  • The All-Defensive Team: 20 Low-Beta Dividend Stocks For Your Retirement Portfolio (Part 3) [View article]
    For more info about our dividend stock ratings and "Buy Zone" reports, please visit our website.

    http://bit.ly/Kb3f0w
    Feb 13 12:51 PM | Likes Like |Link to Comment
  • A Dividend Announcement Could Send Apple Shares Higher [View article]
    For more info about our dividend stock ratings and "Buy Zone" reports, please visit our website:

    http://bit.ly/Kb3f0w
    Feb 12 11:11 AM | Likes Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 6b): Financial Sector 'Buy Zones' [View article]
    Tevis - text is a misprint...chart is correct. We'll have SA fix it.
    Feb 12 10:52 AM | Likes Like |Link to Comment
  • Building A 6% Income Portfolio For 2013 (Part 6b): Financial Sector 'Buy Zones' [View article]
    For more info about our dividend stock ratings and "Buy Zone" reports, please visit our website:

    http://bit.ly/Kb3f0w
    Feb 12 08:25 AM | Likes Like |Link to Comment
  • The All-Defensive Team: 20 Low-Beta Dividend Stocks For Your Retirement Portfolio (Part 1) [View article]
    Well said, outcastsearcher! The rising tide has lifted all dividend stock boats since 2009...but that is not reality. There is definitely a reason why certain stocks carry a higher yield, and that risk will eventually rear its ugly head.

    Our 6% income target for our Model DIY Dividend Portfolio includes both dividend income and option income (from conservative option strategies like cash-secured puts and covered calls). We believe that it is much safer to supplement a stable, high-quality dividend portfolio with additional option income than it is to go out the risk curve in search of higher yielding stocks.

    That said, we do own some high-yield stocks (with yields over 6%) in our portfolio, but we limit our high yield concentration to 20% of our overall portfolio.

    Our weighted average target annual dividend yield for the portfolio is 4.0% and our target option income yield is 2.0%...which gets us to our total annual income target of 6.0%.
    Feb 10 11:56 AM | Likes Like |Link to Comment
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