The Part-time Investor

Long only, long-term horizon, dividend investing, value
The Part-time Investor
Long only, long-term horizon, dividend investing, value
Contributor since: 2012
Company: Trading Cash Secured Puts
Thank you for your kind comments. I DRIP some of my dividends, the ones I receive in my Optionsxpress account. But I do not have DRIPing available for most of my stocks since Univest does not offer DRIP programs. At least not in my account. So for those I save up my dividends and reinvest them in the stocks of my choosing using my PAAY system.
Thanks for your question.
He's not going for alpha!!!! He's going for income. And his income has been far greater than the indexes, while still, at worst, matching, if not slightly beating, their total return. Seems pretty impressive to me.
3 years
If a company falls below BBB+ do you sell it?
Can you please remind me about how you use the S&P's credit rating to help you make decisions? Can you give some examples?
Why wouldn't they?
So wait, are Aliens more important than paper losses, or less???
"Something is only worth what someone else is willing to pay you for it."
Not necessarily. I could sell my MSFT stock right now for about $49.80 right now, but I will not do it. Because of the dividend stream I get from it MSFT is worth more to me. To me MSFT is worth more than $49.80. The market sets a price, but I don't have to agree on that price. It takes a buyer and a seller to both agree before a value is actually placed on something.
Also, the foul ball I got at a Mets game in the 80's (the only foul ball I ever got) is worth far more to me than anybody else in the world. It is actually pretty much worthless, according to your standarsd, because no one would be willing to pay me anything for it. But it would probably take an offer of hundreds, if not thousands of dollars, to get me to sell it.
Now if I could only remember where I put it. LOL
"To say they're not real because you didn't have to sell, completely overlooks the premise that you absolute could have been in a position where you did have to sell. For those that did, those losses were real."
But that is exactly the point I think RAS is making. For those who did have to sell It became a loss WHEN THEY SOLD. Had they not been forced to sell, like RAS and yourself, they would not have suffered a loss. It is the act of selling, when the price is down, that creates the loss.
Read the book a few years ago. Great read.
Great job Hilo!
I'm not familiar with SBuilder so I can't help you with that. I'm sorry. To evaluate valuation I use FASTGraphs. It is only $10 a month for a subscription and is well worth it. But you can use other websites. Morningstar and Valueline are two that I've heard mentioned by other SA contributors. You have the CCC list (for yield, Payout ratio and Chowder Number) and the S&P Quality Rankings, so those criteria are covered. You say SBuilder gives you a good earnings graph, so that is covered. So all you need is someway to evaluate valuation and you're set (at least to screen the same way I do. My way is not the only way). I would suggest you go to the website and watch the demo video. It will show you how much information is available and how to sue the graphs. If you like it get the basic subscription. If not then Morningstar or Valueline should work fine.
I collect my dividends as they come in and then manually reinvest them every quarter into the stocks that pass my PAAY screen,.
Thank you for that Paul. I will take a look at it.
And if you happen to get sick anywhere near me I promise I will get some of my much smarter colleagues to take a look at you. :-)
I will evaluate and re-evaluate until I feel a change is needed. No specific number. And it's not a number anyway. The best DGI portfolio will have dividend cuts. Learning how to deal with them it what matters.
You're absolutely right. An investment approach must be constantly evaluated to determine if it is achieving what you want. But a single dividend cut is not enough for me to change what I'm doing. It's going to take more than that to make me come to the conclusion that I need to change my approach.
After all those years of studying investing, the most important thing I've learned is that I DO NOT have the abilities of a financial analyst, and that the best thing for me to do is to focus on the dividends and dividend cuts. And those 65 articles are mostly about how I keep things simple, such as only using dividend cuts as my sole reason for selling. :-)
But until they cut the dividend KMI was doing exactly what I wanted it to do. Paying me my dividends. The fact that it was way down in price had no effect on what my portfolio was designed to do. Had KMI not cut its dividend, and managed to weather the storm, the price may have gone right back up. I can't predict what will happen with the price. The best I can do is react to dividend changes.
So I don't worry about a drop in price. I only worry about a cut in the dividend.
I understand what they are saying. I'm just pointing out how I look at it. As long as I still have all my shares, and those shares are still paying me my dividends, then I haven't lost anything, even if the stock price is down.
Sorry for the slow response.
Unfortunately I have no idea what the next 1-5 years will bring for dividend stocks. I wouldn't even consider telling you what kind of return you can expect. Beyond that I think FD gave you a good response.
The dividend numbers I posted are for dividends alone. Changes in stock price are not considered.
Keep reading as much as you can and learn from all the authors on SA. When you think you are ready, sit down and write out an investment plan. And then execute it.
Good luck.
Thanks for your comment. You make a good point that KMI was a newer company in its present form. But I bought it when it was KMP and I saw no reason to sell when the merger/re-organization occurred. Remember, my philosophy is to keep things simple. I'm not looking for reasons to sell a company that has been raising its dividend, and claimed it would continue to do so. Others who are better able to evaluate companies may chose to do so in situations like this and arrive at the decision that KMI, in it's new form, was not a suitable DG stock. But that is not what I choose to do. Waiting for an actual dividend cut is good enough for me.
I'm a physician, not a financial analyst. I WILL make mistakes. So it is essential that I use diversification to minimize the impact of those errors.
But you can't guarantee that the extra time you are talking about will definitely lead to extra gains.
The studies I'm aware of show the exact opposite of what your back tests have shown. Over the long term dividend growth stocks out perform all other types of stocks. Here is an article I wrote about it. I hope you will take look.
"many times under performance is a precursor to major troubles ahead"
And many times it is. Many times it's just the market under valuing a company. I try to use the dividend to tell me one from the other. If the company is still raising the dividend I figure there is a good chance that the stock price will eventually rebound. I never said under performing stocks are under valued. I said stocks with yields higher than usual MAY be undervalued. And that is what I look at when deciding how to reinvest my dividends.
"but you cannot have the best of both worlds,"
Unless by outperforming so much during down markets, even with some under performance in up markets, the overall performance is better.
It was a company decision for our retirement account to be with Univest. That is not something I have control over.
On the Pimco website all it says is DIVIDEND for the monthly .13 payout they give. Its possible that the .03 they paid out at the end of the year was return of capital, but I see nothing to that effect.
Thank you very much. Good luck with your investments and DGI.
But I never planned on selling KMI in my retirement to come up with those green fees or vacation expenses. The green fees would come from my dividends. Yes, I have to keep my eye on the ball, but that eye will be looking at the dividends I'm creating, not what is happening to my portfolio value.
I have to agree with RAS. The loss in that stock is (hopefully) a one time event, whereas the fees are paid year after year. Also, the loss from the stock is not guaranteed. Theoretically you bought stock stock looking for a gain. But the loss to fees is guaranteed.
"Just collect the dividends and invest in a company that is undervalued now"
That is what I do. I reinvest my dividends in the company of my choice, not DRIPing them back into the companies that pay them. Mainly I do this because DRIPing is not available to most of my portfolio, but I do feel that my way gives me some more control, and help minimize putting money into over valued stocks.
I'm surprised you fell for my head fake. You always seem to be a few steps ahead of me.