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The Part-time Investor

 
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  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    B-H-R,

    I expect to be 100% invested in stocks, specifically dividend growth stocks, for the rest of my life. I will also try to maximize my dividend income, with the caveat that it comes from quality companies. (I will not go for riskier companies just to get a higher yield.) I always want all of my money producing income for me, and the best way I know how to do that is by going for the combination of dividends and growth that DGI stocks give me.
    Oct 1 02:53 PM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Cooper,

    Well, it won't be done on any specific day. It will be a transition over a couple years I expect. But for now I'm willing to let earning growth, dividend growth, and compounding work for me. Plus, there are no CD's paying 6% right now.
    Oct 1 10:42 AM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    TRI,

    Glad I could help! What else is on your list? lets get rid of them all.
    Sep 30 06:43 PM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Cooper,

    Wait 15 years for what?
    Sep 30 06:42 PM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Lets hope we don't get to that point. I think the Fed has a pretty good handle on how to control interest rates.
    Sep 30 02:36 PM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    bg,

    I won't get spooked by anything. If my stocks keep giving me dividend raises year after year (Lockheed Martin just gave me a 12.5% raise a few days ago!) then I will stick with them. No worries.

    Although I must say if there are CD's paying 20% I'l be backing up the truck to get me some of that!
    Sep 30 02:35 PM | 1 Like Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    B-H-R,

    Mostly I'll let Chowder's answer stand, but I'll also add that most studies show that dividend growth stocks out perform the market over the long run. So I expect my DGI portfolio to beat the S&P over the next 15 years. Now I may not be able to beat someone picking individual growth stocks, if they are really good at it, but they will put a lot more time and effort into it than I will (I am a part-time investor, after all), and my portfolio will give me all I need with much less volatility.
    Sep 30 02:33 PM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Chowder,

    If I am in retirement I'll take that 8% as well. I'll be right behind you!
    Sep 30 02:28 PM | 1 Like Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    FD,

    I agree that in retirement people would be more likely to switch to CD's paying 6% then stay with DGI stocks. But as I am still 15+ years from retirement I still have time for dividend reinvestment and compounding to work for me. Even if my capital appreciation lags the market for a little while eventually I believe I will come out ahead. And most importantly I will produce all the income I need.

    Different people in different situation certainly will respond differently to whatever conditions occur when rates start to go back up. Just speaking for myself, after doing this study, I will be staying in my DGI stocks, and will still sleep quite comfortably.

    Concerning your last statement, I don't expect to ever have to sell any of my stocks (although I may CHOOSE to do so). I am setting up my portfolio so that when I retire my dividends will cover all my expenses.
    Sep 30 02:27 PM | 1 Like Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    B-H-R,

    I like your user name. And thank you for giving my article your first few comments. I'm honored.

    I agree that dividend stocks may underperform during periods when rates are rising, at least on a capital gains basis, but I still think they will increase in price as long as their dividends keep increasing. So my portfolio will still go up in value. And even if they lag the market a bit I will still be collecting, and reinvesting, all that income. And I am first and foremost an income investor.
    Sep 30 02:20 PM | 1 Like Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    B-H-R,

    I don't predict things. I'm not smart enough. If their dividend keeps increasing then their business must be doing OK. So I just let the dividends tell me what to do.
    Sep 30 02:15 PM | 1 Like Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Eric,

    Thanks for reading and commenting. I know I'll be buying KO like crazy if its yield starts approaching 3.7%. I can't believe that the market would ever let it get that high. So yes, I believe the prices DGI stocks will continue to increase along with the dividend growth, even if interest rates begin to rise.
    Sep 30 10:52 AM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    SDS,

    Thanks for that link showing that there are more cuts during times of falling rates. I guess this once again shows that it is the weak economic times we should be most worried about, not the strong. The graph at the bottom of your article shows a clear correlation between recessions and cuts. Nicely done.
    Sep 30 10:20 AM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Thank you Cooper.
    Sep 30 10:03 AM | Likes Like |Link to Comment
  • The Effect Of Rising Interest Rates On My Portfolio [View article]
    Gary,

    I agree that another recession is more of a concern than rising rates. And congress is always a concern! But through it all, as long as DGI stocks continue to raise their dividends, in the end they (and I) will be fine.

    So many things out there for us to worry about, but very few that we can control. So I'll just control what I can and let the dividends and compounding work their magic.

    Thanks for commenting.
    Sep 30 09:42 AM | 1 Like Like |Link to Comment
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