Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Craig,
Great first article! And your point is well taken. I would only say that, for me, I like to keep things simple. I'm not looking to analyze the thousands of stocks that pay dividends. By starting with the CCC list it limits the number of stock I have to consider and therefore makes my decision making easier. Will I miss some wonderful stocks? Of course. I don't expect to grab every great company out there. I just want a portfolio that has many of them.
As to your point about companies that may have held their dividend steady one year, thereby falling off the CCC list, but still have an excellent CAGR, I would argue that a board of directors that freezes a dividend one year, is more likely to freeze it again, or even cut it, in a future year. A company that raises its dividend year after year, through thick and thin, no matter what (even if just by a penny), shows a culture that will do everything it can to continue raising its dividend. Knowing that about my companies makes me feel more confident about my future dividend income and helps me sleep at night.
Once gain, thank you for a thought provoking article.
My K.I.S.S. Portfolio May 2013 Update [View article]
WC,
David Fish updates his Dividend Champions, Contenders and Challengers list every month. The list I used was the most recently updated list, which was updated on April 30th.
My K.I.S.S. Portfolio May 2013 Update [View article]
Apache,
I completely agree with you, especially since your commissions are $7. Even with my commissions being as low as 15 cents I choose to only reinvest in the 10 best valued stocks in my portfolio (base on their PAAY) during any particular quarter, rather then all 50+ in my portfolio. We must be reasonable. :-)
My K.I.S.S. Portfolio May 2013 Update [View article]
Wolf,
I would never consider telling someone else how to invest. I am happy to show what I am doing, and why, but that is what works for me, and not necessarily what will work for someone else. I am not an investment professional and I don't think it's appropriate for me to give advice.
That being said there are many authors on SA that you can learn from. I would start with Chowder and the wonderful instablogs he has written about his investment methods. I would also look at his Project 3 Million site (http://bit.ly/rBJkXG) which shows how he and his kids are investing their money. $100,000 is plenty to get started using dividend growth investing, and you can learn a lot from him I know I have. Besides Chowder I would also recommend articles by Tim McAleenan, Jr, David Van Knapp, Chuck Carnevale, Dividend Growth Investor and Dividend Growth Machine. Read their articles and read the comments to find even more authors who can help you. There is a wealth of information there to get you started.
My K.I.S.S. Portfolio May 2013 Update [View article]
Rob,
Thanks for the comment. My main goal is dividend income, so when constructing my portfolio protecting my income is essential. That is why I choose to hold more stocks, 50+, rather then less. The more stocks I hold the less likely that a dividend cut will hurt my income. I wrote an article about this back in January.
In terms of following them all, it is actually quite easy. Seeking Alpha sends me e-mails daily about all my stocks, and although I scan all the headlines, since the only criteria I have for selling is a dividend cut or freeze, all I have to look for is the dividend announcement from each company every quarter. One dividend announcement per company every three months is all I need to follow in order to monitor my portfolio.
I do plan on decreasing the amount of NLY I have, but only once I have found a suitable replacement. Any suggestions? Until then, even if NLY cuts it's dividend in half (unlikely) it will only decrease my income by about 5%. Not what i want, but still not horrible.
Finally, as to your point about just buying an ETF, I believe I am buying some of the best quality dividend growth stocks, so even if I hold as many as 100 of them (unlikely) I expect I will still do better then any of the many dividend ETF's. They don't have the same buying criteria that I have.
Are You Holding Overvalued Stocks And Wondering If It's Time To Sell? [View article]
Rich,
I completely agree with you. Thanks for saying what I was thinking. Investing in only your few best ideas works great if you are brilliant like Buffett, but is too risky for most of us. Diversification may get you to your goals slower, but it also decreases the chances of having any huge losses. Minimizing losses is an essential component in achieving wealth.
My K.I.S.S. Portfolio May 2013 Update [View article]
Bruce
It sometimes takes a while to collect enough cash to be able to buy 100 shares of any particular stock. I prefer to put the money I have to work almost immediately (quarterly) to start collecting my dividends. Since my commission costs are so low I am able to do so.
I know what you're saying about the medical profession, but since I'm still 15-20 years from retirement I'll have to put up with it. Hopefully I'll be successful with my investing and be able to retire a little sooner.
My K.I.S.S. Portfolio May 2013 Update [View article]
Larry and Apache,
Transaction costs are certainly a significant factor in an investors decision making. But so is the opportunity cost where someone does not collect dividends because they are waiting to invest while collecting enough cash to open a new position. This is a balance that every one must work out for themselves. As already mentioned my transaction costs are almost negligible, so I can come down on the side of putting my money to work almost immediately to start collecting more dividends.
That being said I still plan on only making my transactions quarterly, not because I'm waiting to have more money to invest, but because I want to Keep It Simple and only do this process every three months.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Great first article! And your point is well taken. I would only say that, for me, I like to keep things simple. I'm not looking to analyze the thousands of stocks that pay dividends. By starting with the CCC list it limits the number of stock I have to consider and therefore makes my decision making easier. Will I miss some wonderful stocks? Of course. I don't expect to grab every great company out there. I just want a portfolio that has many of them.
As to your point about companies that may have held their dividend steady one year, thereby falling off the CCC list, but still have an excellent CAGR, I would argue that a board of directors that freezes a dividend one year, is more likely to freeze it again, or even cut it, in a future year. A company that raises its dividend year after year, through thick and thin, no matter what (even if just by a penny), shows a culture that will do everything it can to continue raising its dividend. Knowing that about my companies makes me feel more confident about my future dividend income and helps me sleep at night.
Once gain, thank you for a thought provoking article.
My K.I.S.S. Portfolio May 2013 Update [View article]
David Fish updates his Dividend Champions, Contenders and Challengers list every month. The list I used was the most recently updated list, which was updated on April 30th.
My K.I.S.S. Portfolio May 2013 Update [View article]
My K.I.S.S. Portfolio May 2013 Update [View article]
Thank you. I'll look at this method as well.
My K.I.S.S. Portfolio May 2013 Update [View article]
I completely agree with you, especially since your commissions are $7. Even with my commissions being as low as 15 cents I choose to only reinvest in the 10 best valued stocks in my portfolio (base on their PAAY) during any particular quarter, rather then all 50+ in my portfolio. We must be reasonable. :-)
Thanks for commenting.
My K.I.S.S. Portfolio May 2013 Update [View article]
My K.I.S.S. Portfolio May 2013 Update [View article]
I would never consider telling someone else how to invest. I am happy to show what I am doing, and why, but that is what works for me, and not necessarily what will work for someone else. I am not an investment professional and I don't think it's appropriate for me to give advice.
That being said there are many authors on SA that you can learn from. I would start with Chowder and the wonderful instablogs he has written about his investment methods. I would also look at his Project 3 Million site (http://bit.ly/rBJkXG) which shows how he and his kids are investing their money. $100,000 is plenty to get started using dividend growth investing, and you can learn a lot from him I know I have. Besides Chowder I would also recommend articles by Tim McAleenan, Jr, David Van Knapp, Chuck Carnevale, Dividend Growth Investor and Dividend Growth Machine. Read their articles and read the comments to find even more authors who can help you. There is a wealth of information there to get you started.
Thanks for reading my article and Good Luck!
My K.I.S.S. Portfolio May 2013 Update [View article]
Thanks. I will look into it.
My K.I.S.S. Portfolio May 2013 Update [View article]
Thanks for the comment. My main goal is dividend income, so when constructing my portfolio protecting my income is essential. That is why I choose to hold more stocks, 50+, rather then less. The more stocks I hold the less likely that a dividend cut will hurt my income. I wrote an article about this back in January.
http://seekingalpha.co...
In terms of following them all, it is actually quite easy. Seeking Alpha sends me e-mails daily about all my stocks, and although I scan all the headlines, since the only criteria I have for selling is a dividend cut or freeze, all I have to look for is the dividend announcement from each company every quarter. One dividend announcement per company every three months is all I need to follow in order to monitor my portfolio.
I do plan on decreasing the amount of NLY I have, but only once I have found a suitable replacement. Any suggestions? Until then, even if NLY cuts it's dividend in half (unlikely) it will only decrease my income by about 5%. Not what i want, but still not horrible.
Finally, as to your point about just buying an ETF, I believe I am buying some of the best quality dividend growth stocks, so even if I hold as many as 100 of them (unlikely) I expect I will still do better then any of the many dividend ETF's. They don't have the same buying criteria that I have.
My K.I.S.S. Portfolio May 2013 Update [View article]
My K.I.S.S. Portfolio May 2013 Update [View article]
I totally agree. Thanks for the comment.
Are You Holding Overvalued Stocks And Wondering If It's Time To Sell? [View article]
I completely agree with you. Thanks for saying what I was thinking. Investing in only your few best ideas works great if you are brilliant like Buffett, but is too risky for most of us. Diversification may get you to your goals slower, but it also decreases the chances of having any huge losses. Minimizing losses is an essential component in achieving wealth.
My K.I.S.S. Portfolio May 2013 Update [View article]
It sometimes takes a while to collect enough cash to be able to buy 100 shares of any particular stock. I prefer to put the money I have to work almost immediately (quarterly) to start collecting my dividends. Since my commission costs are so low I am able to do so.
I know what you're saying about the medical profession, but since I'm still 15-20 years from retirement I'll have to put up with it. Hopefully I'll be successful with my investing and be able to retire a little sooner.
Thanks for your comment.
My K.I.S.S. Portfolio May 2013 Update [View article]
Transaction costs are certainly a significant factor in an investors decision making. But so is the opportunity cost where someone does not collect dividends because they are waiting to invest while collecting enough cash to open a new position. This is a balance that every one must work out for themselves. As already mentioned my transaction costs are almost negligible, so I can come down on the side of putting my money to work almost immediately to start collecting more dividends.
That being said I still plan on only making my transactions quarterly, not because I'm waiting to have more money to invest, but because I want to Keep It Simple and only do this process every three months.
My K.I.S.S. Portfolio May 2013 Update [View article]
Thanks for your comment and for reading my article.