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The Part-time Investor

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  • Stocks For 2014: Growth And Income Part 3 [View article]
    Best wishes to your family, Chuck. We'll still be here waiting for you when you get back.
    Jan 24 04:09 PM | 3 Likes Like |Link to Comment
  • My KISS Portfolio: 4th Quarter Update And Year End Review [View article]

    Thank you for reading my article and thank you for commenting.

    No, I don't wonder why some stocks look cheap in a bear market, because I would never be able to come up with a satisfactory answer. I am not an analyst. Instead I look at the actual performance of the company, in terms of its earnings history and its dividend history, and try to determine if (not why) the company is undervalued based on those histories. I look at facts. Not opinions or forecasts.

    The graph I am relying on, FAST Graphs, shows a price line in relationship to actual earnings that have already occurred. Not future earnings predictions. So, no, I'm not concerned with the graph making the stock look falsely undervalued. And I don't expect FAST Graphs to protect me from anything. It is a tool that can be used to make stock selections. How I use it is what matters.

    Finally, I'm sure that S&P did quite a bot of due diligence when it came up with its "A-" Quality Ranking for MSFT. I don't see any need to redo the work that they have already done, especially when they have the time and expertise to do it much better than I can. I'm sure the management of JNJ has done its due diligence about its own business prospects over the past 50 years as they have raised the dividend every single year, even through recessions, dot-com bubbles bursting, and financial meltdowns. If JNJ raises its dividend again in 2014, lets say by 8-12%, that tells me more than I could ever find out by doing my own independent "due diligence".

    I've said it before, and I will say it again. If you wish to spend hours a day doing "due diligence" on all the stocks you are interested in GO FOR IT! I wish you luck and I hope it works out for you. I hope your returns are better than mine. But I prefer to be a DGIer AND enjoy my free time doing non-stock related activities. My KISS system is what I have developed to try to make that happen. Only time will tell if it works. But so far, I'm very happy with the results.

    How is your system working for you?
    Jan 9 07:58 PM | 3 Likes Like |Link to Comment
  • My KISS Portfolio: 4th Quarter Update And Year End Review [View article]

    Thank you for reading my article and commenting. I'm glad you got something out of it. If I'm able to help other I'm happy. But I actually post my portfolio out of selfish motives. Putting down in writing my criteria and thought process helps to clarify it in my own mind. If I can't make it clear to other people then it must not be clear in my own mind. Secondly I get feedback from the wonderful people on SA who may point out errors I am making, and help me fix my method. So it's a win win situation. At least for those who like what I've done.
    Jan 9 09:43 AM | 3 Likes Like |Link to Comment
  • My KISS Portfolio: 4th Quarter Update And Year End Review [View article]

    If you are moving into DGI stocks why would you also move into ETFs? ETFs, even dividend paying ones, sometimes hold 100's of different stocks. Many of which you would never meet your criteria for purchase. Why would you chose to put those into your portfolio along with the individual stocks you carefully selected?
    Jan 9 09:31 AM | 3 Likes Like |Link to Comment
  • Boeing: 50% Dividend Hike Good, Buybacks Destroy 30% Of Shareholder Value [View article]

    "is unfortunate to see Boeing's management decide that $135 is a good price to start retiring stock."

    But as you said earlier Boing DID NOT start the buyback program this year, at a price of $135. It only added $1 billion to a program that was already in effect. And what if management said something like.."We are not going to continue our buyback program because the stock price is too high." Imagine what affect that would have on the stock price!

    Seems like they were just continuing the program without making any waves.

    But thank you for giving us something to think about. Dividends vs buybacks is always an interesting topic.
    Jan 3 06:08 PM | 3 Likes Like |Link to Comment
  • Value Can Still Be Found In This Market: 5 Examples [View article]

    Thank you for your comment. I just put in an order to buy more DE. I hope it works out for both of us!
    Jan 3 12:58 PM | 3 Likes Like |Link to Comment
  • Value Can Still Be Found In This Market: 5 Examples [View article]

    Just speaking for myself, I must disagree with you. I don't care why a company is undervalued. I just care that I am able to identify when one is, and act accordingly.
    Jan 3 12:57 PM | 3 Likes Like |Link to Comment
  • My DGI Plan: How I Keep Investing Simple [View article]

    Being in retirement that makes sense for you. I am still 15 years away from retirement, so there is no reason for me to be worrying about holding cash for expenses in case of a down turn. Since I am in the accumulation phase I feel it is my priority to try to maximize the growth of my portfolio. To me that means being 100% invested, thereby maximizing my dividend income.
    Jan 1 03:53 PM | 3 Likes Like |Link to Comment
  • My DGI Plan: How I Keep Investing Simple [View article]

    You are absolutely right. I should have made that point in the article. When evaluating MLPS, REITs and Utilities I do not take payout ratio into account. I look at the Chowder number (8 or higher), I look for a steady increase in Funds From Operations (FFO) instead of earnings (just as easily found on FAST Graphs), and I look for a stable DGR. Sorry I didn't include that info in the article.
    Dec 31 02:22 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investors Are Perhaps Doing It All Right [View article]

    Concerns like the ones you mention have been hanging over Altria for years. And yet it continues to increase its dividend year after year. Concerning KO (or any other stock) I don't try to predict the future. If KO's business suffers enough (for any reason) then eventually it will have to cut its dividend. And at that time I will sell. But until that time, as long as it continues to grow its dividend at an acceptable rate, I will continue to hold it. The same goes for each and every stock I own. The dividend will tell me what to do.
    Dec 15 03:42 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investing: A Better Way To Carry Out The 4% Rule [View article]

    My thought process in creating these two portfolios was not that the person inherited $1,000,000 and had to decide how to invest it. It was that the person had been investing for many years, and by the time they were ready to retire they had amassed $1 million. For the DGI portfolio they had been collecting and reinvesting dividends for years. On day one of retirement, for the first time, they began to withdraw the dividends, rather than reinvest them. For the G&V portfolio, for the first time, they began to sell shares.

    However, to address your concerns, I re-did my spreadsheet. I changed the process so that for the G&V portfolio the investor sold $3,333.33 worth of stock each month, for a total of $40,000 for the year. The amount sold increased each year by 3% due to inflation. For the DGI portfolio the investor withdrew $3,333.33 from dividends each month. This amount also increased by 3% each year. Once again, the G&V portfolio grew at an annual rate of 10%, while the DGI portfolio grew at an annual rate of 6%, and had a DGR of 6%. Here are the results at the end of 20 years:

    G&V: account value $3,574,645
    DGI: account value $3,767,636
    Total assets removed from both portfolios = $1,184,185

    Next I did the results for the two portfolios if they both suffered two down years during the 20 year period. I also changed the DGR for the DGI portfolio so that the dividends only grew 2% during the down years, rather than the 6% for all other years. Some argued that keeping the DGR at 6% during the down years made the comparison unfair. I still feel that in a well constructed portfolio the DGI portfolio's dividends will increase even during bear markets, but I dropped it to 2% to account for the weaker economic conditions.

    The results are as follows:

    G&V: account value $2,043,496
    DGI: account value $2,936,031
    Total assets removed from both portfolios = $1,184,185

    This, once again, shows that a few down years will have a far more negative affect on someone who has to sell assets to live, as compared to someone who lives off the dividends.

    I do not conclude that it is impossible to fund your retirement using a G&V philosophy. Only that it is much safer, more reliable, and more likely to succeed (and pass something on to your heirs) if you use a DGI philosophy.
    Dec 10 10:55 AM | 3 Likes Like |Link to Comment
  • Buy And Hold Is Dead You Say? [View article]

    My question is how would you know, before hand, which of those mutual funds would have returned 12-13%? B&H is a method that is known to work if you pick quality dividend growth companies, and you stay patient for 10-20-30 years. You don't know, before hand, which MFs will deliver good returns.
    Oct 24 07:06 PM | 3 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio 3rd Quarter Update [View article]

    You are absolutely correct. It is an assumption. But it is one I am comfortable with. (no one can predict the future, so aren't all investments, to some degree based on assumptions?) There will be times when the assumption turns out to be wrong, but I expect my diversification will help protect my portfolio from the damage when that occurs.
    Oct 16 06:14 PM | 3 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio 3rd Quarter Update [View article]
    I actually was torn as to whether or not to put actual values in my updates. But since I am trying to get the most constructive feed back I figured I need to put it all out there. Also, since I consider myself to be a student of Chowder, and he puts real values up on his Project Three Million blog, I figured why shouldn't I? I'm glad you enjoyed the article.
    Oct 15 12:04 AM | 3 Likes Like |Link to Comment
  • A New Retirement Portfolio [View article]

    Perhaps you're right. Fidelity was probably just doing what the entire industry does. Don't hate the player, hate the game. Right? Well the game cost my parents thousands of dollars. A DGI portfolio may be considered "high risk". But by putting them in safe, low risk, MFs it guaranteed that their returns would suffer, while at the same paying all the fees. I'll take the low risk of a secure dividend stock any day over the "low risk" of a professional money manager.
    Oct 14 10:27 PM | 3 Likes Like |Link to Comment