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  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    I'm not recommending any of the following stocks, but from my understanding they are all pretty standard for long term portfolios and can give you an idea of where to look. If you go to each company's page on google finance, it has similar companies and the sector and industry links to find more similar companies.

    capital/durable goods- such as MMM and CAT;
    healthcare- JNJ and ABT
    more consumer, household- PG and KMB
    energy- XOM and COP

    Also, check out the U.S.Dividend Champions spreadsheet put together by David Fish http://bit.ly/aA8y3H .

    That should be enough to get you started. Again, I don't recommend you purchase any of the aforementioned stocks until you do your own analyses and determine they are each what you're looking for at the price you're looking for. Good luck!
    Nov 4 10:25 AM | 3 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    Jeff-

    You raise an interesting point that's been touched upon in earlier comments. Simply because the dividend yield has dropped, your income stream should remain untouched. I think the only way your YOC would decrease is if the company cuts its dividends (and then selling is certainly something to consider). But merely because the yield on the current market price is lower doesn't indicate a worse position for an owner.
    Nov 4 09:53 AM | 2 Likes Like |Link to Comment
  • 7 Best CEFs For The Income Investor's Portfolio [View article]
    I admit, I still didn't believe you, but I verified that you are correct- thanks for pointing it out. I was under the impression that if one's tax rate was 15% or lower, then capgains would be taxed at the same rate as the ordinary income. But if it's tax-free income, it would make a difference- another weight to put on the "hold" side. Thanks.
    Nov 4 09:47 AM | Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    SeattleMike- You'll probably hear this from smarter people than I, but I'll throw out my two cents. Or is it sense? Either way, Diversify a little more. I'm not saying to reallocate immediately, but future purchases should probably stay away from the financial sector and the tobacco industry (if not consumer non-cyclicals altogether).

    Other than that, I do like your choices. But my wife would never let us buy MO or PM. I'm not intending to set off an SA fire storm- I've seen it already, but she doesn't like the idea of owning of piece of those. But man, they seem like excellent options. I'm really into BAC. I think it's too big to bust, and then it's only a matter of time before it turns around, and it's dirt cheap right now.

    Good luck, and from one newcomer to another- welcome!
    Nov 3 11:30 PM | 2 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    David- No joke, I am interested in learning, basically about anything. That's how I stumbled upon SA, and I've been back to this sight almost often ever since. I say law and finance because these are two of my biggest interests at the moment, but I also assume there is no real legal or financial advice here; just friends sharing their ideas- exactly what I was looking for.

    Rodger- Without reading the books yet (I've added them to my list, though), I think I have the compounding in the example. For instance, 15% of $100, after a few months (not including any dividends I may earn while holding the position) would sell for $115. On the other hand, 4% yield on $100 over three years, compounded quarterly, yields $112.68 (of course, this assumes that all the repurchases are at an even $100). $115 today is better than $113 tomorrow, especially if I then put my new $15 to work for me immediately, and start the compounding higher earlier.
    Nov 3 11:12 PM | 1 Like Like |Link to Comment
  • 7 Best CEFs For The Income Investor's Portfolio [View article]
    Surfgeezer- thanks, that is an interesting way to look at it. Unfortunately, my holdings at this point wouldn't provide enough income to immediately dump into something else. It would require waiting several months, if not longer, to amass a sum worth buying a new position. But I do hear your point, and hopefully one day I'll be able to take advantage.
    Nov 3 11:02 PM | 1 Like Like |Link to Comment
  • 7 Best CEFs For The Income Investor's Portfolio [View article]
    Drdate- Just to clarify, do you mean long term capital gains are taxed at 10% or 0%?

    User- I like the way you bluntly put it, and I would guess you consider yourself an "investor." I certainly didn't think primarily about capgains when I purchased...
    Nov 3 11:00 PM | Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    Wow, I thank all of you for your thought out and prompt responses.

    I consider myself somewhere in the value/DG category, only purchasing (in the future- waiting for my cash to come through) stocks that I feel will be good companies to be a part of for the long haul. However, my thinking was, if I am earning 4% yield on a holding and the stock jumps 15%, that's over 3 years of earnings in one fell swoop. Essentially, then, I could sell out and wait an entire 3 years, if need be, before repurchasing the same stock at a similar price to what I originally purchased it for- if I don't find anything else better in the interim. I'm not concerned that I will come to sell low and buy high, because that goes against the foundation of my (developing) investing philosophy.

    I hear what you're all saying, and the point that rings loudest with me is- the quicker I sell out, the quicker I can miss the action. My response to that is, if I'm confident it's only market noise, there's good reason to believe it will come back down relatively soon. But then, I should only sell if it's actually market noise- otherwise I'd be throwing away a good holding bound to go higher- and who can ever be really sure that it's only noise.

    Thank you for your opinions- I appreciate the seasoned advice being passed my way.
    Nov 3 08:46 PM | 2 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    Does anyone feel comfortable giving a general rule? I have actually been thinking about this exact point the last few weeks (my investing career has only be a few months), and as I watch my holdings go up and down I wonder if it pays to sell out and wait for it to come back down. I feel confidant that I'm purchasing quality shares for the long term, but if some good news unreasonably runs up the market price- should I jump off the bandwagon? So, it would seem from this article that the consensus is, J-U-M-P! But the XOM example was more than 25% increase. What if it's a more modest increase, such as 15%, or 8% in a couple of months? What are all of your feelings' towards smaller capital gain opportunities?

    Thanks.
    Nov 3 06:57 PM | 3 Likes Like |Link to Comment
  • 7 Best CEFs For The Income Investor's Portfolio [View article]
    While you (sort of) bring it up, I've been thinking about the following for a little while and would like some outsiders perspectives on it:

    I'll give AWF as the example, but I'd be quite surprised if it wasn't true to some extent by most issues- AWF generally has traded between $12-15 for the last several years (excluding the recession). If I bought in towards the bottom of that (unfortunately I didn't, I got just under $14), and now it's trading at $14.50, or higher, would it make sense to sell off a large chunk, if not all of my holding, to take the capital gain, and then wait for it to come back down a little more to repurchase. Would this make me into a gambler/trader as opposed to the investor I aspire to be? More importantly, is this the financially prudent thing to do?

    For better or worse, the consideration of long- or short-term capital gains doesn't matter to me right now, although I'd welcome any responses bringing this aspect into their analysis.

    Thanks.
    Nov 3 04:39 PM | 1 Like Like |Link to Comment
  • 7 Best CEFs For The Income Investor's Portfolio [View article]
    As an investor in my twenties, this is indeed a concern, although I hope to be able to wait out any shrinkage that may come my holdings' way.

    However, as a retiree looking for current income, the theoretical loss of principle shouldn't really matter, except on an emotional level, or until one is required to sell.
    Nov 3 10:34 AM | 2 Likes Like |Link to Comment
  • Annaly Deleverages Its Portfolio To A Conservative Opportunistic Buyer Position [View article]
    RS and Zvi-

    Thanks for the quick answers. Do you consider this a bad thing, as it weakens your (the shareholders') stake, or a positive, in that presumably the company thinks it can use the money effectively?
    Nov 3 10:31 AM | Likes Like |Link to Comment
  • Use This Strategy To Avoid 'Gambling' In The Stock Market [View article]
    I'm not sure I understand your chart at the beginning of the article. My understanding of those models are that the inverse cross-sections should be equivalent. For example, if energy/utilities is .32, then utilities/energy should also be .32, not .10. Additionally, energry/energy should be 1 or n/a, not .23. How can something not be perfectly correlated to itself? Please help me understand what I'm missing. Thanks.
    Nov 3 10:20 AM | 1 Like Like |Link to Comment
  • Annaly Deleverages Its Portfolio To A Conservative Opportunistic Buyer Position [View article]
    What does "have a $1B secondary" mean? Thanks.
    Nov 3 10:05 AM | Likes Like |Link to Comment
  • Preferred Stock Investing: A Simple Guide To 7% Yield - Part 2 [View article]
    Jay-

    I would think that if you're thinking of going for a fund, you might as well go with one of the preferred ETFs, such as pff, pgf, or pgx (these are the three that I know off hand, but I think there are a few others), which have similar trading metrics (if that's the right word) to JNK and HYG, so that you capture the preferred class in your portfolio. It's technically a different asset class than bonds, and so for optimal diversification, you should spread across both.
    Oct 28 11:22 AM | Likes Like |Link to Comment
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