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Looking at retirement in 5 WEEKS or so- that's when the car will be paid off. Still working, but way behind on retirement savings and planning. Hope to share thoughts with folks in a similar spot.
  • YIAC Portfolio

    I am writing this post to describe my YIAC (yes, I am crazy) Portfolio after several requests and comments to postings I have made on various other SA articles. This portfolio is real money in my IRA at Scottrade, and everything I list I really do own. I have had this IRA since June of 2012 after I consolidated old 401, annuity, and IRA things hanging around. Since then I have put in another $7500 in IRS induced contributions. Once I discovered I could move money FROM a 401 INTO an IRA (being over 59 and 1/2), I moved almost 30K into the same IRA. In all, my basis is around $65000.

    When I consolidated all this stuff, I set out to build a money barrel that I could open the spigot when I retired and use the income stream to supplement Social Security. Therefore, I decided to become a yield chaser. GASP! Now that that's out of the way, I look at high yield stuff as new money, the stuff financial empires are built from. Initially I thought I'd buy more conservative stuff with the dividends, but I kinda changed my mind mid stream, and adopted a "let's roll with it" approach. I figured why not compound as long as the yield was up, and my targets changed.

    I think from here the best way to go is to show what I have and then post when I do something. There are other things I have which are not high yield, but swings and misses looking for a home run (TNXP, EGRX, ATHX, KMI/WS) which I hope will come later. I also have some money in UVXY (100 shares) where I have sell orders for 50 shares each at $10.00 over my purchase prices.

    Next I'll list what I currently own in the high yield department. The data will be a snapshot, not a movie, and are what I had as of close Friday, 4/25.

    Ticker AVG. Cost/sh Price/sh #Sh YTD Div

    AI $26.17 $25.73 236 (4/30)

    BDCL $28.99 $26.04 300 $1068.54

    CEFL $26.39 $27.65 381 $419.02

    MORL $19.10 $21.54 300 $327.60

    NYMT $7.39 $7.38 839 $220.59

    OAKS $11.17 $11.54 532 $61.88

    ORC $12.86 $12.23 767 $174.06

    PSEC $11.24 $10.94 928 $772.51

    The portfolio does change over time. For example, I am back in MORL, but I sold when I saw so many components cutting their dividends. At one point I had almost 40% of the portfolio in PSEC, but felt that was too much in one spot, so I looked around for other monthly pay stuff, and bought some ORC and OAKS, than picked up CEFL and DVHL. I have since sold all the DVHL because the yield wasn't what I wanted, and I felt I could do better than 11%. I have about $10K in cash at the moment, but that won't last long because cash doesn't pay anything. I'll probably pick up some more BDCL because I think the drop is for the wrong reasons, so I see it as a buying opportunity. I also buy more shares when secondaries are offered (ORC for example). Another big element of this growth is Scottrade's FRIP program, so I reinvest the dividends without commission where I want to. When NTMT paid their dividend Friday, I used it to buy 20 more shares of OAKS. Another thing I do sometimes is sell a bit of what I have to buy something else I see as attractive. I sold some of my BDCL and used it to buy the CEFL back in January. I think the monthly pay aspect allows you to take advantage of buying opportunities more often.

    By the end of April, three more dividends will be paid (AI, ORC, and OAKS) which will be another $400 added to the total, bringing the YTD total of dividends and interest to a bit over $4900. This includes stuff I don't own any more, like WMC and DVHL, but is the YTD total on my Scottrade account for all dividends and all interest (except the cash account's six cents or whatever). It also includes the stock WMC paid as dividend when they did their special back in January.

    I read articles and comments every day so I can try to keep on top of things. I know interest rates will eventually start going up, but they haven't yet. When they do, some of what I hold will be able to adjust accordingly, and probably some won't, but we'll just have to see what happens then. In the mean time, I'll keep buying more of what I have.

    New Activity:

    Sold DVHL 4/25

    Bought 50 UVXY 4/28

    April 29:

    Bought 100 AI

    Bought 50 BDCL

    Bought 35 CEFL

    Bought 50 MORL

    Bought 100 OAKS also programmed 6 sh in FRIP

    Totals for April:


    MORL: $303.87 BDCL: $315.27

    CEFL: $219.82 NYMT: $220.59

    DVHL: $146.41 (sold) AI: $206.50

    ORC: $138.06

    PSEC: $102.43

    OAKS: $ 64.13

    $670.10 in interest and $1046.98 in dividends- $1717.08

    Some new stuff in May:

    On 5/8 I sold 50 shares of BDCL and 50 of BDCL so I could buy 200 more PSEC with the over-reaction price drop, and another 60 of CEFL.

    I had been picking up little bits of UVXY as the vix dropped, but this morning (5/12) I sold off 150 shares, leaving me 100. With the proceeds I bought 200 NYMT, 100 CEFL, and 220 ORC.

    Haven't decided yet what to buy in the DRIP, but I'm thinking some more AI. I also like RSO because it focuses on commercial investments instead of residential plus the rate is higher.

    Disclosure: I am long AI, BDCL, CEFL, MORL, NYMT, OAKS, ORC, PSEC.

    Apr 28 8:30 AM | Link | 8 Comments
  • Flexible DRIP Plan

    Just thought I'd pass this along for some consideration. Scottrade has a "FRIP" plan going which sounds really good. You enroll your dividend stocks/ETFs into the plan, and all the dividends are pooled. From this point you can chose up to 5 marginable stocks/ETF issues you want to reinvest the dividends into, and chose at what percentage. You could pool dividends from mREITs and "FRIP" them into 5 biotechs or anything else you want. You don't have to reinvest the dividends back into the company that paid them, and all your reinvesting is done commission free as long as it's within the program. The only drawback is you can't buy fractional shares, so I'll be dirt napping before I ever get any Berkshire Hathaway. You can reinvest monthly or quarterly, and stop any or all dividends from being pooled, and then the dividends will go into the money market like they do now. You can't put any money into the pool- you have to wait for the dividends to be paid, but after that it'd be pretty much self sustaining.

    So you see, now you can take from Peter and pay Paul.

    May 31 7:55 PM | Link | 4 Comments
  • Getting A Roth 401k

    We (the 401k Committee) will be meeting the 23rd of April to discuss adding a Roth version of our current 401k. The plan does indeed allow for a Roth version, and I've begun to investigate what the problems might be with the plan set-up. Individual tax strategies are way too complex to cover everything, and there are plenty of "Roth vs traditional" 401k articles already written, and lots of on line calculators for figuring out which is best for you. I'm looking to add that component to my retirement pie so I have even more options. I do like back-up plans, and as that ancient proverb I made up this morning goes: Nobody ever retired with too much money. Regardless of what the plan will ultimately offer, I'd plan on rolling it into my Roth IRA when I retire to avoid some of the required withdrawals at 70 and a half and be able to structure the holdings according to what I need.

    So far the only ointment fly I found is the company match angle. Since the company component is always taxable because we never see it, it looks like 2 sister plans would be the best- contribute to the traditional 401 up to the company match, and then balance of contribution with no match into the Roth. Otherwise there will be a taxable component to your "tax free" distribution (the company match), and in addition to back up plans, I like things not very complicated, and I'm going to guess that the simpler the plan is, the better the administrator will like it.

    Is anybody aware of any other pitfalls with the plan set up? Any "look out fors" or "be careful ofs"? I'd love to be on top of the plan construction aspect of this, so if you have experience or are aware of how I might avoid successfully shooting myself in the foot, please let me know.


    Mar 31 7:56 AM | Link | Comment!
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