I agree with those who say some caution is warranted with tobacco companies - many headwinds and things beyond their control. I hedge these risks by holding half instead of full positions, and reinvesting the generous dividends elsewhere.
Maybe not "core" in a DG (or any) portfolio, but they do serve a useful purpose.
Count me as another recent DGI convert, due to the inspiring and eminently practical articles and comments from you and the other DG "giants" here on SA.
DGI is clear and logical and made sense to me from the start, unlike just about everything else in the world of high finance. I'd been investing for 25 years but discovered SA only about 18 months ago, and began transitioning our portfolio to DG stocks less than a year ago. The results are nothing short of astounding! And I don't mean the total value, which of course has been fantastic in this bull market. I mean the tangible and visibly rising income in my pocket every month -- or, more accurately, in my accounts, as I'm still about a year away from needing to use it. So compounding those divy's as much as I can until then.
Thank you for all you do. I hope you're not planning to disappear anytime soon! I'm still on the steep part of the learning curve, need all the good advice I can get. :)
As others have said, I hope one day to be in a position to "give back" by sharing my own DG investing experiences (good and bad) with newer investors. I only hope I can measure up!
"If I have seen further it is by standing on the shoulders of giants." - Isaac Newton
Conservative Dividend Investors Have 3 Options Right Now [View article]
Great comment, Chowder, and I couldn't agree more.
When I realized several weeks ago that my bond funds had just contributed another $500 DECREASE to my portfolio's annual income stream, I liquidated yet another fund and used the proceeds in the past two weeks to "top off" positions in MCD, SJR, APD, BAX, SO, AVA, BX, and GE. None significantly undervalued at present (bought on mini-dips) but not overvalued either. So while my basis went up, so did the amount and stability of my income.
Still keeping some cash on the sidelines for the expected correction, but not hesitating to " average up" with quality companies to lock in a little more income either.
FWIW, I've stopped tracking the 5/10 ratio completely, as I'm more interested in consistency (within a historical range) for my DG holdings.
So I look at the last 5 consecutive changes, along with the 3, 5 and 10-year average DGR's, recognizing (per RAS "bumpiness" metric) just now misleading those averages can be. Doubly so for my foreign holdings (VOD, UL and the like), where there are both currency fluctuations and different dividend growth patterns at play.
How Can One Trade Be Both Good For Me And Bad For Me? [View article]
Robert,
Your honesty and courage in sharing what in retrospect may not have been, for you, the best ever trade (and who among us has NOT been there??) makes you, IMHO, a candidate for the SA DGI Hall of Fame! Add to that the constructive yet supportive comments and the overall civility of the discourse, and it's hard to argue that this is one of the most useful and informative streams on SA in quite a while. Right up there with your many wise comments and those of DGI proponents Chowder, DVK, Chuck Carnevale, Richjoy, Tim M, and the other frequent contributors. More than an education - shared freely, warts and all.
While I can't add much to the otherwise excellent comments, advice, and examples in this stream, I would like to echo that we are ALL learning, and that there is no "one right way", but many ways to achieve what, in the end, are the goals most meaningful to each of us. No one here is perfect, or 100% immune from emotional responses to Mr. Market, despite the rules and constricts we attempt to put in place to guide our decisions. So thanks for showing that even the best and brightest on SA are only human. :) I know I feel a lot better reading this string of comments about my own "sub-optimal trades" (PBI, EXC, FTE to name just a few recent ones...!).
Hopefully, as I gain investing experience and keep learning from this forum and community, the mistakes will be fewer... or at least different. :)
Dividend Growth - A Very Useful Distraction? [View article]
Hi, Cranky, There have been many discussions here on SA on the relative merits of DGI vs Total Return investing - kudos to you for your the effort here to discuss both.
I was a Total Return investor for 25 years - mostly because I didn't understand the power dividend growth stocks. And especially dividend growth compounding. Total returns grow but they don't compound. I did fine in terms of accumulating a sufficient asset base to generate (now) a reasonable and growing dividend income stream, but part of me wonders just how much I left on the table by missing years of opportunity to reinvest dividends which would themselves then have compounded via their DGR's.
With large caps, one could debate the two alternatives until the cows come home - as everyone here already has on SA. :) An interesting and new point you make here, though, is around small caps. As small caps often pay small or no dividends, or pay them but don't grow them regularly or predictably, that does seem like an opportunity that's probably missing from most DGI portfolios during the accumulation phase.
Like many, I used small cap mutual funds for this purpose during accumulation. That was all that was available in my 401(k) and I had neither time nor expertise to do the necessary legwork (given the risk) for our taxable accounts. While they did provide a boost to my total return, most of them carried pretty hefty fees. Of course, now there are some decent ETFs which serve the same purpose.
Dividend Growth And Me, An Anniversary Story [View article]
Mike,
Add me to the list of your followers who really enjoyed this article. Theory is great (and I mean that sincerely, just recently purchased & am carefully reading Lowell Miller's "The Single Best Investment") but to see it in practice is something special indeed.
I've been on a similar timeline, not quite a year transforming our multiple IRA's, my 401(k) and two brokerage accounts into a robust DGR portfolio. What a journey - and way more fun than I ever imagined. It can become obsessive, so I liked your reminder about making time for other pursuits, too. :)
Survey Says... These Are Dividend Growth Investors' Most Widely Held Stocks [View article]
The wisdom of crowds! Great info; even "anecdotally" it's powerful, as the DGI-ers on SA seem so disciplined and rigorous when it comes to conducting due diligence and debating nuances.
Happy to say I own about 80% of the stocks listed (although not all at the weightings I would like), and they have performed well on the key metric that matters for me: a reliable, growing income stream to replace what I earned in my day job. Many of the other stocks noted are on my Watch List (or I have acceptable substitutes in those sectors).
Many thanks, Dave, for compiling this and sharing. Worth the read!
General Electric: The Hazards Of A Perfect Stock Even After Solid Earnings [View article]
Good article, thought provoking comments.
GE is a conundrum. Iconic, yet hard to love. Complex and poorly managed, yet successful in so many of their businesses, Without a doubt operate one of the most ubiquitous entities on the planet. Seem to touch on just about everything under the sun. Good & bad...wide moat, little focus.
The earnings report was classic GE yin and yang. Met (beat?) the Street (good) - helped by "financial engineering" (bad). Maintained 2013 guidance (good), but getting there via cost-cutting vs. sales growth (bad). Maybe not so surprising that after a bad end of week Friday, the price took another hit today after a better peek under the hood.
Long GE (in at $18, with a 3/4 position) and will hold - but not adding. Not really a SWAN stock and simply not worth the angst to me.
Why Yield On Cost Matters To Long Term Investors [View article]
Tim,
Very interesting article and you seem to have touched a nerve based on the strong opinions in the commentary. Seems like your readers are very black or white on the topic of YOC - they either love or hate it.
I wonder if it would generate the same types of responses if it were likened to "unrealized gain/loss". Isn't that essentially what YOC is measuring? (Except on dividend rate vs price.) Or am I completely misunderstanding how YOC is calculated?
The Trend Is Your Friend [View instapost]
Long: PEP
emac
If You Must Invest In Tobacco [View article]
Maybe not "core" in a DG (or any) portfolio, but they do serve a useful purpose.
Long: PM, LO
Why I Am A DG Investor [View instapost]
Count me as another recent DGI convert, due to the inspiring and eminently practical articles and comments from you and the other DG "giants" here on SA.
DGI is clear and logical and made sense to me from the start, unlike just about everything else in the world of high finance. I'd been investing for 25 years but discovered SA only about 18 months ago, and began transitioning our portfolio to DG stocks less than a year ago. The results are nothing short of astounding! And I don't mean the total value, which of course has been fantastic in this bull market. I mean the tangible and visibly rising income in my pocket every month -- or, more accurately, in my accounts, as I'm still about a year away from needing to use it. So compounding those divy's as much as I can until then.
Thank you for all you do. I hope you're not planning to disappear anytime soon! I'm still on the steep part of the learning curve, need all the good advice I can get. :)
As others have said, I hope one day to be in a position to "give back" by sharing my own DG investing experiences (good and bad) with newer investors. I only hope I can measure up!
"If I have seen further it is by standing on the shoulders of giants." - Isaac Newton
emac
Conservative Dividend Investors Have 3 Options Right Now [View article]
When I realized several weeks ago that my bond funds had just contributed another $500 DECREASE to my portfolio's annual income stream, I liquidated yet another fund and used the proceeds in the past two weeks to "top off" positions in MCD, SJR, APD, BAX, SO, AVA, BX, and GE. None significantly undervalued at present (bought on mini-dips) but not overvalued either. So while my basis went up, so did the amount and stability of my income.
Still keeping some cash on the sidelines for the expected correction, but not hesitating to " average up" with quality companies to lock in a little more income either.
emac
How Can One Trade Be Both Good For Me And Bad For Me? [View article]
Yes, "greed management" (or lack thereof) just about sums it up for me, too, with those three. I'm out of them all now, but stayed in WAY too long.
Guess I forgot the Buffet mantra about being fearful when others are greedy. Especially when I was the "others". :)
emac
What Does A Big Market Correction Actually Look Like? [View article]
User,
That's the best and most succinct description of GE I've seen in a long time. Thanks for the smile. :)
Long GE (but not adding).
emac
Dividend Champions For May 2013 [View article]
So I look at the last 5 consecutive changes, along with the 3, 5 and 10-year average DGR's, recognizing (per RAS "bumpiness" metric) just now misleading those averages can be. Doubly so for my foreign holdings (VOD, UL and the like), where there are both currency fluctuations and different dividend growth patterns at play.
emac
How Can One Trade Be Both Good For Me And Bad For Me? [View article]
Your honesty and courage in sharing what in retrospect may not have been, for you, the best ever trade (and who among us has NOT been there??) makes you, IMHO, a candidate for the SA DGI Hall of Fame! Add to that the constructive yet supportive comments and the overall civility of the discourse, and it's hard to argue that this is one of the most useful and informative streams on SA in quite a while. Right up there with your many wise comments and those of DGI proponents Chowder, DVK, Chuck Carnevale, Richjoy, Tim M, and the other frequent contributors. More than an education - shared freely, warts and all.
While I can't add much to the otherwise excellent comments, advice, and examples in this stream, I would like to echo that we are ALL learning, and that there is no "one right way", but many ways to achieve what, in the end, are the goals most meaningful to each of us. No one here is perfect, or 100% immune from emotional responses to Mr. Market, despite the rules and constricts we attempt to put in place to guide our decisions. So thanks for showing that even the best and brightest on SA are only human. :) I know I feel a lot better reading this string of comments about my own "sub-optimal trades" (PBI, EXC, FTE to name just a few recent ones...!).
Hopefully, as I gain investing experience and keep learning from this forum and community, the mistakes will be fewer... or at least different. :)
emac
Dividend Growth - A Very Useful Distraction? [View article]
There have been many discussions here on SA on the relative merits of DGI vs Total Return investing - kudos to you for your the effort here to discuss both.
I was a Total Return investor for 25 years - mostly because I didn't understand the power dividend growth stocks. And especially dividend growth compounding. Total returns grow but they don't compound. I did fine in terms of accumulating a sufficient asset base to generate (now) a reasonable and growing dividend income stream, but part of me wonders just how much I left on the table by missing years of opportunity to reinvest dividends which would themselves then have compounded via their DGR's.
With large caps, one could debate the two alternatives until the cows come home - as everyone here already has on SA. :) An interesting and new point you make here, though, is around small caps. As small caps often pay small or no dividends, or pay them but don't grow them regularly or predictably, that does seem like an opportunity that's probably missing from most DGI portfolios during the accumulation phase.
Like many, I used small cap mutual funds for this purpose during accumulation. That was all that was available in my 401(k) and I had neither time nor expertise to do the necessary legwork (given the risk) for our taxable accounts. While they did provide a boost to my total return, most of them carried pretty hefty fees. Of course, now there are some decent ETFs which serve the same purpose.
Anyway, thanks for a good article.
emac
Dividend Growth And Me, An Anniversary Story [View article]
Add me to the list of your followers who really enjoyed this article. Theory is great (and I mean that sincerely, just recently purchased & am carefully reading Lowell Miller's "The Single Best Investment") but to see it in practice is something special indeed.
I've been on a similar timeline, not quite a year transforming our multiple IRA's, my 401(k) and two brokerage accounts into a robust DGR portfolio. What a journey - and way more fun than I ever imagined. It can become obsessive, so I liked your reminder about making time for other pursuits, too. :)
Keep up the great work. It's greatly appreciated!
emac
Survey Says... These Are Dividend Growth Investors' Most Widely Held Stocks [View article]
Happy to say I own about 80% of the stocks listed (although not all at the weightings I would like), and they have performed well on the key metric that matters for me: a reliable, growing income stream to replace what I earned in my day job. Many of the other stocks noted are on my Watch List (or I have acceptable substitutes in those sectors).
Many thanks, Dave, for compiling this and sharing. Worth the read!
emac
General Electric: The Hazards Of A Perfect Stock Even After Solid Earnings [View article]
GE is a conundrum. Iconic, yet hard to love. Complex and poorly managed, yet successful in so many of their businesses, Without a doubt operate one of the most ubiquitous entities on the planet. Seem to touch on just about everything under the sun. Good & bad...wide moat, little focus.
The earnings report was classic GE yin and yang. Met (beat?) the Street (good) - helped by "financial engineering" (bad). Maintained 2013 guidance (good), but getting there via cost-cutting vs. sales growth (bad). Maybe not so surprising that after a bad end of week Friday, the price took another hit today after a better peek under the hood.
Long GE (in at $18, with a 3/4 position) and will hold - but not adding. Not really a SWAN stock and simply not worth the angst to me.
emac
Why Yield On Cost Matters To Long Term Investors [View article]
HM,
Ah, OK, thanks, I see the difference.
emac
Why Yield On Cost Matters To Long Term Investors [View article]
Very interesting article and you seem to have touched a nerve based on the strong opinions in the commentary. Seems like your readers are very black or white on the topic of YOC - they either love or hate it.
I wonder if it would generate the same types of responses if it were likened to "unrealized gain/loss". Isn't that essentially what YOC is measuring? (Except on dividend rate vs price.) Or am I completely misunderstanding how YOC is calculated?
Thanks!
emac
What Stocks Are Most Commonly Held By Dividend Growth Investors? [View article]
Stocks on your list that I DON'T own: ABT (sold), MO (sold), ADP, CB, CINF (sold), CL, EXC (sold), XOM, PAYX, PFE, TGT, UTX.
Stocks NOT on your list that I own: APD, AVA, BAX, BCE, BMO, BNS, COP, D, DRI, EPD, GE, GIS, KMP, KRFT, LNT, LO, MMP, NGG, NNN, O, PAA, RCI, SJR, VOD, VVC, WBK & WEC.
emac