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  • Dividend Impact Of Kinder Morgan Purchase - IF Dividends Matter To YOU [View article]
    It doesn't. UBTI applies to Roth or traditional IRA as it does a taxable account. Calculation is complex, includes recapture of various expense deductions since original purchase, offset by passive losses not taken. And the UBTI $1K exclusion applies to all MLPs in the account, not just KMP.

    The IRA may indeed owe taxes and need to file a return. I'd consult the custodian as well as a CPA.


    Long: KMP in both taxable account and IRA
    Aug 18 09:10 PM | 7 Likes Like |Link to Comment
  • Our Retirement Portfolio Business Plan - Legacy Edition - Part Two [View article]

    Loved your comment and the 4 questions, too.

    The only one I'd modify is #2. Instead of, does the trade "Diversify the portfolio?", for me it would be, does the trade "Better concentrate or diversify the portfolio?" Depending on the age and maturity of one's portfolio, it may already be adequately diversified - or too much so.

    I'm probably overly sensitive to the risk of "di-worsification," as I currently hold too many positions and am looking to reduce.

    Otherwise, love it, and like Bob, I'm printing this out for future reference!

    Aug 17 07:20 PM | 1 Like Like |Link to Comment
  • Build A 'Whatever Happens' Portfolio... Now [View article]

    Thank you for your comment. My reaction to this article was the same as yours.

    The article more or less looks like our IRA and brokerage accounts before I exited the plethora of funds with their attendant fees, capital gains/losses and taxes. Too complex, too expensive, and only mediocre results, despite being recommended by respected financial advisers. Some of their choices made no sense to me. Why equity funds with hundreds of holdings, including many highly volatile, underperforming stocks? How are bonds a good hedge now, when they seem to protect against neither interest rate risk nor price risk nor inflation?

    Now, I manage it myself, using an approach very much like what you lay out in your comment. To my surprise, in addition to saving (literally) many thousands per year on fees, it not complicated or time-consuming to monitor and administer, once I set it up.

    At present, 8% cash (awaiting some better stock valuations), 7% bonds (only a couple investment grade corporate and tax free muni ETFs; Social Security - one current, one future - serves as fixed income proxy); 85% of the portfolio is a well-diversified mix of US and foreign large cap equities (mostly dividend growth), a few eREITs and pipeline MLPs, and one international mid-cap fund.

    My one-page portfolio business plan outlines goals and metrics around our income and growth requirements, risk criteria, and buy/sell guidelines. Portfolio is not only performing better on absolute and relative bases, but is more transparent, tax efficient, and flexible for our needs and investing style.

    Your list is great. Just wish I'd started down that path a lot sooner!

    Aug 17 06:51 PM | 3 Likes Like |Link to Comment
  • Our Retirement Portfolio Business Plan - Legacy Edition - Part Two [View article]

    Yes, indeed - it all starts with The Plan!

    Thanks for your tireless emphasis on the SDI's need for a Portfolio Business Plan, as well as generously sharing the evolution of the Wells Family Retirement Income Portfolio. While it seems perfectly logical to put guidelines and structure around one's investing approach (given what's at stake), I'm shocked at how few people actually do so.

    My original plan mirrored yours, but has since been customized to reflect my risk/return preferences, investing style, and goals. The more I learn and do, the less often I need to refer to it, but there's great comfort in knowing it's there. And of course it's hugely valuable for those wondering what the heck I've been doing since we "unhired" our financial adviser. :)

    Still giving thought to the Legacy Edition and what that means in our family. Not an obvious successor with the skills and interest to take this over, so it's going to need to be a lot simpler. But at least the foundation is in place and running smoothly.

    Thanks for all you do here on SA! Keep 'em coming.

    Aug 15 05:30 PM | 6 Likes Like |Link to Comment
  • Dividends Matter If They Matter To You [View article]

    So much wisdom, sanity and just plain reasonableness here. Which is why you were the first SA author I followed, and remain among the great advisers and teachers I've discovered since who gave me the confidence to become a SDI.

    I'm not close-minded. I want to read, learn, question and be challenged. I slogged through all those articles (and comments) you cited, searching for gems among the piles of dirt, but finding little. While point-counterpoint debate is useful to the extent it actually enlightens, when it degrades into a mud-slinging shouting match about who is more stupid, I'm gone.

    So thank you for the level-headed reminder that the best investment approach is the one that works best for YOU.

    Aug 15 10:25 AM | 4 Likes Like |Link to Comment
  • Correction Arrived Early For Walgreen - So Now What After Only OK Dividend Hike? [View article]

    Excellent points on WAG and I understand the ambivalence here. Mulled it over myself before selling my position in WAG a week ago, due to the unsettling combination of uncertainties and sub 2% yield. Timing was more luck than skill, although the week's events reinforce that decision for me.

    WAG's role in my portfolio was high DGR. I know one single-digit increase does not a trend make, but on the heels of WMT's equally disappointing increase early this year, it seems retail still faces stiff headwinds in this sluggish economy. And also more uncertainty than the products they sell.

    I lightened my position in WMT a few months ago, though I still hold it. Redeployed the WAG proceeds into PG, KRFT, CVX and a few other others when some better valuations presented themselves this week.

    I like WAG and think they are making some smart moves that will serve them well in the long term. If I were not a recent retiree, I probably would have held onto it.

    Aug 8 11:06 AM | Likes Like |Link to Comment
  • Frothy Market, Impending Correction - What's A Dividend Growth Investor To Do? [View article]

    Thank you. Wise words to invest by.

    It's all about the long game. Make your plan, stick with it, tune out the noise.

    Aug 6 12:14 PM | 2 Likes Like |Link to Comment
  • Blackstone: The Market Is Putting The Wrong Company In The Bargain Bin [View article]
    I didn't see mentioned anywhere here is that BX is an LP (and issues a Schedule K-1 at tax time). Just pointing this out for retail investors who might be considering BX for a deferred account (not advisable). I hold BX in a taxable brokerage account.

    BX has been a great performer for me the past few years, but price has stagnated so I haven't added in quite a while. I now consider it purely an income play and a way to get exposure to financials (vs. banks). Not a SWAN holding, though. Private equity is a business that requires watching.


    Long: BX
    Aug 5 11:38 AM | 1 Like Like |Link to Comment
  • Dividend Champions For August 2014 [View article]

    (Voting with my "click" for David F.)
    Aug 5 12:06 AM | 2 Likes Like |Link to Comment
  • Dividend Investing Over The Past 7 Years Was Never Easy [View article]

    I agree completely and have also been trimming (or shedding) some low-conviction, higher risk holdings.

    Nothing wrong with WAG! It's had a great run; probably plenty of runway left. I've just got too many positions in total, so I figure it's a good time to concentrate the portfolio a bit.

    Happy "divesting" to you...
    Aug 3 12:41 PM | Likes Like |Link to Comment
  • What The Coca-Cola Critics Are Missing [View article]

    Great little article.

    KO spent 13 years in the top spot of Interbrand's (Omnicom Group) Top Global Brands survey, begun in 2000 and updated annually. KO was displaced for the first time in 2013 by Apple (#1) and Google (#2).

    Hard to compete in beverages with the global pricing power and loyalty that kind of brand identity engenders.


    Long: KO
    Aug 2 05:47 PM | 2 Likes Like |Link to Comment
  • Why It Can Be Self-Destructive To Compare Yourself To The S&P 500 [View article]
    PendragonY and Chowder,

    You captured it well.

    In my own experience during accumulation, I learned the hard way that a vague goal around building "the biggest pile of money" I could, inevitably led to taking on too much risk. Until 2008-2009 pretty much dispelled me of that notion.

    With DGI, I know exactly how much income I need, and how much it needs to grow each year, to support us in retirement. The risk profile on my portfolio has been significantly ratcheted down as a result. I invest in low beta stocks. Not constantly monitoring prices. And best of all, I no longer feel the need to reach for yield.

    "Peace of mind, babee," indeed!

    Aug 1 10:00 PM | 5 Likes Like |Link to Comment
  • Dividend Investing Over The Past 7 Years Was Never Easy [View article]

    LOL, yes, just doing my part to bust the myth that DGIers always ignore the cap gains piece of total return. :)

    Aug 1 09:45 PM | 1 Like Like |Link to Comment
  • Dividend Investing Over The Past 7 Years Was Never Easy [View article]
    Regarding WAG, I did something today I rarely do as a mostly buy-and-hold DG investor of quality stocks: I sold it all.

    It wasn't one thing, but a combination. The 1.8% yield, questions around the remaining stake in Boots Alliance and tax inversion, and the lack of information around the usual mid-July dividend announcement combined to the point where it failed to meet my "reliable, increasing income" test.

    It was only a 1/4 position. Got in at $43, but could never justify adding when the price climbed so rapidly relative to intrinsic value. Meanwhile, the yield has fallen so much that my 61% gain (tax free in IRA) equated to 13 years of dividends at today's rate.

    So I sold WAG and redeployed the proceeds into PG, XOM, GIS and GE - boosting my income in the process - and keeping my remaining dry powder intact for other uses.

    Aug 1 08:00 PM | 2 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Thursday's sell-off (and Friday's) mattered to me, an income investor, because I was finally able to put to use a bit of the dry powder accumulating since February. Topped off a few core DG positions yesterday and today, adding $500 to my annual income without substantially raising my cost basis in any of them.

    And if next week or the week after look like Thursday, I'll deploy some more.

    A one day sell-off is just a blip in the long game when one's focus is building a reliable income stream for retirement.

    Aug 1 07:43 PM | 3 Likes Like |Link to Comment