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  • New Dividend Challengers Should Carry Warning Labels: "Caution! Not Recession Tested!" [View article]

    Thanks for your interesting observations, with SDRL and HSY as examples.

    Yes, the Challengers list has surged this year, as much a reflection of where they were in 2009 vs. their commitment to dividend growth or how they will fare in the next big down market.

    Since dividend growth reliability is an key element of my investment plan, I want to know a company has been "recession tested" at least once before I invest. So whereas before, 5 years of DG may have been enough for new purchases, now my minimum is 7-10.

    Always exceptions, of course (long SDRL, but it's a smallish position and I consider it speculative). And, like you, before I even look at the dividend history, I require a Value Line financial safety rating of 1 or 2 for most holdings.

    Aug 22 03:24 PM | 2 Likes Like |Link to Comment
  • 25 Dividend Champion Investment Opportunities: Something For Every Retired Investor, Part 1 [View article]

    Great context and overview. I own 9 of the 25 featured champions.

    I'm holding but not adding - yet - to the three I own that are undervalued from a historical P/E standpoint (AFL, MCD, and T). Their challenges are clear, being widely covered and analyzed, so at least it's possible to make a reasonably informed decision based on goals, investing time frame, etc.

    I like the growth and yield aspects of the small and mid-caps and would love to add a few more dividend champions to my watch list. However, the difficulty in conducting sufficient diligence is a barrier (for me).

    I'm curious what others consider adequate diligence on champions in the small and mid-cap arena (especially in post-accumulation, i.e., retirees), and how they go about it.

    And... looking forward to Part 2 - and the rest of the series.

    Aug 21 09:13 PM | 1 Like Like |Link to Comment
  • What, Exactly, Constitutes 'Yield Chasing'? [View article]

    "Personally, I do not understand the risks involved in some of these investments. That alone means that they are not investment candidates for me."

    Exactly. There is sufficient complexity in buying (and monitoring) the "traditional" higher-yielding investments. Those others vehicles never even make my list because of the amount of due diligence involved.

    Aug 21 08:33 PM | Likes Like |Link to Comment
  • What, Exactly, Constitutes 'Yield Chasing'? [View article]
    "Aside from realizing I shouldn't be buying stuff that ruins a night of sleep, NLY and AGNC still haven't come close to reaching the prices I almost paid for them."

    Mike, the first part of that statement made me laugh out loud. (And who among us hasn't been there?)

    I do have some high yield / higher risk investments (MLP's among them) but I study up and don't invest more than I'm willing to lose. My yield-chasing is somewhat limited by the fact that I don't understand BDC's, can't stomach the volatility of mREITs, and am mystified by the leverage strategies of many ETNs and CEFs.

    When I chase yield, I may be dumb, but at least I'm not ignorant. :)

    Aug 21 08:27 PM | 1 Like Like |Link to Comment
  • Microsoft: Time To Take Profits [View article]

    Enjoyed the article and especially your thoughts behind why it makes sense for you and "Mr. Softie" to part ways.

    As a recent retiree and dividend growth investor, I've found few companies in the tech sector that meet my criteria for rock-solid financial stability, decent yield, and reliably growing dividends. MSFT is one of only three AAA rated US companies by Moody's. Still paying significantly above SPY. Eleven years of strong (and increasing) DGR averaging double digits last five years, and over 20% last two years. My basis is in the low $20's, but even at today's valuation, MSFT is doing exactly what I bought it to do. Not selling this winner!

    On the other hand, I did part ways with INTC last fall, when they failed to raise the dividend. And I sold my HPQ today - a legacy holding from my pre-DGI days - on the post-earnings pop (basis between $14-$20).

    So, now I'm back to the conundrum on finding good DG candidates in the tech sector. :)


    Long: MSFT, ACN
    Aug 21 06:30 PM | Likes Like |Link to Comment
  • Selecting The Best REIT For A Long-Term Income Portfolio [View article]
    Nice article! I agree with the basic premise, and own 5 of the 6 mentioned - all in IRA's - and collectively they provide a nice boost to our retirement income. Holding primarily for yield, so I don't expect large dividend increases (other stocks play that role). HCP, HCN, and OHI have the added benefit of exposure to the Health Care sector.

    Not without risk, of course, and prices do fluctuate (rightly or wrongly) around interest rate perceptions (consider May 2013). So I limit REITs to about 6% of the portfolio total, and I hold them in proportion to their credit ratings and dividend histories. O is a full position, OHI a one-fourth, and the others around half.

    I also agree Brad Thomas's articles are worthwhile - it's likely I never would have delved into REITs at all prior to reading them, as I didn't understand how they work. Brad lives and breathes REITs, hence his expertise, but his articles can (IMHO) seem, shall we say, "over-enthusiastic" at times. So thanks, Brian Ditchek, for this alternative and measured view.


    Long: O, NNN, HCP, HCN, OHI (all in IRAs)
    Aug 21 06:11 PM | 3 Likes Like |Link to Comment
  • 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