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  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    Interesting article and well-intentioned comments.

    My only advice to the author:

    1. Be sure to fully fund YOUR (and your spouse's) retirement first, ahead of any investments for your children. The greatest gift we've given our two (now adult) kids is our own secure retirement. They will never have to take care of us financially - something our own parents were unable to do for us.

    2. Invest above your own retirement not to be able to gift your kids an inheritance at 18, but to launch their adult lives financially unencumbered. The second gift we gave each of our kids? 4 fully paid years of college, so they could start their independent lives debt-free. I spent ten years paying off my student loans, which meant I got a late start saving for retirement. Those early years of compounding are the most important, and once lost, can never be recaptured.

    We felt good knowing our kids could begin with a clean slate at 21 or 22 and still have 40-plus years of their own saving, investing, and compounding. Doing it themselves is instilling a sense of fiscal responsibility that will serve them well for life. And if all goes according to plan, they will likely also inherit a sizable portfolio (when we're gone) to augment their own retirements. Also something our own parents were not able to do.

    Anyway, just my two cents' worth.

    I do applaud the intent behind the author's plan. We all want our kids to have it easier than we did!

    Sep 3, 2015. 11:54 PM | 4 Likes Like |Link to Comment
  • 12 Attractive Fast-Growing Dividend Growth Stocks For High Total Return [View article]

    << I wish I could do that, but my boss would never make me that offer. (I am self-employed.)>>

    LOL. If it makes you feel any better, I'm in the same boat now: as an SDI, (a job I take seriously), I am my own boss. So there's no complaining about management anymore. :)

    I don't mind, though. The dividends comprising my retirement "paycheck" show up like clockwork in my account, without fees and inopportune buying / selling and tax surprises. They are also growing faster than my paycheck did my last 5 years of private sector employment (which included an across-the-board pay cut followed by 4 years of no increases).

    Happy investing.

    Sep 3, 2015. 07:48 PM | 1 Like Like |Link to Comment
  • 18 Seeking Alpha Contributors And Commentators And Their Picks For Future Dividend Growth [View article]

    Great compilation article and comments.

    I retired early, so I fully expect my retirement years to exceed my working years. So my investing plan specifically calls for a balanced mix of dividend payers and dividend growers in the portfolio.

    My target metrics ensure I follow the plan. Goal is ~4% current yield and ~8% (3 year) dividend growth at the overall portfolio level.

    Among those I own, for earnings and dividend growth I like: LMT, ACN, NEE, WEC, MMP, KMI, BX and SBUX. I add to these on dips whenever reasonable valuations present. (Obviously some, like LMT, haven't added to in quite a while.)

    On the watch list: V, GILD, ROST. Don't really need more diversification so not high priority to buy unless we get a major correction.

    Thanks for this important discussion!

    Sep 3, 2015. 01:09 PM | 1 Like Like |Link to Comment
  • 12 Attractive Fast-Growing Dividend Growth Stocks For High Total Return [View article]

    << What I didn't expect was that after I hit my number, I wanted to keep going. I didn't particularly care for the job that I had at the time, but after I realized that my staying in it was optional, a lot of the stress went away. When I had an obnoxious boss try to insult me, it just rolled off my back. I didn't care very much any more. Counter-intuitively, I probably became more effective in the job.>>

    LOL, I was just the opposite! Once the financial planner confirmed I'd reached financial independence and working was optional, I pretty much *lost* all motivation and tolerance for that irritating stuff at work (even though my job was moderately interesting). My productivity went down and stayed down for the next year or two.

    When offered an early retirement buyout 3 1/2 years ago in lieu of being laid off, I leaped at the chance. Never looked back.

    Now I'm motivated and doing what I enjoy: self-directing our retirement portfolio, informally advising friends and family, volunteering, and consulting pro bono at a couple of non-profits.

    To each his/her own, I guess!

    Sep 3, 2015. 12:48 PM | 1 Like Like |Link to Comment
  • REIT Showdown: Team SA Vs. Team VNQ [View article]

    A fascinating and original way to look at these REIT characteristics. Clearly a lot of effort went into this (a few data errors notwithstanding). Nice work!

    So many things to consider when comparing REITs - acquisitions and spin offs, credit ratings, type and quality of tenants, lease structures, number of years paying and raising dividends, etc. I find side by side comparisons difficult (and generally confine to one sector, say, medical eREITs ) but yours is an interesting approach.

    Thanks for making me think a little differently about the 5 REITs I currently own - and a few that maybe should be on my watch list. :)

    Sep 2, 2015. 10:20 PM | 3 Likes Like |Link to Comment
  • 10 Dividend Growth Stocks For Your Retirement Portfolio's Aggregate Yield 4.3%: Part 2 [View article]
    << If the stock provides sufficient income from a dividend payment and does not suspend/freeze/cut that dividend then why would an investor care what the stock price is? >>

    * As a trigger to consider either trimming or buying more, e.g., the "P" component of P/E ratio

    * As a signal of significant company or market news to investigate, e.g., if price rises or falls more than 3% on a given day

    Generally, though, I agree. Price is certainly not the focus of our DG portfolio. Income is.

    Aug 31, 2015. 01:09 PM | 1 Like Like |Link to Comment
  • Learning From The Masters: Market Meltdown Edition [View article]

    FWIW, here's one data point that suggests it is. Quote is from a NY Times article last Thursday by Robert Shiller:

    "Ten percent drops in the S.&P. 500 in just five trading days — such as what we just experienced — have not been common. Out of the 29 corrections since 1950, only nine happened in five days or less. Most of those happened since 2000, possibly because of the Internet and faster communications."

    Seems consistent with the notion that HFT and computer algorithms control (from what I've read) more than 50% of all trades.

    Aug 31, 2015. 12:46 PM | 1 Like Like |Link to Comment
  • How Dividend Reinvestments Will Increase My Cash Flow Over The Coming Year [View article]

    << Did you see the comment on another article this weekend where an advisor stated that retirees no longer invest, their portfolios are set and they just decumulate?>>

    I saw that comment and agree with the dissenters. Dividend growth rates have been slowing of late among even some of the bluest of blue chip DG stalwarts. For me, reinvesting excess dividends (above expenses) in our DG retirement portfolio provides not only that 2nd level of compounding you describe in your article, but ensures our income growth targets will continue to be met.

    I know I'm less likely now to sell a quality company whose DG falls below my "threshold" of 5% for a year or two. Ditto if the company temporarily freezes the divvy; I'm more inclined - and able - to ride it out. Less churn has been good for our retirement portfolio.

    Thanks for the straightforward article on this topic. Having an added layer of income growth protection is yet one more useful tool in the DGI arsenal. As the saying goes: Priceless! :)

    Aug 31, 2015. 10:38 AM | 8 Likes Like |Link to Comment
  • Retirement Strategy: Did You Freak This Week? [View article]

    Freak out? Hardly. I couldn't wait to buy! Amazing to see so many quality companies yielding so much higher than their 5 year averages, however temporarily.

    I deployed about 10% of our available cash Mon. and Tues. Nothing crazy - just top-offs of JNJ, CL, KO, PG, XOM, COST and VZ. Averaged up on all (except XOM), but more than happy to own more shares of these great companies at somewhat better yields.

    Robert Shiller published an interesting piece in the NY Times Thurs. titled "Rising Anxiety That Stocks Are Overpriced." He suggests (based on current high CAPE index) we may see a series of corrections over the next year or two, citing psychological and social factors, vs. technical or event-driven. It's still a "speculative bubble," but one based more on beliefs than facts, e.g., interest rates won't rise, the market always goes up, etc. Worth a read.

    Shiller also points out that, while a 10% drop in the S&P 500 in just 5 trading days is rare, most of them have been since 2000. The pervasive internet and "flash crashes" like this week certainly seems to bear this out.

    Anyway... since I can't predict what prices will do, or hope to compete with HFT or computer algorithms, I just plan to keep doing what I'm doing: buying every dip and continuing to build the income stream from our DG portfolio.

    Thanks for this piece, RS, and the great comments so far.

    Happy investing to all.


    Aug 29, 2015. 02:51 PM | 3 Likes Like |Link to Comment
  • Learning From The Masters: Market Meltdown Edition [View article]

    Very timely set of interviews! And great advice from all your masters who responded. Thank you.

    It's definitely appropriate to pause and reflect on a week like this past one. Wild ride, indeed. And also maybe the first test for those who didn't experience 1987, 2001, 2008, or the mini correction in 2011.

    With the market toppy and going mostly sideways this year, I'd already been consolidating our DG retirement portfolio into fewer, higher quality positions and setting cash aside. Bought every dip so far in 2015 and this was no exception.

    I waited until Monday morning before deploying about 10% of our available investable cash. No large moves - just top-offs of core positions, as I've done all year - in this case, I added to JNJ, CL, PG, XOM, VZ and one satellite, COST, where I'm nowhere close to a full position.

    Learned a few important things. As you noted, access was difficult due to the extreme buy and sell volumes. The bargain basement prices corrected so quickly that my limit orders were basically useless. I need to think about placing them ahead of the open in future. Did OK with Monday mid-morning market prices, even though they were on the rise. And more than happy to own more shares of these six, averaging up on all except XOM.

    Also learned - like your "kid in a candy shop" metaphor - I was not only unfazed by the enormous capital drop in our portfolio, I never for one minute considered selling. In fact, I couldn't wait to buy! I was downright giddy seeing so many quality companies yielding so much higher than their 5 year averages. Only got to top off a few, but so much temptation!

    I learned too that having a solid plan, a prioritized watch list with buy prices, and plenty of dry powder made all the difference for me. But so did exercising some restraint. I could easily have deployed much more of the cash reserves... and Mr. Market could just as easily have continued the down trajectory for many weeks vs. just one (this time).

    I was also grateful for those astute observers on SA who posted daily on what they observed: explaining trading patterns, fund redemptions, shorts covering, margin calls, etc. This helped me stay the course. I no longer own the funds that were madly liquidating (so no year-end tax surprises either). As a long term investor vs. short term trader it was weirdly fascinating to be an observer vs. a participant in the panic. :)

    I doubt we've seen the last of the market jitters for 2015 or the end of great buying opportunities. I, for one, will continue buying the dips and fine tuning my process - especially around limit orders - to be even better prepared for the next one.

    Happy investing to all!

    Aug 27, 2015. 06:58 PM | 4 Likes Like |Link to Comment
  • Chowder #, CAGR To Trim 100+ Stocks To <70 And Evaluate For Repurchase [View article]

    << You should write an article. >>

    Maybe I will - when I have about 5 more years of this stuff under my belt! LOL.

    In the meantime, just reading and learning as much as I can.

    Aug 25, 2015. 06:22 PM | 1 Like Like |Link to Comment
  • Chowder #, CAGR To Trim 100+ Stocks To <70 And Evaluate For Repurchase [View article]

    Nicely done. Your process parallels my own, and, I suspect, many other SDI's as they take charge and march up the learning curve.

    Our portfolio had 74 stocks at its peak after I transitioned from funds to dividend growth stocks. Then, taking pages from the books of Bob Wells, Chowder, David Van Knapp, David Fish, Chuck Carnevale and a few others, I got much more disciplined. One can't own everything. I was clearly more di-worsified than diversified. So I had to prioritize what was most important to our goals.

    In my (new) investing plan, I did not have a number of stocks in mind. Instead I set some broad sector % guidelines, then decided I wanted at least 60% of the portfolio - and income - from core stocks. The core includes many of the usual suspects: adaptable companies with financial and management strength, in necessary industries, with long track records of paying and raising dividends. And the ~35% satellites (cyclicals, tech, financials mostly) still had to have strong credit scores, Chowder numbers, and solid CCC histories.

    Then I started paring - and I admit it was scary exiting entire positions wholesale. Closed most with gains (pure luck that most of the cutting was mid-2014 to mid-2015) but some with minor losses. And a few with steep losses (that would have been much steeper now). I consider the education worth it.

    So... out went SJR, RCI, WM, SYY, INTC, DRI, BBL, WBK, VOD, AFL, LEG, BWP, SDRL and a couple others I don't recall. Built a cash reserve, then started adding to core positions every dip this year. Was not afraid to average up on Quality, even if some are showing paper losses now, since these are the positions I plan to hold a long, long time.

    Today I have 58 positions. All but two are investment grade. 24 are core, and I add to them every chance I get. 34 are satellites - most are keepers, but quite a few (like MCD, MDT, HCP, PAA and BAX/BXLT) are on watch because of market conditions, currency, or major shifts in business. So the 58 will probably get lower at some point.

    It's definitely been a learning experience - and not always an easy one.

    I commend you for taking a disciplined approach to concentrating your own portfolio, and sharing that process on SA!

    Aug 25, 2015. 12:54 AM | 7 Likes Like |Link to Comment
  • Get Your Smart Beta Here! Dividend Growth Stocks As 'Strategic Beta' Investments [View article]

    <<That's about it. The rest is just boring details.>>

    Hardly!! In my view, your fine retrospective should be required reading, every word of it, for any self-directed investor, and especially those who practice DGI.

    One wouldn't attempt car repair without first reading the manual and understanding how things work. One's investment portfolio, in my view, is no different. We're talking about one's life savings, after all - or the future ability to get there and support oneself independently. Seems to me that's worth more than just a superficial look under the hood.

    That being said: wow. Just wow. The way you systematically present, layer, and interpret the factor models behind MPT, and the retail investment products (and fees) they spawned, is just masterful.

    Kudos. A home run! And more insightful than anything I learned at the Ivy League school where I earned my Finance MBA.

    Many thanks, DVK. Looking forward to next installment.

    Aug 22, 2015. 10:26 AM | 5 Likes Like |Link to Comment
  • Retirement Strategy: Evaluating Your Risk Tolerance Can Be Gut-Wrenching But Vital [View article]

    Great (and timely) article.

    I think we're all going to be tested soon on our *actual* risk tolerance, vs. what we *think* it is. Even those of us who congratulated ourselves for staying the course and not panicking during the Great Recession are probably in a different mindset now, or a different place in our work or personal lives.

    Having a written investing plan (thank you, Bob Wells) is the best thing I ever did to manage our thinking around risk. Also understanding what drives valuation (thank you, Chuck Carnevale), the importance of quality (thank you, Chowder), and consistency in paying and increasing dividends through all kinds of market conditions (thank you, David Fish).

    And thank you, RS, for the frequent reminders to "buy the dips" and "focus on the income"! I do both - and sleep very well at night.

    Aug 19, 2015. 10:12 AM | 11 Likes Like |Link to Comment
  • How Much Kinder Morgan Is Too Much For A Dividend Growth Investor? - Part 2 [View article]

    Thanks for the follow up. Liked your summary and thought process. Most importantly, it sounds like you made exactly the right decision for YOU.

    I'm frankly amazed you were able to rise above the risk of "analysis paralysis," courtesy of your hundreds of well-intentioned investment advisers, er, commenters. I think I may have made a comment or two myself in that stream. :)

    I know you say this wasn't about KMI's price action, but the fact you were able to exit your 1/2 position without suffering a capital loss certainly makes it a more palatable transaction. Ditto on collecting most recent dividend to give yourself time to find a suitable income replacement(s).

    Nicely done.


    Long KMI (and holding)
    Aug 17, 2015. 04:09 PM | 3 Likes Like |Link to Comment