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Buyandhold 2012

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  • Retirement Strategy: Avoiding The Pitfalls Of Fear And Winning The 'Game' [View article]
    RS,

    In this article you highlighted one of the biggest mistakes that an investor can make: selling when the stock market is rapidly falling.

    If you own the right stocks, Dividend Aristocrats such as Johnson & Johnson, Exxon Mobil, and Proctor & Gamble, there is no reason to sell them. Their dividends keep on going up even during substantial stock market declines.

    Most of the trading on Wall Street today is done by institutions rather than individuals. That explains a lot of the irrational selling that has been going on lately. Many institutional investors seem to focus on the short term, thus delivering mediocre performance over the long term.
    Oct 18 01:39 PM | 5 Likes Like |Link to Comment
  • Johnson & Johnson: Growth-Growth-Growth; Win-Win-Win - Part III [View article]
    Robert,

    Interesting analysis of J&J.

    J&J has always been a buy and hold forever stock. In order to maximize total return over the long term, this is a stock that should be accumulated during substantial stock market corrections.
    Oct 18 09:03 AM | 8 Likes Like |Link to Comment
  • Why I Like McDonald's Better Than Chipotle (And Yes, I Have Taste Buds) [View article]
    Sure Dividend,

    I have a confession to make. I dislike the food at Chipotle and I think that the stock is extremely overpriced.

    The PE ratio of Chipotle is 56. That makes Chipotle so overpriced that it is ridiculous.

    The PE ratio of McDonald's is 16 and McDonald's is near a 52-week low.

    McDonald's is clearly a much better buy than Chipotle at this time.
    Oct 18 08:23 AM | 4 Likes Like |Link to Comment
  • The Most Dangerous Market Since 2008 [View article]
    mobyss,

    To answer your question, as a buy and hold dividend growth investor, I am able to make money no matter what the stock market does. I never sell any of my stocks.

    Since March 9, 2009, the stock market has roughly tripled. My portfolio has slightly more than tripled since that time.

    If we have a substantial correction and the S&P 500 falls at least 20% from its all time high, I will use my available cash or "dry powder" to add to my positions and to initiate new positions in high quality dividend growth stocks.

    70% of my total net worth is invested in stocks which I will never sell. 20% is in cash. 10% is in real estate.

    The beauty of having a portfolio of high quality dividend growth stocks is that even if the stock market goes down a lot, your dividends keep on going up. So there is no way to lose.
    Oct 17 05:29 PM | 3 Likes Like |Link to Comment
  • The Most Dangerous Market Since 2008 [View article]
    The stock market of 2008 was not dangerous. It was a fabulous buying opportunity.
    The Dividend Aristocrats could have been purchased in 2008 at discount prices.

    The truth is that there is no such thing as a "dangerous" stock market. If the stock market is going up, the investor makes money. If the stock market falls a lot, the investor is able to buy high quality stocks at discount prices.
    Oct 17 02:13 PM | 4 Likes Like |Link to Comment
  • Netflix Collapses: Time To Buy? [View article]
    I just checked out Netflix on Yahoo Finance. The current price is 361. The current earnings are 3.34.

    Since I never buy a stock with a PE ratio above 20, the most that I would be willing to pay for Netflix this year would be 67.

    If the price of Netflix falls from 361 down to 67 this year, I will buy it.
    Oct 16 08:51 PM | 2 Likes Like |Link to Comment
  • Market Meltdown Faced With Aplomb By Retirees Bolstered By Dividends [View article]
    George, I follow your articles. You have a lot of common sense.

    The fact that the S&P 500 has fallen 9.6% from its high of 2019 is a good thing. Dividend growth stocks are now becoming more attractive. As soon as the S&P 500 falls to 1600 or lower, I am planing to add to my positions in dividend growth stocks and to initiate new positions.

    I never sell. There is no reason to ever sell. My dividends keep on going up year after year.

    My favorite stock in the entertainment industry is Walt Disney. Disney has fallen quite a bit recently. Disney is a buy and hold stock that should be accumulated during substantial stock market corrections.
    Oct 16 08:40 PM | 1 Like Like |Link to Comment
  • Are Concerns Over Ebola Going To Ground Boeing? [View article]
    I don't believe concerns over Ebola are going to ground the airline stocks, but it definitely is not good for business.

    I fly back and forth from Florida to Connecticut a lot. I am not worried about contracting Ebola on the airplane.

    However, a close friend of mine and a golfing buddy is so concerned about Ebola that he told me he might drive from Connecticut to Florida instead of flying. I told him that if he is that worried he should just buy one of those special protective suits and wear it whenever he gets on an airplane.
    Oct 16 05:03 PM | Likes Like |Link to Comment
  • 5 Reasons The Oil Sector Is Due For A Big Rebound [View article]
    The energy sector has performed the best for me over the long term. I am watching with great interest as my shares of XOM have fallen from 104 to 90 and my shares of WMB have fallen from 60 to 50.

    Compared to the drop in the biotech stocks, this is a small bump in the road.

    After the S&P 500 has fallen to 1600 or lower, I am planning to buy more shares of XOM and WMB. I am also considering Phillips 66, Devon Energy, Chevron, and Schlumberger.
    Oct 16 12:19 PM | 1 Like Like |Link to Comment
  • Create Your Own Miniature Berkshire Hathaway [View article]
    "99% of Warren Buffett's wealth was built after his 50th birthday."

    Dividend Mantra, that is probably the most important fact in your article.

    I have no patience when a 45-year-old guy comes up to me and says: "Poor me. I started investing too late in life. My retirement portfolio is only seven thousand dollars. I'll never be able to retire. I'll always be living paycheck to paycheck."

    I always look the guy right in the eye and say BS.

    My mother's net worth at age 45 back in 1966 was zero. In fact, it might have been less than zero because she had debts from her second husband that she divorced.

    She was a teacher. Her income in 1966 was $8,000. Her income when she retired in 1984 was $24,000.

    Whenever she had extra money she would buy a few hundred shares of high quality dividend growth stocks and then never sell them. Now at age 93, her stock portfolio is in the eight figures.

    It is never too late to become a dividend growth investor. Now that the stock market has fallen quite a bit, dividend growth stocks are becoming attractively priced again.
    Oct 16 09:57 AM | 7 Likes Like |Link to Comment
  • Abbvie's deal with Shire is dead [View news story]
    I spent about twenty minutes figuring out what my capital gains tax would have been if Abbvie had acquired Shire.

    Well, that's one check I won't have to write.

    Instead of passing laws to make it difficult for companies to move out of the country, the tax laws should be reformed to make it attractive for companies to stay here.
    Oct 16 08:38 AM | 6 Likes Like |Link to Comment
  • Could The S&P 500 Fall To 1,625? [View article]
    Chris,

    Could the S&P 500 fall to 1625?

    Sure it could.

    I am hoping that the S&P 500 falls to 1600 or lower. That would be 20% off its all time high. That would be the point where I would begin to buy more shares of high quality dividend growth stocks.

    What the stock market needs to get me enthusiastic about buying more shares of dividend growth stocks is a good 20% off sale. A 30% off sale would be even better.
    Can't pass up a bargain in the stock market.
    Oct 16 08:33 AM | Likes Like |Link to Comment
  • What Is Happening Now Is Profound [View article]
    Someone may have had faith in the central banks, but I never did.

    Particularly since 1998, the Federal Reserve has established economic policies to soften the blow of utterly misguided and irresponsible economic policies coming out of Washington.

    To put it bluntly, Washington screws everything up economically and the Federal Reserve is like the kindly nursemaid using economic manipulation and smoke and mirrors to postpone the day of economic reckoning. The Federal Reserve essentially functions as an enabler allowing Washington to continue its reckless economic policies before the dire economic consequences become apparent.

    Janet Yellen's magic wand and economic fairy dust are not going to work forever to keep the stock market artificially levitated. Economic reality always has a way of eventually showing its true face. And the sight will not be pretty.
    Oct 15 08:53 PM | 1 Like Like |Link to Comment
  • When The Dividend Cut Writing Is On The Wall [View article]
    Eli,

    No one likes dividend cuts. I would much rather have a dividend increase.

    However, a dividend cut is not the end of the world and it is not a good reason to sell a stock.

    General Electric slashed its dividend after the financial crisis. The price of the stock fell to 7. An excellent buying opportunity.

    Williams slashed its dividend and the price fell from 50 to a dollar fifty. Then the price went back up to 60 and the dividend was substantially increased. Buying Williams at a dollar fifty would have been an excellent buy.

    JP Morgan slashed its dividend and the price of the stock became extremely attractive.

    You could almost say that a company slashing its dividend is a buy signal since the price of the stock usually becomes extremely attractive after the dividend is slashed.
    Oct 15 08:26 PM | 2 Likes Like |Link to Comment
  • 'Fear' Seems To Be Back In The Market [View article]
    What exactly are investors afraid of?

    That stock prices are falling?

    I am quite pleased that stock prices are falling. I have been waiting patiently since March of 2012 to add to my positions in high quality dividend growth stocks.

    The S&P 500 has fallen about 9% from its high. If the S&P 500 falls another 11%, I will begin to accumulate more shares of stock.

    Nothing puts me in a better mood than a good old fashioned sale in the stock market. I like to buy stocks when they're cheap.
    Oct 15 03:28 PM | 6 Likes Like |Link to Comment
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