19709

4 Dividend Stocks to Hedge Against Social Security Failure

Incorrect.

*The author is expecting to live off the dividends, not any appreciation in the stock.
*If the dividend is great, the stock will not lose all value. Why? Because investors will buy the stock in order to realize the dividend yield which will stabilize the stock's price if not cause it to appreciate.
*Dividend growth implies growth in earnings. Companies are in fact increasing dividends despite this recessionary period.



On Aug 26 02:29 PM TonyP4 wrote:

> This is the common misconception to buy high-paying dividend stocks.
>
>
> * return = price appreciation + dividend
> If the price appreciation is good, just sell the stock and use part
> of the gain as income.
>
> * For the same equation, it will not help you when the dividend is
> great but the stock loses all the value.
>
> * Dividend growth normally implies stock appreciation. But, not in
> the current phase of a market cycle (market bottom).

4 Dividend Stocks to Hedge Against Social Security Failure

One correction: Interest earned in a ROTH IRA is not taxable. Have you thought of supplimenting your dividend income by selling covered calls?


On Aug 26 08:51 AM whisperonthewind wrote:

> I agree that we need to supplement Social Security, whether it's
> with a personal IRA/401k or dividends. I began with a Roth, preferring
> not to have to pay additional taxes at distribution time, except
> on the interest, but my general portfolio (outside the Roth) was
> doing so much better that I've since concentrated on that. I aim
> for stocks with dividends (although not exclusively) and I aim for
> 5% or better. My goal is to have the dividends available in the future
> to use as that supplement, and to save the base stocks for my family
> to inherit and hopefully use for the same purpose. I think of it
> as my own personal social security.
>
> Although I initially bought stocks emotionally, I no longer listen
> to the advice by public analysts - now it's for the yield, and 2
> to 3% is not nearly enough for me. I had a lot of oil stocks last
> year, and watched the price of gasoline go up without caring. My
> fuel efficient car helped there, and my dividends more than covered
> the higher costs, even while increasing my stock base. I now have
> a few more financials, and although their dividends are not up to
> my standards, their base value has tripled and the dividends will
> come back. The oil stocks are still covering my fuel costs (and then
> some), and are also still increasing my base.
>
> On the sidelines, but still evident, are the tanker stocks (waiting
> for the next push) and housing stocks (also starting to come back),
> and the utility stocks (holding their own).
>
> With luck, I will get enough in the dividends to supplement my income
> and cover the additional taxes from the income. And if I'm really
> lucky, I won't care if Social Security is there or not.

4 Dividend Stocks to Hedge Against Social Security Failure

You're forgetting the compounding effect of increasing dividends, not to mention the likely appreciation in the stock price (your bse investment).


On Aug 26 08:08 AM Oldguy67 wrote:

> The average person(family) can not accumulate
> enough funds to support themselves in a long
> retirement based on a 2 or 3% return.
>
> If you only get 3% return on a million dollars you will
> only generate $30,000.00 anual income. That is a
> less than average income for 2 people much less
> if it has to support more people.
>
> The fact these stocks consistantly raise their dividends
> is meaningless when they pay out such a low percent
> of the base investment.