McAttack--I don't think you need to buy everything all at once. Figure out which stocks you either want the most and/or are most undervalued, then figure out the price you want to pay for each stock (which for me is always below the market price), then set limit orders. In my experience, it will take some time for you to accrue all 15 positions. Plus, the market always seems to pull back at least 5-6%, if not more, at least once or twice a year.
The Wisdom Of Not Reinvesting Dividends [View article]
I've noticed others comment that DRIPPING is better for smaller investors, but I think of DRIPPING as good for any investor who is in the process of building up positions--no matter how much money they have to invest. I guess I'd call myself an "active DRIPPER," meaning that I don't just automatically turn on dividend reinvestment; I pick and choose when to turn it on and off, depending on the individual stock and how much of it I own.
I also think in some ways DRIPPING serves as a hedge against the more emotional aspect of investing--that part of us that can't stand buying a stock for more than we originally paid for it, or that part of us that's too scared to buy a stock that drops right after we buy it. For example, when I bought AFL at $39 last year, it quickly shot up to $46 shortly thereafter. I was darned if I was going to buy a stock for $46/share if I'd just spent $39/share on it--even if I knew it was still undervalued. I had other stocks on my shopping list that hadn't leapt up in price. So DRIPPING allowed me to still invest a bit more in AFL, and now $46 looks like a steal--even if I didn't know it then. I'll eventually turn off my AFL drip when it becomes more fully valued, but for now I'm happy to keep it on.
The Wisdom Of Not Reinvesting Dividends [View article]
chowder/rich--as you can see below, I was typing my answer at the same time. (hence the reason for quoting chowder from his instablog.) I also added an example of AFL for flavor and comparison. my conclusion is that Fidelity gives a very fair price for divy reinvestment.
The Wisdom Of Not Reinvesting Dividends [View article]
I DRIP about 75% of my holdings, and take the dividends as cash from about 25% of my stocks. The instances where I take the dividend as cash are usually because I either have a full position in a stock or if I believe a stock has become fully or overvalued (I just turned off my DRIP for MCD, for example). Right now, I'm about 15% in cash and would like to be fully invested, so there's no need for me to accumulate much more cash at this point.
Rich, to answer your question as it pertains to my situation (as I believe that the answer may depend on one's brokerage). I reinvest dividends solely through Fidelity. Dividends are reinvested to my account on each individual stock's pay date, so that's usually once per quarter.
I am going to quote Chowder re. the divy reinvestment price, as he contacted Fidelity for his answer: "Dividend reinvestments are priced at the average price that the security is purchased by Fidelity. Fidelity pre-identifies all customers that will be reinvesting their dividend and goes to the market to purchase shares three days prior to the payable date. We purchase as many shares as possible on a best-efforts basis, determine the average share price, and reallocate these shares proportionately to the customers that are reinvesting their dividend. This process typically results in a different reinvestment price than the price that the security is currently trading."
So for example, AFL was reinvested in my taxable account on 3/1 at a price of $48.89. On that day, AFL's low was $49.57 and it's high was $50.67. However, if you go back 3 days prior to the pay date, you'll see that AFL opened at $49.20, hit a high of 49.46, hit a low of $48.51 and closed at $48.81. My divy reinvestment price doesn't appear to be an average of any of those #s, but simply within the ballpark. On a cursory analysis, I usually find that Fidelity's reinvestment price is towards the lower end of the price range. I'd be curious to see if anyone else reinvests their dividends with AFL, and if so, what price they received.
As far as cost basis is concerned, Fidelity keeps track. I'm not sure what fancy record-keeping other people do, as I have a tax advisor who takes care of it all. I get my forms from Fidelity, I give them to him. I don't like to create more work for myself if I don't have to!
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I sold recently as well. There are too many other fish in the sea with better dividend growth. And it's also nearing the top of it's trading range...I don't see it getting much beyond $40 in the near future.
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
haha, and to think I have 10 years of investing mistakes under my belt already! (parked my money just out of college into poorly performing mutual funds, then hired a financial advisor who had an ill-timed habit of buying at 52 week highs).
I'm already long OHI at a 50% position at $22.50, so I'll probably be a tad more greedy than if I was buying a starter position. So I may set my first limit order at $25.50 or so, than my second one at $23. If neither get filled, it'll be no big deal--since there are many other stocks I want that I don't have any of.
also, the news out of Cyprus has been dragging the futures down, so we just may start to get a bit of a pullback tomorrow. fingers crossed!
Bank Of America Has Failed Shareholders [View article]
RS--I have no issue with your opinion on BAC. But I will say this--as a newbie (and buy and hold/monitor) investor, I get confused by your sometimes frequent change of opinion. You were long BAC, then you sold it--that made sense to me at the time. Then you wrote 2 articles on 2/3 and 2/14 which basically said hey, I was wrong--financial stocks (including BAC) are actually a great buy. I appreciated your candor, and willingness to admit you made a mistake. But now a month later, you're saying BAC isn't a great buy.
Certainly the fundamentals behind a stock can change (although I'm not sure this is the case here), and you are totally entitled to change your opinion from month to month. All I'm saying is that sometimes it leaves me, and perhaps others, a tad confused. Does that make sense?
Time In, Not Timing Dividend Growth Stocks [View article]
sweeps--the only thing to be aware of with RDS-B is the possibility that if you reinvest your dividends through your broker, you may still receive some RDS-A shares, b/c of the Shell Scrip Dividend Programme. I'm not aware of the specifics and it may depend on your broker, but it's something to be aware of. I came across it in this article:
Bank Of America Has Failed Shareholders [View article]
just to clarify, it's just the income/dividend investor part of you that's disappointed, right? does the capital appreciation/growth investor side of you still believe that there is still upside and it is worth investing in BAC? (as per your articles in Jan/Feb--which I wholeheartedly agreed with) I am long JPM, BAC, WFC, but primarily for the capital appreciation and not for the dividends (or lack thereof in the case of BAC). I believe that BAC has the potential to go to $14-$16 this year.
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
SM--I'm in the same position as you. Did you buy a full position of WPC? I only bought a 50% position when it was at $43, so I'm thinking I will continue to hold and only buy more if it goes down. Can't wait to read your WPC article, Brad.
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
northhills--it seems to me that every year the stock market corrects 6% or more...sometimes a few times a year. that's when I personally tend to make the bulk of my stock purchases, since even high quality stocks get caught up in the downdraft. So if I'm interested in purchasing a stock that never seems to go down on its own, I'll set a purchase price for 6% below its current price, and buy a 25% position--so that would be around $27. if OHI pulls back another 6% from there, I'll buy another 25-35% position at $25.50, then another chunk at $24, etc. If OHI never makes it down that far, I'll be happy that I still have a small position in it. It does require some patience in waiting for the general market pullbacks, and you have to be ready to buy when that happens, but I find that this one works for me pretty well.
Walgreen: Should I Stay Or Should I Go Now? [View article]
agreed, satyr--WMT is making huge inroads into urban areas. Not necessarily prime real estate spots, but close enough that people may start making the trek to hem. Out in Cali, there's a Walgreen's about 5 minutes from me, and 2 behemoth WMTs about 30 minutes from me. But in the next couple of months, WMT is opening up 2 Neighborhood Markets 15 minutes from me. I may not want to drive 30 minutes to a WMT to pick up a few sundries, but 15 minutes and huge price savings is enticing. that being said, I see TGT as more of a competitor to WAG than WMT--WAG is building out larger, hip, flagship stores and TGT is creating CityTargets. but it's all the same to me--I'm long all 3!
The Market Is Advancing: Is It Time To Sell? [View article]
I've never been one to buy a full position in a stock all at once, so I'm slowly learning not to sell all at once too. in a market which feels frothy, like this one, I'm much more likely to trim my stocks that are capital appreciation plays rather than dividend plays.
David--did you end up selling SPLS in one of your portfolios? I seem to remember saying that you had, but perhaps you decided against it. If so, I'd be curious to hear your thought process in determining whether to sell it.
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The Wisdom Of Not Reinvesting Dividends [View article]
I also think in some ways DRIPPING serves as a hedge against the more emotional aspect of investing--that part of us that can't stand buying a stock for more than we originally paid for it, or that part of us that's too scared to buy a stock that drops right after we buy it. For example, when I bought AFL at $39 last year, it quickly shot up to $46 shortly thereafter. I was darned if I was going to buy a stock for $46/share if I'd just spent $39/share on it--even if I knew it was still undervalued. I had other stocks on my shopping list that hadn't leapt up in price. So DRIPPING allowed me to still invest a bit more in AFL, and now $46 looks like a steal--even if I didn't know it then. I'll eventually turn off my AFL drip when it becomes more fully valued, but for now I'm happy to keep it on.
The Wisdom Of Not Reinvesting Dividends [View article]
The Wisdom Of Not Reinvesting Dividends [View article]
Rich, to answer your question as it pertains to my situation (as I believe that the answer may depend on one's brokerage). I reinvest dividends solely through Fidelity. Dividends are reinvested to my account on each individual stock's pay date, so that's usually once per quarter.
I am going to quote Chowder re. the divy reinvestment price, as he contacted Fidelity for his answer: "Dividend reinvestments are priced at the average price that the security is purchased by Fidelity. Fidelity pre-identifies all customers that will be reinvesting their dividend and goes to the market to purchase shares three days prior to the payable date. We purchase as many shares as possible on a best-efforts basis, determine the average share price, and reallocate these shares proportionately to the customers that are reinvesting their dividend. This process typically results in a different reinvestment price than the price that the security is currently trading."
So for example, AFL was reinvested in my taxable account on 3/1 at a price of $48.89. On that day, AFL's low was $49.57 and it's high was $50.67. However, if you go back 3 days prior to the pay date, you'll see that AFL opened at $49.20, hit a high of 49.46, hit a low of $48.51 and closed at $48.81. My divy reinvestment price doesn't appear to be an average of any of those #s, but simply within the ballpark. On a cursory analysis, I usually find that Fidelity's reinvestment price is towards the lower end of the price range. I'd be curious to see if anyone else reinvests their dividends with AFL, and if so, what price they received.
As far as cost basis is concerned, Fidelity keeps track. I'm not sure what fancy record-keeping other people do, as I have a tax advisor who takes care of it all. I get my forms from Fidelity, I give them to him. I don't like to create more work for myself if I don't have to!
Waste Management, Not Really Uncool After All [View article]
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
I'm already long OHI at a 50% position at $22.50, so I'll probably be a tad more greedy than if I was buying a starter position. So I may set my first limit order at $25.50 or so, than my second one at $23. If neither get filled, it'll be no big deal--since there are many other stocks I want that I don't have any of.
also, the news out of Cyprus has been dragging the futures down, so we just may start to get a bit of a pullback tomorrow. fingers crossed!
Bank Of America Has Failed Shareholders [View article]
Certainly the fundamentals behind a stock can change (although I'm not sure this is the case here), and you are totally entitled to change your opinion from month to month. All I'm saying is that sometimes it leaves me, and perhaps others, a tad confused. Does that make sense?
Time In, Not Timing Dividend Growth Stocks [View article]
http://seekingalpha.co...
On another note, considering the news coming out of Cyprus, we may all get our long awaited pullback this week. time to warm up the shopping list!
Bank Of America Has Failed Shareholders [View article]
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
Why REIT Returns Have Been Systematically Better Than Non-REITs [View article]
Walgreen: Should I Stay Or Should I Go Now? [View article]
The Market Is Advancing: Is It Time To Sell? [View article]
David--did you end up selling SPLS in one of your portfolios? I seem to remember saying that you had, but perhaps you decided against it. If so, I'd be curious to hear your thought process in determining whether to sell it.