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  • What Do I Do With My Stocks If The Market Crashes? Part 1 [View article]
    jprizzuto: He has long experience......and can back his thoughts up with facts that are clear to see are market based and true to what he is teaching....I believe he made no mistake in that sentence at all......:)

    I hold several of those 10 he showed at the bottom of the article and my experience with them was exactly what he pointed out.........they have recovered nicely AND the sale price that I got more of them for has increased the value of my portfolio quite a bit because of that.

    "But most importantly, in the aggregate, not one of those persistent clients suffered with a cut in their dividend income. Instead, each and every one received a raise in pay each year because the combined dividend increases of the successful blue chips overcame the losses created by the few losers. The lesson we all learned, don't sell perfectly strong and fine companies for less than their fundamental strengths indicate."

    Peter Lynch put it this way in his "20 Golden Rules":

    Rule 13: A stock market decline is as routine as a January blizzard in Colorado. If you are prepared, it can not hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.

    Rule 15: There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of newscasters. Sell a stock because the company's fundamentals deteriorate, not because the sky is falling.

    Rule 16 is one that more people need to pay attention to: No one can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what is actually happening to the companies to which you have invested.

    I can not find it now, but I believe he is also the one who said something like this: "You have to know the difference between a broken stock and a broken company."

    Those fundamentals will help you know that difference.

    Think about it............
    Mar 20, 2014. 05:47 PM | 33 Likes Like |Link to Comment
  • Living Off Dividends in Retirement [View article]
    Good for you - I was able to teach my children and some of my grandchildren by simply having them watch me make my investments and answering ALL questions as they came up. No later than the 4th birthday - they had their own dividend paying stocks and from things like being able to go into MCD and buy their own food with their dividend payment amount (I reinvested the dividend but gave them that same amount for spending) and being able to cheer about "I own that place !!" when they pass by one in the car on rides - they have developed an appreciation for stock ownership VERY young and it has lasted all their lives so far.
    Apr 21, 2010. 10:50 AM | 21 Likes Like |Link to Comment
  • The Right Time to Buy Dividend Stocks [View article]
    Well done as usual. My own thoughts on the matter are these:
    Over the long term - it really does not matter if you pay a bit extra for a solid company. Reinvesting the dividends makes a huge difference. I probably did pay too much for PG when I first bought them over 50 years ago, but it has long since made no difference in my returns from them. They were a well run company with a number of products that I knew about and used myself.
    I LOVE finding the deals and buying a stock when it is broken for one reason or another can be a wonderfully satisfying thing to me. You just have to be sure that it is only the stock that is having trouble - not the company itself. The satisfaction from finding a good deal is a reward all by itself, but you really don't need to wait for a deal for a superior stock over a decade or more of investment time. When you are buying a business (and that is what buying a stock is at the base idea) and it is a superior business - giving it time to do what it needs to do is not a hard thing. I learned patience in places like Viet Nam where the first one to move died. I am still here. I perfected it over a card table - playing poker with some of the best in the world at the time. Peter Lynch put it like this in Rule 3 of his "20 Golden Rules":
    Often, there is no correlation between the success of a superior company and the success of it's stock over a few months or even a few years. Over the long term, there is a 100% correlation between the success of a company and the success of it's stock. This disparity is the key to making money. It pays to be patient and to own successful companies.
    Rule 11 says :
    If you invest $1000 in a stock, all you can lose is $1000, but you stand to gain $10,000 or $50,000 over time if you're patient. You need to find only a few good stocks to make a lifetime of investing worthwhile.
    Another thing to keep in mind though is Rule 6:
    Owning stocks is like having children -- don't get involved with more than you can handle. The part-time stock picker probably has time to follow 8-12 companies, and to buy and sell shares as conditions warrant. There don't have to be more than 5 companies in the portfolio at any given time.
    Ben Graham recommended later in life that when picking stocks with only a few (or even just one parameter such as 2/3 book) you needed to have 30 to be safe but that was buying stocks with no more checking on them than that one parameter. That works and works well, but if you are looking at the books, reading the reports and really keeping up with the company - you do not actually need a large number of stocks to be safe. Many of the largest trust funds never had more than a dozen stocks in them at any one time, but they were solid companies whose business was well understood. Think about it.
    Mar 17, 2010. 08:32 AM | 21 Likes Like |Link to Comment
  • Retire Like An Aristocrat: A 5-Stock Starter Portfolio To Consider [View article]
    I started over 70 (seventy) years ago with only a bit over a hundred dollars in one stock.......the important part is to simply get started with the money you have and let the dividends reinvest to grow your holdings while adding money as often as you can - monthly is perfect and something that everyone can do much more easily now than when I started.

    I would not have done as well as I did if brokers had not thought to help me as a youngster by allowing me to buy without the huge commissions they were charging everyone else. I was young enough that I was sort of special to them....sort of a mascot that brought luck to them so I got taken care of in ways no one else did at the time.

    Today the internet makes investing inexpensive enough that everyone can get started investing for very little and they should do it for their own future benefits.
    There are values out there and worth finding.....
    Jun 23, 2014. 10:09 AM | 20 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    As far as selling to create a "dividend"........Peter Lynch put it this way in his "20 Golden Rules" #3:

    Often there is no correlation between the success of a company's operations and the success of it' stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of it's stock. This disparity is the key to making money; it pays to be patient, and to own successful companies."

    The dividends allow me to receive cash for my comfortable living while those price disparities play themselves out. I am not forced to sell low to pay my bills.

    That is a very valuable and clear difference, regardless of any theory that says different.

    Think about it...........
    Mar 13, 2014. 10:48 PM | 20 Likes Like |Link to Comment
  • Living Off Dividends in Retirement [View article]
    Bravo !!! Well said and clearly put. An article that everyone should read and think about as it makes the case for this kind of stock investment very well. You also make the point about looking for value in your investments and that was well done. History shows that value investments beat the heck out of growth over the long run.
    Thank you once again for another great point clearly made.
    Apr 21, 2010. 09:05 AM | 19 Likes Like |Link to Comment
  • Investors Should Not Be Complacent About Dividend Champions [View article]
    James, Thank you for an outstanding look at why you should not be complacent and why buy-and-monitor is MUCH better than people who think that dividend investing is a buy-and-hold process.

    I buy those dividend stocks for the long term and intend to hold them forever, but watch them anyway just to make sure everything stays good for me. You have to do this - if only because everyone makes mistakes and being a corporate manager does not exempt you from that problem.

    I know I make mistakes. Heck - I got married intending that to last forever also and I am on my third wife now...enough said about that...

    I have been investing in DG stocks for over 50 (that is fifty) years now quite successfully. One thing about them is you CAN ignore them and let them do their own thing while re-investing the dividends if life insists that you be someplace else for a bit. I did exactly that during Viet Nam and was much better wealth-wise at the end of that time than I was at the beginning of it as an example. It is not a recommended practice with DG or any other investment, but you can do it BECAUSE the steady dividends tend to take care of themselves.
    Do some of the companies crash?? Of course they do, but the successes outweight the losses and you come out ahead anyway if they were carefully chosen in the first place.

    It is something to keep in mind and think about...
    Sep 23, 2011. 03:34 PM | 18 Likes Like |Link to Comment
  • Dividend Investors Beware: A New Paradigm Shift Is Coming [View article]
    You really can not win sometimes. There has been a lot of accusations of "pump and dump" lately and it is pointless. If you actually have a reason not to invest in a pick - say so and give the reason so all can learn. To simply complain about a choice without saying why has no place in a forum where people are giving their time to help show you something that they think might be valuable to you. I spend a lot of time here helping to educate people about investing, but I have no interest in writing articles here. I do not need the aggravation. On the other hand, I have met a lot of nice people here so I continue to comment and teach where I can.
    Mar 25, 2010. 02:44 PM | 18 Likes Like |Link to Comment
  • Dividend Investors Beware: A New Paradigm Shift Is Coming [View article]
    Dividend stocks, in general, may not have met your qualifications, BUT dividend stocks that have paid a rising dividend for 5 years or more have done exactly what you have said. They have outperformed both the general market and their sectors.
    Mar 25, 2010. 10:10 AM | 18 Likes Like |Link to Comment
  • McDonald's: You Want Fries With That Dividend? [View article]
    I have owned MCD for a very long time and see no reason to sell.....I consider them the Best of Breed here.
    Mar 3, 2014. 11:17 AM | 16 Likes Like |Link to Comment
  • Has Dividend Growth Kept Up With Inflation? [View article]
    Bob, My Core Portfolio has no real secret companies in it and I talk about them in my comments. The real difference is simply the amount of time I have had many of them. PG, MCD, PEP, KO, MO, PM, and JNJ are some of my largest holdings. Research showed that REITs and MLPs can actually lower the beta and volitility of a portfolio so I have some of them in my portfolios also (not much imagination there either as NLY and LINE are good examples of what is in there). CEF adds a balance of both Gold and Silver to it and has helped also during the market ups and downs.

    Much of the portfolios were bought either on sale or through dividend reinvestment. I have had many of them long enough to have no money of my own in them and those rising dividends are simply free money getting sent to me quarterly. I run a total of 42 portfolios now for myself and my family. It adds up over time....

    There are some here on SA who would like to think of me and other dividend investors as somewhat dumb and very lucky. I am thinking that if you can beat a benchmark that darn near every mutual fund can not over a long period of time (over 5 decades now) by 10+% annually on average - we have taken it out of the range of dumb luck long ago....
    Mar 16, 2012. 07:36 PM | 16 Likes Like |Link to Comment
  • Five Stocks Prove Buy and Hold Is Not Dead [View article]
    You are making a very basic mistake here. Every time you buy and then sell you pay taxes - long term or short term capital gains taxes - every single time.
    Stock prices go up and down - it is what they do. The price of the stock makes no difference to the dividend stream. DGI, (and others like David Vann Knapp) in this article and many others is pointing out that you can do quite well from the dividend stream without trading in-and-out at all. That dividend stream is the point of having a Core Portfolio of solid, dividend RAISING companies - not just pay a dividend - but raise it consistently.

    DGI has done a great service by pointing out and proving that it does not really matter WHEN you get into this kind of stock over several decades of holding them.........The best thing you can do for yourself is simply to buy them.
    If you can get them on sale during a down market for them - wonderful!!! It is not needed to wait for that deal though - just take action and let those dividends build over several decades of time.
    Aug 4, 2010. 11:35 AM | 16 Likes Like |Link to Comment
  • 11 High Quality, Low Beta Dividend Stocks [View article]
    You are missing the point. A portfolio that focuses on dividends cares about the dividend stream - cap gains is secondary but they will come as the dividend rises and the stock price tends to rise with the dividend. This is how a company can raise the dividend for years and keep the same yield - the stock price moves up with the dividend.
    Another thing to keep in mind is that since a dividend portfolio falls less in a down market - it recovers faster by virtue of having less to go up.
    Think about it.
    May 26, 2010. 10:33 AM | 16 Likes Like |Link to Comment
  • Living Off Dividends in Retirement [View article]
    Hello tweedn - You are right about having some fixed income in the portfolio for several reasons - I use bond ETFs for 34% of my Core Portfolio not only for the monthly money coming in but also for their tendency to move opposite stocks and provide some smoothness to the portfolio's movements up and down.
    I would NOT use mutual funds for diversification though for several reasons. They tend to under perform the markets over time. They charge too much in fees to give you that poorer performance and they tend to have investments in their portfolios that I would not want to be invested in. I do better by picking outstanding individual stocks and ETFs where they make sense (emerging markets and bonds as an example).

    BTW - you do not need more than 30 (thirty) stocks as research has shown that number pretty much mirrors the market as a whole. Ben Graham recommended using 30 stocks for safety when you were only using ONE parameter such as low P/B for finding your value investments. If you use more than just one parameter and do your DD more carefully than that - you could do better by focusing on the best of the best even if it is only a dozen stocks or less. You can be well diversified with as few as 5 (five) best-of-breed dividend payers and avoid the "diworsification" trap :)
    It is something to keep in mind.
    Apr 21, 2010. 09:47 AM | 16 Likes Like |Link to Comment
  • MLP Master: A Conversation With Elliott Gue [View article]
    Thank you very much - this was well said and clearly put. I like MLPs also and LINE is my largest holding and has treated me pretty well overall. I appreciate the work here and the suggestions for more DD. Well done.
    Apr 8, 2010. 11:58 AM | 16 Likes Like |Link to Comment