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mjs_28s

mjs_28s
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  • Why Dividend Investors Could Withdraw More Than 4% Of Their Portfolio [View article]
    "When a stock in your carefully constructed portfolio appears to be fairly valued, or even overvalued, pick an option strike price that would tempt you to sell, and write a covered call. You can often get a several percent (annualized) premium to add to your dividend."

    I love that and do it all the time.

    I often sell calls on holdings that are several strikes OTM so my chances of getting called out are very low. The income is pretty low, but even a booster of 0.20% to 0.35% per month is another 2.4% to 4.2% income. I am plenty happy scraping premiums that make most people laugh or act like $0.15 per share is a joke. Well, a very high percentage of the time i keep my holdings while boosting income high enough to often take a 3% payer into a 7 to 8% annual cashflow machine.

    This morning I sold XOM April 17 calls 9 strikes OTM for a whopping $0.14 per share ($89 strike). I won't complain if I get called out in less than 30 days after a $4 move per share from here. If not, I will throw out another sell OTM and scrape some more chump change.

    If my premiums for Exxon remain that small for a year, $0.14 per share per month, adding that to the current dividend, would make my Exxon position a 5.2% annual payer, which is pretty low but a very nice income booster if I was in need of 4% of my position for expenses.

    "I have also bought back a lot of positions at a much lower price than I had sold through selling the covered call. This does generate a lot of short term gains, but nothing is perfect."

    Too true that. I was finally called out of Intel after writing contracts on that holding for two years. In Nov 2014 I decided to give them up at $34. I was crying when I saw it running up from there even more but as of late, I am watching it since it has been bouncing $3 to $3.50 per share less than what I sold it for late last year. Earings are coming up though so I will wait.
    Mar 24, 2015. 02:42 PM | 2 Likes Like |Link to Comment
  • Why Dividend Investors Could Withdraw More Than 4% Of Their Portfolio [View article]
    "The biggest potential hiccup for this strategy comes from dividend cuts or dividend growth massively lagging inflation."

    I get that is a concern, but it is so often used as an argument and it is implied that 1) the investor never saw it coming and 2) if the investor never saw it coming that they would just sit there in shock rather than moving the investment from the dividend cutter to another stock.

    There are ALWAYS undervalued stocks out there, even in the hot bull market runs. There are ALWAYS stocks available that are increasing dividends (even if they are over valued in price). The odds are pretty solid that if you have a stock that cut a dividend that you could make at least a lateral move to another stock that has the same yield that you had before in your loser while also having a history of increasing dividends going forward.
    Mar 24, 2015. 02:16 PM | 2 Likes Like |Link to Comment
  • Why Dividend Investors Could Withdraw More Than 4% Of Their Portfolio [View article]
    George:

    The idea too is to not just sell pieces of every holding in order to get the larger income or your standard income and building dry powder with the difference. The idea would be do trim the profitable movers and letting the other go through their cycle.

    In years like 2013, which I believe the market was up (by the indexes) by 30%, one could take time like that to perhaps, take dividends plus a small part of the winners capital gains for extra income then reinvest another portion of the large winners into stocks that are undervalued or closer to par in value. That sets the investor up for increased income in following years with an increased chance at more capital appreciation since they are trimming winners to pick up stocks that are more value plays or add to current holdings that are undervalued.
    Mar 24, 2015. 02:10 PM | Likes Like |Link to Comment
  • Why Dividend Investors Could Withdraw More Than 4% Of Their Portfolio [View article]
    "What if the emergency is a multi-year period of slashed or cut dividends? "

    A diversified basket of equities is not all going to have the dividends cut. At worst you might have a year of no over all increase of income.

    Plenty of businesses raised dividends during our two worst bear markets in many decades, plenty raised dividends during the market crash (tech stock driven) in early 2000's, plenty raised during the 2007 to 2009 dumper, and even during the 1929 to 1954ish Great Depression there were many dividend increasers.

    What you describe as "...a multi-year period of slashed or cut dividends..." is a very rare occurrence and trying to plan for that is not worth the opportunity cost and really has not happened unless you lived in a war torn country that lost, like Germany. It can happen, but highly unlikely, and you would see it coming least a nuclear war or you investing in a country like Iran stock market.
    Mar 24, 2015. 01:55 PM | 3 Likes Like |Link to Comment
  • Why Dividend Investors Could Withdraw More Than 4% Of Their Portfolio [View article]
    Nice article and a great perspective that just might help those out that cannot get by on just dividend income alone.
    Mar 23, 2015. 07:25 PM | Likes Like |Link to Comment
  • Is USO About To Turn Things Around? [View article]
    So you are comparing a leveraged fund, 2X I believe, to a non levered fund?

    USO, during the same 50% move in UCO, was a 20% mover.

    Why would you select a time period that began several months ago and ended in mid february to make a point about an article published March 20th? At first blush it looks like you are either trying to counter the article or imply that the author is wrong because of some cherry picked price points that you are using from several months back and ending just over a month ago in order to debunk the article. Not everyone will take the 10 seconds to check your claim like I did, thus you will end up misleading readers of the thread.

    Did I miss something or misunderstand you?
    Mar 21, 2015. 01:03 AM | 2 Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    Nobody took it literally.

    Oi.
    Mar 20, 2015. 03:21 PM | Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    http://bit.ly/1xf9sn2
    Mar 18, 2015. 01:54 PM | Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    ROMEO.

    I love that and it is so true! Whenever I drop in for an Egg McMuffin there is always a group of ROMEOs in there. Now I know the guy code...that will soon apply to me.
    Mar 18, 2015. 01:52 PM | Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    dats right!
    Mar 18, 2015. 01:44 AM | Likes Like |Link to Comment
  • Nobody Wants To Be Seen In A McDonald's: Problem Or Opportunity? [View article]
    I think you hit that one on the head, Steve. Time seems to be the real issue.

    With McDonald's having most, if not all, the food items prep'd and sitting in heated trays, I know that when I am in a hurry that I can get my order within one minute to possibly two depending on the drive through traffic that my inside the building order is competing with.

    Jack N' the Box, Wendy's, Carl's, etc. seem to make the food from scratch (or at least have much fewer items premade so when I order, even when I am the only one at the store at the time, a burger might take 7 to ten minutes, especially at Jack's since I know the food does not touch the grill until order and the patty is not sitting in a heated steam tray.

    When I have 20 minutes it will be anything but McDs. If I have 10 minutes or less, its McD's. If it is breakfast time, McD's everytime.
    Mar 17, 2015. 01:02 PM | 2 Likes Like |Link to Comment
  • As Altria Keeps Rising, So Does The Temptation To Sell [View article]
    selling an individual holding to buy another individual holding is not market timing. It is looking at two individual securities and making a decision based on valuation. This has nothing to do with making a decision on the entire market or due to the entire market.

    By your definition even Buffett is a market timer, as are many value investors and even DGI who often pool dividends and deploy manually (the way I work dividends). If they weren't then they should not be sitting on cash while they look for value positions to take on.
    Mar 3, 2015. 07:29 PM | 6 Likes Like |Link to Comment
  • The Dividend Growth Investing Mindset [View article]
    as:

    Those are pretty high "typical" fees.

    The CFP that advises us on a trust fund that we have for charitable purposes started at 0.65%, 65 basis points for the points people, and only went down from there as the principle increased. That was not a special rate due to the type of account but the canned rate based on account value which was initially around $900,000.

    For the hypothetical $3M in your example, I am pretty sure that would be more than enough to qualify for the lowest fee tier of 25 points, or 0.25% for you percentage people. The 1.25% is WAY too high and should be under 1% for sure. 1% even on small accounts would have me shopping.

    Personal dollars though, I run that myself.
    Feb 17, 2015. 06:24 PM | Likes Like |Link to Comment
  • Why Buy A CD When I Can Buy W.P. Carey? [View article]
    RAS:

    Of course that is the goal. Notice I ended my comment with "...but obviously the preference is that it climbs over time."

    I was mostly intending to counter the declining income.

    I apologize for not being completely clear.
    Feb 12, 2015. 11:43 PM | 1 Like Like |Link to Comment
  • Why Buy A CD When I Can Buy W.P. Carey? [View article]
    cat:

    The decrease was specific to the dividend income provided and not the lifetime annual return or the 1 year return.

    Most people in retirement need a reliable income stream that at a minimum stays flat but obviously the preference is that it climbs over time. Having income that bounces around or is reduced over time can be a huge problem.
    Feb 12, 2015. 02:15 PM | 1 Like Like |Link to Comment
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