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  • I'm Buying W.P. Carey For The Long Haul [View article]
    Great article, Brad! Makes me feel even more comfortable holding this solid REIT as part of my ROTH for eventual retirement. Just reinvesting those "divvies" for now.
    Apr 15 09:27 AM | Likes Like |Link to Comment
  • How One Retiree Is Muddling Through Dividend Investing: Part IX - My Dividend Investment Business Plan [View article]
    Great article, and good description of your "path" towards finally putting down the "business plan" in words.

    I am trying to find some old research on stock diversification, but I distinctly remember reading several years ago in a book on diversification that you should NEVER allow a single stock position to get above 10% of your total portfolio. I cannot find the source, but basically the study said once you rise above 10% with a single company, your portfolio becomes too sensitive to specific company events- say BP and their well fiasco in the Gulf of Mexico, or Exxon and the Valdez spill. Both great companies, BUT if something bad goes wrong, your portfolio could take a big hit, dividends may be cut due to some extraordinary event, etc. Interestingly enough, I am currently selling off a little Exxon Mobil each year, for that very reason as it was as high as 13% of our portfolio at one time. The only reason I don't seel it all at once is capital gains, we need to spread it out over several years from a tax standpoint.

    Just a thought, I would definitely draw the line at 10%, if not below that (maybe 7% or 8%).
    Apr 9 11:40 PM | Likes Like |Link to Comment
  • My Dividend Portfolio: Q1 2014 [View article]
    I can remember actually watching the show after the 1987 crash!!! I was in the third year of my residency at the time, tired after workin all day from 5 AM, it was friday night, waiting for the ER to page us for trauma cases. We were on call at the hospital in downtown Houston (Univ. Texas- Houston). Everyone was talking about the "end of the world" at the hospital, and after listening to his sage advice to stay the course, I went out the next week and brought some stock- MO, LLY, and Colgate Palmolive (CL) for my wife. Everyone told me I was "crazy". Still have those positions. Needless to say they are all HUGE positions now (with a basis of only a few bucks/ share), after multiple splits, dividends, and appreciation. Have sold some of them off a little bit, when they have grown to be too large a position. Each position throws off thousands of dollars in dividends per year. Yield on cost is incredible.
    Apr 7 06:33 PM | 3 Likes Like |Link to Comment
  • My Dividend Portfolio: Q1 2014 [View article]
    I started investing when I was in my very early teens (1972), with money I earned cutting lawns/ summer jobs, etc. Also inherited a relatively small amount (~18K) at that time, which formed a nest egg to start. My grandfather was a self made investor/ nuclear scientist, who got me interested. First stock I bought was Burlington Northern Sante FE RR, now owned by Berkshire Hathaway, which I still own. As you can imagine, my cost basis on many of the stocks are "pennies" per share! I used to go over and watch "Wall Street Week" with Louis Ruckeyser every Friday with him, until I started dating, high school sports/ etc. Even then, went over until we got our first VCR, when I could record it and we'd watch it together. Due to the long time period (over 40 years), as well as really aggressive savings at my peak earnings years (mid 1990's to 2012), been able to accumulate north of 3M. Most is in taxable accounts, tax deferred (IRA's) and tax free (OTCPK:ROTH) are much smaller portion of this, about 20%. They can't (won't) be touched until later in life. Still reinvest majority of it, but ALOT now goes to Uncle Sam. Don't really sell unless company takes turn for the worst. Still favor solid "Moaty" stocks, that pay good/ rising dividends. I own a fw Australian stocks- BHP/ BBL, WBK, etc., myself.
    The old statement about "compound interest is the worlds eighth best wonder really applies. Now, reinvesting those dividends really is beginning to kick growth up.
    Apr 7 01:41 PM | 5 Likes Like |Link to Comment
  • My Dividend Portfolio: Q1 2014 [View article]
    I concur with you that there are few (if any) quality dividend stock that are "on sale" right now. KO, MCD, maybe CSCO, GE, PG are all maybe 10% below fully valued. But no real screaming bargains right now. Therefore, I am just stockpiling dividends, waiting for the market to collapse and serve up some cheaper fare.

    One I did pick up recently (at $40.5/ share) that offers a higher yield but relatively anemic dividend growth is Southern (SO). People are down on it due to some cost overruns on new nuclear complex, troubles with completing other projects. It's not cheap, but with a yield of 4.6% it is closer to a bond proxy as you'll get.

    I also am building a solid dividend stream. Now at $71K dividend income for the year, so looking to transition from part time work to "retirement". Great way to invest! One of the best things about it is IF you get "high quality" companies, they can continue to pay/ raise their dividends even if the overall stock market collapses.

    Curious to know your Australian holdings. It appears as if most of your dividend income is concentrated there- which IMHO is "risky" due to the lack of diversification. I would definitely consider diversifying somewhat.
    Apr 7 09:52 AM | 2 Likes Like |Link to Comment
  • Reduce Your Portfolio's Downside Risk Before The Coming Market Correction [View article]
    A timely reminder of the fact that stocks periodically do "correct". Probably the most important take home is that many of us are outside our desired asset allocation now, and should consider taking some money out of stocks. However, right now our choices are pretty sorry- cash with NO yield to speak of, or bonds with piddling yields and the possibility of 5-10% losses, especially with longer duration. Personally, I am taking a little out of stocks and collecting all dividends as cash, and putting it in short to intermediate term muni funds, even though it is painful to do so. Worst case scenario, lose 2-3% or so. BUT, sooner or later that correction will arrive, and (unfortunately) no one rings a bell to warn us.
    Mar 31 09:14 AM | 1 Like Like |Link to Comment
  • Microsoft And Apple: The Battle For Dividends [View article]
    Good article. As a long time DGI (and recent semi- retiree), both stocks come out highly rated as long term holdings. AAPL of course has only started paying a dividend, so it is early. However, if they keep increasing the dividend at a decent rate, could turn out to be an excellent long term buy/ hold. MSFT has been a good dividend payor for several years, hoping they keep it up!

    Long both AAPL and MSFT.
    Mar 28 11:30 AM | Likes Like |Link to Comment
  • A Dividend Growth Investor Looks At AAII's Stock Screens [View article]
    Thanks David, another great article. I had just been looking at the AAII website and was debating whether to subscribe. Since they apparently do NOT place emphasis on dividends and dividend growth, I'll pass for now.
    The follow up book to Weiss's "Dividends Don't Lie", written by Kelly Wright is "Dividends Still Don't Lie", as noted above. It is a "good read", IMHO. Places a significant emphasis on dividends as well as dividend growth, also "financial strength" of the companies. Unfortunately, I didn't read it until after 2008-09, or I would have dumped some of the weaker stocks (mainly financials) that wound up slashing their dividends during the recession. Now I look at David Fish's CCC list to start, then screen for financial strength before a stock makes my "watch" list. Dividend cuts can be disastrous to a portfolio, and usually indicate several years of poor performance ahead.
    Feb 5 11:25 AM | 3 Likes Like |Link to Comment
  • 3 Bond Strategies For The New Year [View article]
    I am like several of the posters above who feel that the slim yields offered in bonds DO NOT compensate one adequately for the risk of capital loss/ destruction. At least with cash, my "loss" is a known quantity- the inflation rate. Here I am having turned 55, "semi- retired", and according to all asset allocation "models" I should have at least 30% in bonds/ fixed income. Yet, I look at the losses last year in my "good" short to intermediate bond funds (VFIJX and VFIDX for retirement accounts, VMLUX and VWIUX for taxable accounts), and I wonder if it is better to just accumulate cash, as TAS has done above. How can we continue to print massive amounts of money and flood the money supply, without eventually having consequences from it, such as inflation, devaluation of our currency, etc.??? I question whether "treasury rates have approached fair value", as the author states.
    Jan 3 09:43 AM | Likes Like |Link to Comment
  • Exelon 38% Undervalued With A 5.4% Yield Based On Normalized Cash Flow [View article]
    I too bailed on this DOG of a stock earlier this year, after buying in about 5 years ago, and reinvesting dividends into a sinking ship. Took a fairly large tax loss, have decided that it is one of the most poorly managed utilities out there. It "might" turn around in the next 5-10 years, but just too many "ifs" out there for me. There are other "better" managed utilities out there, like Southern (S0). Hung on to some of my lowest cost shares, the ones that were (unfortunately) the most recently purchased. If you look at it's long term performance, it has been a dog for years. Just will hold my small residual position in case she wakes up from the dead, but I'm not holding my breath! Lesson learned! If a DG stock cuts the dividend, think twice about investing.
    Jan 2 01:26 AM | Likes Like |Link to Comment
  • 4 Dividend Growth Stocks For 2014 And Beyond [View article]
    Good review of these four stocks! My one "critique" would be that I require a "dividend growth stock" to have a minimum of a 2% yield, as well as AT LEAST 5 years of annual dividend growth. Part of this is related to past experiences of lower yielding stocks taking too long to really develop a "good" yield, and companies with less than 5 years of dividend growth not demonstrating the "commitment" to return cash to shareholders. There are too many dividend stocks yielding over 2% and with at least 5 years of dividend growth out there. This crosses FDO (1.6% yield), PII (1.16%), and ABC (1.34%) off the list, at least for me. Again, this is just my "filter". Definitely all four belong in the watch list category, though.
    Dec 28 05:30 PM | 1 Like Like |Link to Comment
  • A Strategic Shift In My Dividend Portfolio [View article]
    Smart move!!! Coke has always been a "stabilizer" stock in my portfolio, and the dividend growth ensures it will grow in value over the long run. As long as you don't overpay for it, it is definitely a long term holding.

    I hold a large chunk of KO, initially bought in 2005, along with a large assortment of other dividend champions/ contenders/ challengers (47 total stock positions). The yield on cost for my Coke position is now about 6%. A few of my stock positions recently started paying dividends- AAPL & AMGN for example. All the others (except BRK.B) have at least 5 or more years of rising dividend payments. All of my positions are between 1- 4% of total portfolio, except XOM, which we are slowly selling as it has grown to 10% of total portfolio. XOM was my first stock, bought many years ago (early 70's).

    I too am curious which REITS and utilities you sold. The one's that we hold (O, NNN, WPC, WY, SO, DUK, SCG) have all been beaten down somewhat in price, due to fears of rising interest rates. However, I'm not selling, if anything I may add to some of them opportunistically!
    Dec 26 09:37 PM | 2 Likes Like |Link to Comment
  • Lexington Realty Trust Is A 'Dark Horse' REIT That Should Shine In 2014 [View article]
    Another great article, Brad! If given a "choice" to invest in either LXP or NNN, which would you choose right now, based on their current price and value, as well as anticipated future growth prospects? I actually had been looking at LXP and thinking about selling my position in NNN, and rolling it towards LXP. I like NNN as it has a long history of increasing dividends, financial stability, etc., etc. However, LXP looks like it may be the better in terms of valuation right now, future dividend growth combined with capital appreciation. Being a traditional "buy and hold" value investor, I'm looking to hold at least 5 years (or more), definitely not a short term "trader".
    Dec 23 10:58 AM | Likes Like |Link to Comment
  • The Case For 0% Bond Allocation [View article]
    Sorry to hear about your relative. Shows that sometime really bad things can happen to even the best people, and life isn't always "fair". First off, this tragic situation demonstrates the importance of an "emergency fund" for everyone- at least 3-6 months of living expenses.

    Tim, being young and having his whole investing life in front of him, may be comfortable going with 100% equity, as long as he has an emergency fund set aside. However, as one ages and gets closer to retirement, I still believe bonds should be considered as part of one's investment allocation. Bonds in the current low rate environment STINK, as far as their anticipated returns over the next 5-10 years. They will probably be doing "well" just to break even, when one adjusts for inflation. However, as one ages bonds can be a strong "stabilizing" influence for a portfolio.

    My wife and I have been fortunate/ blessed/ lucky/etc. to have amassed a decent sized portfolio (>3.3 million) at age 55, after I started investing at age 15, in the early 1970's. Seen a few bad bear markets, learned alot along the way. We have grown this using quality dividend growth stocks (WMT, JNJ, ABT/ ABBV, etc.) and patience, never selling out in a bear market, etc. We also have always lived below our means, and saved aggresively. Now, we can almost live off our dividend income, which is my ultimate goal. Now, I have 14% of our allocation in bonds, primarily a short term muni fund (VMLUX) with a duration of around 2 years. We also have a few individual munis that fortunately have not been called in early (yet). Our bonds/ funds will probably do well to keep up with inflation, but it is "comforting" to know I could raise over $450 thousand in a moments notice, WITHOUT having to sell any of my DGI stocks. This is "downside protection" in case we have a brutal long bear market (2-3 years or more) AND some catastrophe that required us to raise alot of cash. I would HATE to be forced to sell stocks at the bottom of a bear market. That is where the bond allocation protects to the downside, and is worth considering as one ages. Just worth considering for investors as they age, as the risk of a "black swan" event is always there, and it is much harder to recover when you are 55, 60, or 65 and have a HUGE loss, as well as being forced to sell stocks. My plan is to slowly build to around 30% by age 65, even though I will leave some potential "return" on the table by not being 100% in equities. I give up some return to provide "cushion" to the downside. So, bond percentage should be determined primarily by one's risk tolerance and individual circumstances, and truely needs to be determined on a case by case basis (IMHO at least).
    Nov 17 02:41 PM | 2 Likes Like |Link to Comment
  • The Nonchalance Of Both Dividend Growth And Bond Investors [View article]
    Good comparison of some of the thought processes that go into differentiating between DGI and bonds. A couple of things came to mind.
    If you are going to buy individual bonds, you really need a sizable chunk of money to be adequately diversified. One of the risks of individual bonds is default (or even a credit downgrade) that seriously impairs your principal. I personally believe you would need at least 100K in individual bonds to be adequately diversified. Since many people are in 401k's/ IRA's, it is generally "easier" to put "bond money" in funds, as opposed to individual bonds. An "advantage" of the fund is you achieve better diversification quickly, as well as the fact that as a small investor we get "creamed" with buy/ sell spreads in the bond market, versus institutional buyers. With a fund though, you are not "guaranteed" return of your principal, if rates rise (as we suspect they will).
    The other issue is "risk tolerance". Right now, a lot of investors feel they have a "high" risk tolerance as the equity market has been very kind to us for five years in a row. Will that "high" risk tolerance be there when we get a 30-50 or even 70% swoon in equities??? That should really determine how much one holds in stocks. If there is a chance you will "panic", lower your equity exposure.
    Last thing is to remember that a "bond bear market" is NEVER as steep a loss as a stock bear market. Generally a bond "bear" market is just negative for a year or two, maybe 5-10% maximum. So they are really there to "balance out" the equity side, lower the overall risk of the portfolio. I worry when I see a bunch of people say they are 100% equity now. If they can GUARANTEE they won't sell out, fine. But I think some of them underestimate the fear (terror) they will experience in a painful/ grinding/ prolonged bear market, like 1973-74, 1981-82, 2000-02, or 2007-2009. I've been doing this 40 years, and I lick my chops in those situations. But at parties in 2008 through early 2009, I heard many friends who just went to all cash and locked in their losses. Sad, but it will happen again, sooner or later. So for the vast majority of people, I would say keep your equity side somewhere between 25% and 75%, with the balance bonds and cash.
    Nov 12 02:21 PM | Likes Like |Link to Comment