Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
Folks,
What is about capital gain taxes? If I be in your choose I buy new company that has small price correlation with your old one - see http://seekingalpha.co...
Retire In Half The Time With Dividend Growth Investing [View article]
Rodger,
I think it will be interesting to see how taxes affect your "rule 36" if you crunch numbers assuming different tax rates for dividends (from low Bush's to high as it was before) and capital gain releases at 2X, 3X, 4X , ... price appreciations.
Retire In Half The Time With Dividend Growth Investing [View article]
Dear fellow retiree,
I understand that Rodger use 1M$ as the round number for example How much money a couple (without debt, in average health) should have let's say in 45/50/55/60 years for safe retirement in your opinion?
Using The 10 x 10 Table To 'Score' Dividend Yields And Growth Rates [View article]
retail: I receive money from dividend companies and amount directly related with my YOC. They may be "delusion" but any business here (in USA) accept these money.........
Dividend Reinvestment Plans, Part 2 - The Case Against DRIPs [View article]
Dear Monty,
Thank you for 2 informative DRIPs articles I read only today. I think one of DRIPs disadvantages is destruction of portfolio balance. Let's say my portfolio consists only 2 stocks ABC with 1% yield and XYZ with 10% yield with 50:50 ratio, both stocks have the same price at DRIP days. In several years my portfolio will have more XYZ than ABC. I'd like to see David Fish comment but because the articles are quite old I'll email him.
8 Income Investing Tasks To Complete Before Your Financial Smarts Erode [View article]
Thanks David Crosetti for guidance. I do tasks 1,2,4 and I hope it is quite early to me to follow steps 5,6,7 (I plan to work at least 10 years in high-tech research and development) but at some moment I'll do.
I disagree with your task # 3. If a good company keeps dividend unchanged for few years (BTW, I think it is a wise decision during 2008-2011) and investor yield on cost (YOC) is let say 10% a sell of such stock is not a good decision.
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
Jim Pyke & folks, Thank you for good article and comments.
I use mutual fund (ADVDX in my case) with automatic dividend re-investment in a small rollover IRA account (~ 30K$) just because I didn't know that a broker (Scottrade in my case ) can do DRIP. Of cause mutual fund charged me arm and leg in fees (1.18%) but 30K$ isn't enough for (middle-man independent) dividend capture strategy ADVDX provides me with current ~14% yield and small risk. I'd think any company with current dividend yield >10% is too risky, (although I have some with YOC above 10% in my regular IRA) so a high-yield mutual fund can be a choice for very small investor.
5 Stocks Meeting My Entry Criteria for Dividend Investments [View article]
Dividend Growth Investor, You have good approach useful for beginners in DGI. They should remember that "removing all stocks whose dividend payout ratio is higher than 60%." screen closes a door to some good DG stocks (MLPs, REITs). Also ".. a high payout could show that the company cannot afford to pay the distribution and that the risk of a dividend cut is high." is not always true. Sincerely SDS
Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
Counterpoint, Thank you for theoretical exercise. I not 100% agree with your methodology but importance of taxes is impossible to overestimate. So, I "vote" for low taxes on dividends. Sincerely SDS
Barry32, I'm looking outside US for diversification and I have no clue on exchange ratios because I'm watching ADRs and their prices should be adjusted to "original" stock by arbitragers. I don't worry about currency risk: I expect to hold a stock about 10 years so all currency fluctuations should be zero out in a long run. I have few non-US stocks and got slightly "random" dividends in US$ (e.g. from BMO) because of exchange ratio but I do not care. A company should have a good dividend policy in their domestic currency.
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
Hello,
I compared the performances of David Fish's CCC list with SPY (ETF for S&P500) and found that the following stocks underperformed the S&P 500 by 20% (see details in my Instablog http://seekingalpha.co... for "Will we see dividend cuts (Nov 6, 2011)?") Contenders NWFL AVP HIFS Challengers DV AM ACI ITT STRA BMRC
Will they cut dividends? I don't know - let's see in 1 year.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Jeff Paul wrote "Hmm..check that math. If the current yield is 4% and the firm increases dividends by 5%, the new yield is 4.2%, not 9%. If the stock appreciates by 5%, then your total return is 9% (5%+4% div)."
I guess you replied on my answer (if not, sorry): "I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield" Because I did it just before go to bed after hard week error is possible but I do not see anything wrong. Let me do step by step: 1) I bought 1 share of ABC at 10$ when they paid 0.3$ dividends, so my initial YOC is 3%. 2) Now ABC pays 0.9$ dividends, so my current YOC is 9%, so I have 3X better YOC after N years of holding. 3) Meantime during these N years of lost decade+ ABC stock price went up and down and today it is 20$, so my price appreciation is 2X. 4) Assume I sell today: I get 20$, where 10$ are long-term capital gain, so I have to pay 4$ taxes and put 16$ in my pocket or in another dividend company, let's say XYZ. BTW current yield of ABC is 0.9/20=4.5% 5) If I buy 1 share of XYZ (and my broker do not charge me at all) in order to have 0.9$ income I need to find XYZ with 0.9/16=5.63%.
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
Jeff Paul wrote: Hi SDS, Can you clarify what you mean when you said "it is difficult to find a good replacement until 2x-3x price appreciation"? I didn't follow that.
I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield.
Dividend Investing And Black Jack: How Strategic Money Management Can Make You A Winner [View article]
What is about capital gain taxes?
If I be in your choose I buy new company that has small price correlation with your old one - see http://seekingalpha.co...
SDS
Retire In Half The Time With Dividend Growth Investing [View article]
I think it will be interesting to see how taxes affect your "rule 36" if you crunch numbers assuming different tax rates for dividends (from low Bush's to high as it was before) and capital gain releases at 2X, 3X, 4X , ... price appreciations.
Sincerely
SDS
Retire In Half The Time With Dividend Growth Investing [View article]
I understand that Rodger use 1M$ as the round number for example How much money a couple (without debt, in average health) should have let's say in 45/50/55/60 years for safe retirement in your opinion?
Sincerely
SDS
Using The 10 x 10 Table To 'Score' Dividend Yields And Growth Rates [View article]
I receive money from dividend companies and amount directly related with my YOC. They may be "delusion" but any business here (in USA) accept these money.........
Dividend Reinvestment Plans, Part 2 - The Case Against DRIPs [View article]
Thank you for 2 informative DRIPs articles I read only today.
I think one of DRIPs disadvantages is destruction of portfolio balance.
Let's say my portfolio consists only 2 stocks ABC with 1% yield and XYZ with 10% yield with 50:50 ratio, both stocks have the same price at DRIP days. In several years my portfolio will have more XYZ than ABC.
I'd like to see David Fish comment but because the articles are quite old I'll email him.
Sincerely
SDS
8 Income Investing Tasks To Complete Before Your Financial Smarts Erode [View article]
I do tasks 1,2,4 and I hope it is quite early to me to follow steps 5,6,7 (I plan to work at least 10 years in high-tech research and development) but at some moment I'll do.
I disagree with your task # 3. If a good company keeps dividend unchanged for few years (BTW, I think it is a wise decision during 2008-2011) and investor yield on cost (YOC) is let say 10% a sell of such stock is not a good decision.
Sincerely
SDS
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
Thank you for good article and comments.
I use mutual fund (ADVDX in my case) with automatic dividend re-investment in a small rollover IRA account (~ 30K$) just because I didn't know that a broker (Scottrade in my case ) can do DRIP.
Of cause mutual fund charged me arm and leg in fees (1.18%) but 30K$ isn't enough for (middle-man independent) dividend capture strategy ADVDX provides me with current ~14% yield and small risk.
I'd think any company with current dividend yield >10% is too risky, (although I have some with YOC above 10% in my regular IRA) so a high-yield mutual fund can be a choice for very small investor.
Sincerely,
SDS
Dividend Reinvestment: What Some Winners and Losers Look Like Over Time [View article]
I think your article about DRIPs will be fruitful SA community.
Sincerely
SDS
European stock for sale (Nov. 1, 2011) [View instapost]
5 Stocks Meeting My Entry Criteria for Dividend Investments [View article]
You have good approach useful for beginners in DGI.
They should remember that "removing all stocks whose dividend payout ratio is higher than 60%." screen closes a door to some good DG stocks (MLPs, REITs). Also ".. a high payout could show that the company cannot afford to pay the distribution and that the risk of a dividend cut is high." is not always true.
Sincerely
SDS
Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
Thank you for theoretical exercise. I not 100% agree with your methodology but importance of taxes is impossible to overestimate. So, I "vote" for low taxes on dividends.
Sincerely
SDS
European stock for sale (Nov. 1, 2011) [View instapost]
I'm looking outside US for diversification and I have no clue on exchange ratios because I'm watching ADRs and their prices should be adjusted to "original" stock by arbitragers. I don't worry about currency risk: I expect to hold a stock about 10 years so all currency fluctuations should be zero out in a long run. I have few non-US stocks and got slightly "random" dividends in US$ (e.g. from BMO) because of exchange ratio but I do not care. A company should have a good dividend policy in their domestic currency.
SDS
Why Dividend Growth Investors Should Not Ignore Stock Prices (Part 2) [View article]
I compared the performances of David Fish's CCC list with SPY (ETF for S&P500) and found that the following stocks underperformed the S&P 500 by 20% (see details in my Instablog http://seekingalpha.co... for "Will we see dividend cuts (Nov 6, 2011)?")
Contenders
NWFL
AVP
HIFS
Challengers
DV
AM
ACI
ITT
STRA
BMRC
Will they cut dividends? I don't know - let's see in 1 year.
Sincerely
SDS
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
wrote
"Hmm..check that math. If the current yield is 4% and the firm increases dividends by 5%, the new yield is 4.2%, not 9%. If the stock appreciates by 5%, then your total return is 9% (5%+4% div)."
I guess you replied on my answer (if not, sorry):
"I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield"
Because I did it just before go to bed after hard week error is possible but I do not see anything wrong. Let me do step by step:
1) I bought 1 share of ABC at 10$ when they paid 0.3$ dividends, so my initial YOC is 3%.
2) Now ABC pays 0.9$ dividends, so my current YOC is 9%, so I have 3X better YOC after N years of holding.
3) Meantime during these N years of lost decade+ ABC stock price went up and down and today it is 20$, so my price appreciation is 2X.
4) Assume I sell today: I get 20$, where 10$ are long-term capital gain, so I have to pay 4$ taxes and put 16$ in my pocket or in another dividend company, let's say XYZ. BTW current yield of ABC is 0.9/20=4.5%
5) If I buy 1 share of XYZ (and my broker do not charge me at all) in order to have 0.9$ income I need to find XYZ with 0.9/16=5.63%.
Sincerely
SDS
Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
wrote:
Hi SDS,
Can you clarify what you mean when you said "it is difficult to find a good replacement until 2x-3x price appreciation"? I didn't follow that.
I bought ABC N years ago for 10$ at 3% YOC, now (thanks to ABC dividend policy) my YOC is 9% and stock price is 20$ (2X price appreciation, so today ABC yield is 4.5%). If I sell now I get real 16$ =20$-4$ (taxes Federal + California) and need to find stock (the same quality as ABC) with 5.63% yield . For 3X price appreciation I'll get 22$ if sell and replacement should be at 4% yield.