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  • Warren Buffett And Ordinary Stocks [View article]
    Re: BRK ... If I can get 8, 9, 10% on that money between now and retirement, I am happy.

    I can get that with the average dividend growth company and have an income from those companies to boot. And, I don't have to have favorable market conditions to realize any gains. I can keep what I have, generate those returns and still have an income stream.
    Oct 29 04:55 PM | 3 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    @6228371 ... >>> When analyzing an investment, one should focus on all the expected money inflows and outflows. <<<

    And you haven't shown a very good balanced way of doing this.

    In a down market your recommendations got crushed! How anyone can sit there and take a 60 to 70 percent draw-down, and see the income dropping at the same time, is beyond me.

    The market dropped 57.7% during the Great Recession, my portfolio only in the 35% range, but the draw-down was easier for me to handle because the income stream was growing.

    In a bear market your strategy loses to dividend growth investing.

    In an up market, almost all of your picks are down since you recommended them, and the only thing you have going for you is the distributions. Eight of the nine CEF's you recommended back in May are showing losses since then. Meanwhile the market has headed higher and higher!

    I have both an increasing income and a portfolio that closed at an all-time high yesterday. Again, your strategy is a loser!

    Dividend growth investing isn't a religion, it's just better than anything you've recommended to date. It's why you were so reluctant to tell us what you owned. I can see why now. At a time when throwing darts at a board and finding a winner has 8 of your 9 picks down.

    If you're going to criticize an investing strategy, you should at least show us a better way. You have failed at that. I don't mind being criticized, just show me something better when you do.
    Oct 29 11:16 AM | 9 Likes Like |Link to Comment
  • When Opportunity Knocks, It's Wise To Open The Door - Low Valuation Trumps Growth [View article]
    troll, one needs to be careful with CEF's to the down-side. I just commented on this today showing how some of the more recommended CEF's did vs my holdings during the Great Recession.

    I think people need to see both sides!
    Oct 28 04:54 PM | 1 Like Like |Link to Comment
  • What Likely Happened To Dividend Growth Retirees In The Recession: Another Point Of View [View article]
    @EyeBelieve ... >>> Sure, I could add high dividend positions to boost payouts, but wouldn't I also be adding undue risk? <<<

    Some might say to take on more risk by taking small positions in perhaps eREIT's and BDC's. The yield may rise, but I still think it isn't worth the risks involved to settle for lower quality companies.

    I prefer to overweight companies that have higher yields, yet still enjoy high credit ratings.

    I would do what I could to get that 3% to 3.7% or 3.8% while maintaining the same level of quality I now enjoy.

    I would have a double sized position in T with its 5.4% yield.

    I would overweight positions in VZ - 4.45%, O - 4.48%, MO - 4.3%, SO - 4.4%, PM - 4.5%, KMI - 4.5% and perhaps full positions in HCN, NNN or OHI.

    I believe this will approach would take you close to your 4%, still have some dividend growth, keep what you have for dividend growth and a little diversity, just with smaller positions, and maintain high quality companies with regard to risk.
    Oct 28 04:48 PM | 6 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    troll, I would agree that if someone's asset base is small, and they need to try and draw as much income as possible, I would think they still need to do it as safely as possible, and I would think they would still need some growth going forward.

    In this case the principles of dividend growth still apply, what changes is how they are applied. In the distribution phase where more income is needed, the focus may be on high yield, low growth.

    I can't imagine not taking on T's 5.4% yield with 2% dividend growth and high A- rating. With income being the priority, why be concerned with whether T can grow or not. Safety of the dividend should have priority.

    I'm not going to bring up a list of other companies, but this one provides the blue print on what to look for.

    I don't see anything wrong with owning a couple of CEF's as long as they pay out what they earn and are of high quality.

    I would look into something like TPZ for their yield.

    Unfortunately, some people in the distribution phase don't have enough income being generated from their assets and in that case may just have to be high yield investors and that might include preferred's.

    I know I wouldn't be doing pairs trading or counting on price appreciation to earn a living.

    Half of something is better than all of nothing.
    Oct 28 04:04 PM | 3 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    @troll, ... >>> I would either say that the statement is purely anecdotal or if not I compliment you on superior stock selection <<<

    Thank you for the compliment. It's not that difficult to outperform the market on income. I look for companies where the yield is at least 50% above what the S&P 500 pays, then you follow up with the Chowder Rule to close out the dividend growth and you can't help but outperform the market over the long term. After all, if one sticks with quality, they are buying some of the most financially sound companies in the S&P 500.

    If you'd like an itemized list of my holdings and see for yourself how total return and especially dividend income has crushed the market over the longer term, let me know.

    I've shown some of these results in various comments over the last few weeks. Scrolling through recent comments will show what the results are.
    Oct 28 03:49 PM | 2 Likes Like |Link to Comment
  • I Am A Dividend Growth Investor. I Want Dividends, Growth, And Dividend Growth [View article]
    Boom Boom, he didn't say the dividend had been increased for 115 years, he said it has been paid uninterrupted. GIS has not cut the dividend once in 115 years. Not once! That's powerful!

    His comment was in addition to the definition, not meant to be supported by the definition.
    Oct 28 02:41 PM | 3 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    Argyll, I would like to edit a previous comment to you about GILD. For now it is purely a speculative position and one I would consider selling if I can achieve a 30 to 40 percent capital gain.

    However, if GILD does get to that point, and it looks like earnings are going to continue to grow, I will allow GILD to go on. If it performs as well as my position in OHI did (OHI was a speculative position for me initially), GILD could turn into a supporting role player even without the dividend. I could see myself shedding 25 to 50 shares a pop and paying myself a special dividend so to speak.
    Oct 28 02:36 PM | 1 Like Like |Link to Comment
  • What Likely Happened To Dividend Growth Retirees In The Recession: Another Point Of View [View article]
    Ha! Ha! A great no response.

    I can honestly say the EP designation carries no weight with me. I know some writers would like to get more clicks, but I don't even care about that. I prefer quality to quantity.

    I've had SA ask me to publish some of my instablogs as they thought they were EP qualified. I'm not interested. Too much work. It's hard enough keeping up with comment streams of the authors I'm glad are writing.
    Oct 28 12:45 PM | 3 Likes Like |Link to Comment
  • What Likely Happened To Dividend Growth Retirees In The Recession: Another Point Of View [View article]
    Bob, the problem we have here with hypothetical examples is that you have someone who has never applied the dividend growth strategy himself, telling others why it isn't as good a strategy as it is. How would they know if they have no experience?

    I've been down the mutual fund route. I used to have a Series 6 license and I not only had all of my money in funds, I studied all of the leading fund managers so I would know who to recommend to clients.

    I've invested extensively in ETF's and CEF's. I see some people recommending some CEF's that make me shake my head in dismay. They seem to totally be ignoring destructive ROC and that will crush them in a market correction.

    I've experimented with many investing strategies and none is as consistent in performance than dividend growth investing, if a few guidelines are followed.

    Yes dividend growth investing has some weaknesses, but when you balance good vs bad, this strategy comes out with flying colors on a risk adjusted basis, and that risk adjusted will mean a whole lot in a bear market.

    The anti-dividend crowd is keen on showing the weaknesses of the dividend growth investing strategy, but they don't want to hear a word from those who are successful at it as to how they overcome or deal with those weaknesses.

    To me, this is an indication of their insecurity. They take our opposing view as an attack on their style of investing. I don't see it that way, I see it as people wanting different things from the market.

    I would never buy another mutual fund unless I was forced to, but I'm not going to suggest others don't. I suggest others invest whatever provides them the best level of comfort. Safety first, and then as confidence grows, and they wish to branch out, do so. It's as simple as that.
    Oct 28 12:34 PM | 11 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    stvrob, I agree with you. His comments don't carry weight here, correct or not, because they don't meet the objectives of most people here.

    I've been through 3 serious corrections now, and what caught my attention was the number of people who always believed in the building for growth concept and then switch to income investments near retirement and then weren't able to do it. They couldn't sell into a market that cut their portfolio in half, and it was cut at the time they needed it to be at its high.

    That's a risk I don't wish to take. I ignored that concept after the first 2 recessions and chalked it up to folks not planning well enough to avoid such a case, but how do you do that? It resonated this last time because I was nearing the distribution phase.

    If we get another serious market correction in the next 5-10 years, a lot of baby boomers are dead meat.

    People like 622, advisor, cranky and others weren't here in 2008-2009 explaining how we should invest in CEF's, funds and the index. It's easy to promote a strategy in a bull market, but they won't share what happened to them in the bear market.

    I saw what my holdings did during the Great Recession. I experienced the draw-downs and I experienced some dividend cuts.

    My portfolio didn't drop near as much as the S&P 500 did, it fell 57.7% from peak to valley. And someone heading into retirement or just entered it isn't going to develop ulcers? Selling into this was a disaster! Any income from index funds and others was falling with prices, yet my dividend growth continued even with the cuts I experienced.

    Almost every company I own dropped less that the S&P 500. That's peace of mind.

    To put things in perspective, some of the picks suggested and performance during the Great Recession by advisor are:

    PRF ... down 62.4%
    PRFZ ... down 62.8%
    VBR ... down 62.6%
    VTI ... down 56.9%
    VTV ... down 61.6%

    Every single one was down more than the S&P 500 at 57.7%. Peace of mind?

    The recommendations of 6228371 were even worse!

    BCF ... down 74.1%
    ETW ... down 61.3%
    EXG ... down 66.2%
    IGD ... down 69.0%
    BOE ... down 62.6%
    GGN ... down 74.8%
    DPO ... down 67.5%

    Where are the comfort levels? Are we not to understand what can happen during bad times? Bad times will appear again, do you think people are going to feel comfortable knowing that's what can happen? And again, the income flows from those assets declined at the time as well.

    My holdings during the Great Recession:

    KO ... down 20.8%
    D ..... down 42.1%
    SRE .. down 45.3%
    EPD .. down 50.1%
    KMP .. down 40.8%
    MMP .. down 61.2% (worse than the S&P 500)
    HCN .. down 50.1%
    O .... down 57.5% (and this was a recession caused by real estate)
    CL ... down 32.2%
    GIS .. down 34.7%
    KMB .. down 35.8%
    MCD .. down 31.2%
    PEP ... down 43.7%
    PG ... down 39.8%
    T ... down 48.8%
    VZ ... down 47.3%
    CVX ... down 46.6%
    XOM ... down 40.9%
    JNJ ... down 35.4%
    MO ... down 39.2%
    PM ... down 41.7%
    ADP ... down 36.2%

    Almost everything I owned didn't fall as much as the index and my income continued to grow. There's a lot of peace of mind knowing that my income will continue to grow in the face of the worst the market has thrown at us in over 50 years.

    So yeah, no matter how good the strategies sound offered by others, they aren't going to change my mind. I know better from experience.
    Oct 28 11:36 AM | 9 Likes Like |Link to Comment
  • The New Nifty Fifty, Part 2: Dividend Growth Investing's Greatest Hits [View article]
    >>> if I pick the nifty fifty off this list buy and hold I would expect my return to be...? <<<

    More than you're going to get from your funds.
    Oct 28 03:50 AM | 5 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    liusing, I don't know why I'd write an article for them, they don't read the ones they comment to now, and if they do, they certainly don't know how to determine the moral of the story. It'd be a waste of time.

    I direct my comments to their replies, but the message is for others to read who might still be trying to really understand the concept of dividend growth investing and have some legitimate concerns.

    The critics don't use the strategy, never have, and want to tell us why they don't think it works when it's working just fine for me.

    Dividend growth means my focus is on the growth of the income stream.

    Over the last 3 years, my 3 year CAGR on the dividend growth alone for the following companies has been:

    MMP ... 12.41%
    ADP ... 12.33%
    KMP ... 12.41%
    KO ..... 12.18%
    PEP .... 11.46%
    KMB ... 11.26%
    MO ..... 10.54%
    EPD .... 10.33%
    JNJ ..... 10.29%
    PG ...... 10.16%

    That's what I focus on. Income growth. For the first 3 quarters of this year, the portfolio total dividend growth is up 17.1% over the first 3 quarters of last year.

    My objective is 15% income growth or more each year, regardless of market conditions, and that's being achieved.

    I don't know why others would try and convince me to change. My results are exceeding my expectations. It don't get no better than that when you consider these results on a risk adjusted basis. People want me to take more risks. I don't need to and that's a happy place to be. What can I say?
    Oct 28 03:46 AM | 8 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    Argyll, I have considered, many times. I'm not interested in greater potential return from companies that have provided more growth than JNJ. I'm interested in companies with a dividend as safe or safer than JNJ. Dividend growth alone for me with JNJ over the last 3 years is 10.29%. That's the type of dividend growth I'm looking for, and that doesn't count the yield. That's easy money without the stress of counting on cap appreciation.

    I consider JNJ a core position which means I hope to never sell a single share. I hope to live off the dividends and pass the shares on to my kids for them to live off the dividends.

    The concept of hoping for share price appreciation to sell shares to generate cash to pay for living expenses has absolutely no appeal to me. I've been through 3 serious recessions now and hoping to sell shares to provide cash to live on doesn't work effectively. In fact, it locks in losses and compounds that to the downside because you must sell shares for less than they are worth. You have turned what could have been temporary losses into permanent ones. No thank you, but thanks for thinking of me.

    I'd like to own VFC again. I'm not interested in DIS. It's not a sector I wish to invest in. I have no desire to hold a mutual fund, ever. And GILD will remain a spec play for me.

    I don't need bigger and better returns. I only need more than enough to live off of.
    Oct 28 03:32 AM | 3 Likes Like |Link to Comment
  • My Dividend Growth Investing Epiphany [View article]
    Nope, GILD is a speculation play for me. I'll cash it in when I think I have an acceptable return. If I owned BRK and I may one day, I will consider it a spec play as well.

    Anything that is pure growth is speculation to me. It means I have to realize the gains or there's no other purpose for owning it. I can hold a dividend growth company until the day I die, but I'll realize the dividends, I'll be getting paid for my asset without having to sell it.
    Oct 28 01:37 AM | 1 Like Like |Link to Comment