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chowder

chowder
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  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    @hector ... >>> I think anyone who refuses to purchase a stock solely because of the lack of a dividend is taking an overly simplistic approach to stock selection. <<<

    Simplistic? ... Absolutely! ... That's the beauty of it. I can still receive market beating returns over the long run, with less market risk, and create a "reliable" and "increasing" income flow regardless of market conditions, and it's easy.

    Your concept of selling off shares to create cash to meet income needs sounds terrific in theory, and does work on occasion. I've been through 3 serious market corrections greater than 30% and I can tell you that selling into those conditions has you doing the one thing you aren't supposed to do. ... Sell at the lows.

    You may feel comfortable selling into something like that, but I will say your thinking is below simplistic if that's what you expect to do.

    I saw my portfolio draw back more than 30% during the last recession, but I saw my income flow grow. There was no panic or anxiety on my part over whether income needs would be met during the most horrible market conditions since the Great Depression.

    Yes, color me simplistic for ignoring share price action and being totally committed to my dividends.

    On another note, over the last 5 years, the S&P has seen an annual growth rate of 17%. I could be wrong, but I think that anyone who expects the market to grow at a 17% annual growth rate over the next 5 years is nuts, and I say this respectfully.

    Therefore, I am of the opinion that a greater portion of the market's total return going forward will come from dividends. Think about it.

    Dividends for me all the way babee, but you're right, to each their own.
    Aug 13 05:43 AM | 18 Likes Like |Link to Comment
  • Kinder Morgan: Mega Merger Enhances Dividend Growth Story [View article]
    I agree with your comment Northwest.

    I own all 3 Kinder companies, already had sold EPB at a nice profit, and like you I held KMP in a taxable account. In fact, I was going to make another purchase in KMP because of its tax efficiency.

    I'm not going to complain though. There was always the risk that any MLP structure could change.

    On a positive note though, I am delighted at the double digit dividend growth that KMI is expected to throw off out to 2020. It's not a bad consolation prize.
    Aug 13 05:23 AM | 4 Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    Dale, I agree with you that earnings power is the key. I also agree that yield chasing isn't the best way to successfully use the dividend growth strategy.

    I consider myself a dividend growth investor and will not consider a non-dividend paying company in my personal portfolio.

    The very first criteria I look at is earnings power, both past and future expectations.

    Companies that meet my minimum earnings growth, yield and dividend growth criteria all outperform the market over longer term periods.

    It's very difficult to try and convince those of us who draw thousands of dollars every month in dividends that they don't count. ... Ha!
    Aug 12 08:45 AM | 5 Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    >>> Then why is every second DGI proponent talking about ignoring "naysayers"? <<<

    Experience norm, that's why.

    We've tried other strategies and understand the pros and cons. More than that, we've experienced the pros and cons and know what works best for us.

    You haven't engaged in the dividend growth strategy yet, so you sit there and critique things you have no experience in doing yourself.

    I don't consider myself closed-minded when I ignore tactics that I found didn't work as well for me. It's that simple.
    Aug 12 08:34 AM | 10 Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    I don't believe an ETF can beat an individual company selection strategy either.

    ETF's as a whole can and do become overvalued. If someone is still in the accumulation phase, they are then forced to continue investing into something that is overvalued.

    Someone selecting individual companies is always in position to purchase something selling at a discount to fair value. The better the discount the higher the yield, thus the higher the dividend income over an ETF.
    Aug 12 08:26 AM | 8 Likes Like |Link to Comment
  • Kinder Morgan: Mega Merger Enhances Dividend Growth Story [View article]
    Richard is the man! He could open a chain of hot dog stands and I'd invest in him.

    He is giving up a percentage of ownership and some might say he can afford it, but I like to give credit where credit is due. When asked if he was going to double his salary, he politely refused. ... Ha!
    Aug 12 02:12 AM | 3 Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    Daniel, I had to laugh at your comment about risk. That was me when I was young. Like RS, I found out how wrong that approach was.

    Here's what you are missing ... the power of compounding.

    You are giving up the years that would make a significant difference down the road when it comes to compounding. All you have to do is find a compounding computer online and see for yourself the difference in the numbers when you start at age 21 as opposed to 31 or 41.

    Like maybenot above, my recommendation is building the foundation first where the dividend income can start the compounding process and then at a later date add some growth in, but the core starts first.
    Aug 12 01:42 AM | 16 Likes Like |Link to Comment
  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    When I look at a company to determine quality, it's the company's financial strength that I'm looking for. Using Value Line as an example, I look for companies that rate a 1 or 2 for safety. I can find both dividend and non-dividend paying companies that qualify. However, I go a step further and eliminate the non-dividend paying companies from consideration.

    I don't question the non-dividend company's ability to create cap appreciation, I simply don't wish to count on favorable market conditions in retirement to sell and provide an income. I prefer to receive my dividends which come regardless of market conditions and I don't have to touch the principal unless I choose to.
    Aug 12 01:18 AM | 26 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    martin, you may be right. I don't own IBM personally but I did make an initial purchase, which represents a 1/4 position, in a portfolio of a young person with 30 plus years to retirement.

    I'll wait until next year to determine if I add to the position or not.

    Good luck to you as well.
    Aug 12 12:01 AM | 1 Like Like |Link to Comment
  • Frothy Market, Impending Correction - What's A Dividend Growth Investor To Do? [View article]
    cross, you took my comments out of context. I know what the legal definition of total return is. It isn't a primary concern to me.

    The only thing that concerns me is knowing how much I need, when I need it, and knowing that it will be there, even if it means I have to save more than originally planned.

    I apologize if my tactics and results don't meet your goals. I'll try to do better in the future.
    Aug 11 11:32 PM | 7 Likes Like |Link to Comment
  • Kinder Morgan Has An Ace In The Hole [View article]
    Kinder is no longer going to be a MLP. Everything is going into KMI. I am going to keep KMI in it's entirety as Kinder has announced he will grow the dividend at 10% per year out to at least 2020.

    That works for me!
    Aug 11 11:16 PM | 5 Likes Like |Link to Comment
  • Dividend Reinvestment - Yes Or No? [View instapost]
    I think Scottrade has a similar plan called FRIP. I don't know the particulars as I don't use them. I've read comments by others.
    Aug 11 11:13 PM | 1 Like Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    >>> The thousands of people following this author, who think looking at S&P Capital IQ or Google Finance or MSN Money for 5 minutes is the right way to evaluate individual equities, need to ask themselves a few basic questions..... <<<

    I can't speak for the thousands of others because a lot of them may share your view about the research Chuck puts into his personal selections, and you and they would be wrong.

    On many occasions I have read where Chuck does quite amount of research on a company in order for it to make his watch list. I do the same thing.

    Once the watch list is put together, Chuck is showing how he looks for value using his service and other various sources, but only after the due diligence has been done.

    You probably haven't read all of Chuck's articles and that's probably why you came to the wrong conclusions.
    Aug 9 07:03 PM | 17 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    Miguel, it's a matter of timing with regard to cap appreciation.

    As a dividend growth investor, I expect to show cap appreciation on par with the market or better over a longer term period. I don't expect to see my portfolio value rise every year or keep up with the market every year.

    I do expect my income to grow every year though.

    Some times growth and income are on the same page. At other times they diverse and it's those times where one needs to decide which is more important, the growth or the income. If it's growth, they may have to start liquidating positions to protect principal, or use some form of option trading.

    If income has priority, one has the luxury of doing nothing except collect the income and decide how to spend it.
    Aug 9 04:18 PM | 3 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    R.J. price may drift but that dividend isn't going to drift and I'm betting the dividend growth will continue.

    There's is a significant difference of opinion from those concerned with cap appreciation and those concerned with dividend growth.

    IBM may continue to lag the next few years yet still be able to grow the amount of income this asset creates.

    There's a big difference between a growth & income strategy as opposed to an income & growth strategy.

    I'm looking at income & growth. IBM would qualify under that criteria as a buy right now. If I were looking at growth & income, maybe it wouldn't qualify from a timing aspect.

    A drop in price to $170 is only an 8% draw-down, hardly anything to shudder about, but certainly good enough to add to the position if purchased today. Anyone looking to hold this for the long-term would hardly know the difference years from now.
    Aug 9 01:33 PM | 2 Likes Like |Link to Comment
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