I am a retired investor with market experience going back to the 1960s. I was a software engineer for 42 years, and currently do some part-time consulting, which lets me contribute to a Roth IRA. I am not an accountant and not a financial professional. My wife and I have established a set of guiding principles for our investment life: • Change is the only constant in life. Everything in this plan is subject to change. • Never touch your principal. Wealth is built and maintained by not spending it. Wealth is the primary buffer between ourselves and blind chance. • Exploit folly, do not participate in it (thank you, Chuck Carnevale). Do not follow the crowd, which is more often than not wrong. • A portfolio is like a bar of soap – the more you touch it, the smaller it becomes. Do not be a trader. • Own assets, avoid liabilities. Assets generate income. Liabilities generate expenses. Based on these principles, we have established two investing goals: 1) sufficient current income with a comfortable buffer, and 2) increasing future income to maintain our buffer. Our primary investing goal is to generate sufficient current income to cover that part of our living expenses not covered by pensions, with a comfortable buffer. We are retired and depend on investment income to meet a significant minority of our living expenses. As we age and get closer to the end, current income becomes ever more valuable, and future income becomes ever less valuable. This reality informs all of our investing decisions. However, we know that inflation will cause our income needs to rise, so we also plan for increased future income, which is our second investing goal. To meet our current and future income needs, we rely on 2 Social Security pensions, 1 private pension, income generated by investments, and fully paid up long term care insurance. It is common to allocate a retirement investment portfolio with some percentage in stocks and the balance in fixed income, such as 60/40. We look upon our pension income as the equivalent of fixed income, with the added benefit that Social Security is indexed to the CPI. In the past we owned no fixed income and had no plans to do so in the future. The future has arrived and we have discovered baby bonds and preferred stocks, and we like the higher current income we can get from these investments. We have therefore started to redirect some of our investment capital into these investments, and as a result our investment income is now greater than it would have been otherwise. We categorize dividends and interest as income, and capital gains as return of capital, not income. Therefore, our goals are to be met from dividends and interest only. Investment income currently meets our primary investing goal. We invest in a blend of mostly medium yield (3%-6%) stocks with medium dividend growth, a few high yield (>6%) instruments with no dividend growth, low yield (<3%) stocks and funds with high dividend growth. and fixed income securities with yields in the range of 5%-8% with no growth. We expect our medium yield and low yield stocks and funds to provide the income growth needed for the future, our second investing goal. We currently own common stocks, preferred stocks, and bonds. Our portfolio requires regular attention to avoid possible dividend cuts and deletions. As we age, our mental faculties are in decline, and we will become increasingly less able to perform portfolio monitoring intelligently. There will come a time when we will need to use some form of income oriented index ETFs to carry the income generating burden. We want to behave like landlords and collect rents, but without the risks and demands of owning real estate directly. Dividends and interest are our rental income, and as once-removed landlords we expect to own real estate investment trusts (REITs). We want our non REIT income to be generated by long-lived, steady companies that provide products and services that we all need regardless of the economy, and thus can be relied upon to provide steady, and steadily growing, income. This requirement points primarily at consumer staples stocks. We own some of the best consumer staples stocks, such as mighty MO, and plan to own one or more ETFs that concentrate on the consumer staples sector of the S&P 500. Our preferred shares are almost all in the REIT sector. • Some of my investing history During much of my working years I used technical analysis (TA) to invest in individual stocks (I was an early fan of Joseph Granville and I bought an Apple II in 1980 because Granville brought out OBV software for the Apple at that time), and I speculated with short selling and commodity trading. Later I invested in stock mutual funds and ETFs for total return, with inconsistent results, and no comprehensive plan. Being a software engineer in a lead position left little time or energy for serious investing skills development. In 2005 I had pretty much given up on getting market beating results, and felt that I was getting too old and too close to retirement to continue swinging for the fences, so I decided to buy a variable annuity that guaranteed a minimum return of 6% per year, compounded, with the upside limited only by the performance of the mutual funds offered for investment. I decided to let the insurance company bear the market risk for me. I also had a 401k plan at work to which I contributed the maximum and got the company match. A year or so before 2008 I used a retirement investing projection tool provided by Fidelity, which said the worst returns I could expect in retirement were positive but not spectacular, and the best were hard to believe. At that time I was invested in mutual funds and ETFs through my 401k and the variable annuity and had not directly owned stocks since shortly before the start of the great bull market in 1982 (Granville famously missed the whole thing). I thought, with a bit of skepticism but not much, that I was set. We all know what happened in 2008-09. That experience put me off Monte Carlo simulations and Modern Portfolio Theory for life. When I retired I converted my 401k to a rollover IRA brokerage account and invested in ETFs. I thought I was being appropriately conservative but also ready to capture capital gains by investing in VIG and VCSH. Then I found Seeking Alpha, and then - thank my lucky stars - David Van Knapp, and the DGI light went on. I had spent most of my adult life thinking I was smarter than most people by relying on TA, and then later letting the insurance company assume market risk. I remember learning about the 200 DMA when I was in my 20s, which is a long time ago, and thinking how revolutionary this idea was and how I should be able to use it to my advantage. Fortunately for me and my family, I also was pretty good at software engineering, so I had a reasonable retirement nest egg accumulated when the time came. With the concepts and methodology of dividend growth investing, I now have sleep well at night investments that just keep on churning out increasing income, something that could never be said about using TA. I started with DGI too late in life to commit totally to low yield, high growth stocks. I hope to capture the double compounding of DRiP investing with that part of my portfolio that is low yield, high growth. We have recently (Nov 2014) rolled over all of the variable annuities into brokerage accounts. We now believe that we can get sufficient income from our dividend investing strategy, and we want to retain ownership of the annuity capital. • Tools and Teachers Tools I use include the CCC list, F.A.S.T. Graphs, Morningstar Premium, BigCharts, the EDGAR web site, longrundata.com, and Excel. I get ideas from the many informative articles by (among others) the following (in no particular order): Chuck Carnevale, Brad Thomas, Ron Hiram, David Van Knapp, David Fish, Robert Allan Schwartz, Dividend Growth Investor, Dividends4Life, David Crosetti, Tim McAleenan Jr., Reel Ken, Bret Jensen, Alan Brochstein, Chowder, Dane Bowler, Bob Wells, BDC Buzz, Scott Kennedy, Bill Maurer, Darren McCammon, Richard Shaw, Bruce Miller. Favorite commentators who are not yet authors include Elliot Miller, Paul Leibowitz, mbkelly75, surfgeezer. Useful shortcuts to dividend stock valuation are the Tweed Factor and the chowder rule. Like F.A.S.T. Graphs, 'a tool to think with', these are 'rules to think with'. Tweed Factor: fair P/E = yield + 5 year dividend growth rate chowder rule: current yield + 5 year DGR >= 12%; 8% for utilities, MLPs, REITs The best investment advice outside of Seeking Alpha has been 'The Intelligent Investor', ‘Securities Analysis’, and 'The Single Best Investment'. • Some historical portfolio stuff My DGI portfolio was started on 2011/4/20 with CTL, which I have since sold. It was a beginner's mistake. Subsequent mistakes were MLPs, and to a lesser extent, mortgage REITs. I did not allow for any circumstance that could cause WTI to fall as far and as fast as it has, so I lost money on MLPs. The prolonged flattening of the yield curve, plus the persistent markdown from NAV for the mortgage REITs, has made these unappealing as long term investments. Now I keep my distance from anything that is dependent on commodity pricing, and I invest very little in the carry trade. A glaring mistake was selling JNJ when it languished for several years. • Some ongoing portfolio stuff The target dividend growth rate for our entire portfolio is 5%. I use yield on cost to allocate our investments so that each position in aggregate generates approximately the same amount of income. I learned the basic method for doing this from a comment on a SA article. SA is a wonderful resource! I have published an SA Instablog that describes the method: http://seekingalpha.com/instablog/902946-be-here-now/4581516-portfolio-allocation-for-equal-income-from-each-position-using-excel • Current portfolio: equity REIT: CCP, DLR, EPR, HTA, LTC, O, OHI, STAG, VTR, WPC consumer staples: GIS, MO, PEP, PM financial: GBDC, GSBD, HTGC, MAIN, TCPC healthcare: JNJ baby bonds: HTGX, NEWTL, TCCA, TPVZ utility: T preferred: AGNCB, DFT-C, GAB-G, GGZ-A, HT-D, PSA-C Prospective additions: consumer staples: RHS, XLP equity REIT: ESS, SKT Technology: ADP, MSFT Industrial: APD, MMM, RTN baby bond: ARU, MSCA, TCCB, VTRB preferred: DLR-G, STAG-B, VER-F
Individual investor. Generally using index Mutual Funds or ETFs. Trying to diversify more (foreign in particular). Pick up tips & concepts, & learn more.
I'm at alpha to keep a finger on the current moods & predictions... and so I notice up coming big financial news events before they impact.
See you around! Feel free to write me!
I am 40 and would like to retire before 60. I am fortunate to work for a state government and I am vested in their pension. So, I am set when I turn 60+. Because I don't have to worry about saving for a normal retirement age, I have been able to put almost all of my savings towards the goal of early retirement, by investing in a taxable brokerage account.
Retiree who took cash instead of pension in year 2000. Over the past 7 years I have been gradually switching my portfolio over to dividend stocks. Long in: T MO BMY DUK EPD KRFT PM SEP SE CVX CL BRK.B JNJ PFE VZ GE KMB C BLK BIP INTC VNQ SDY XOM.
Professionally, I have done a bit of everything in my long life, from playing rock and roll, to developing software, and running a successful entrepreneurial business. But I am best known as a writer of bestselling books about business and health. I write under a pseudonym here on Seeking Alpha because that way I know readers will evaluate my work strictly on the basis of what I actually said rather than who I am.
Born 1946, former major US Army Reserve. Westminster College, BA, Business-Economics, 1967, Duquesne U. Law School, 1973, Wharton School, U. of Pa. 1975. Worked as attorney with transportation, public utilities and energy law practice for various employers for 35 years. I had numerous investment ventures in petroleum exploration and production over 30 years. I am a member of the Society of Petroleum Engineers. I've been around the financial services industry over 50 years. My Mom was a broker (registered rep) in the 1950s. I opened my first brokerage account in my own name in 1967 at the former "Harris Upham" firm. Since mid-2007, I am a semi-retired businessman and investor . For a more detailed "bio" see "Who's Who in America" 1997 to present.
I've been interested in business and the markets for over twenty years. I've done all right, but it took me a ridiculously long time to realize that I'd made far more money from investing than I ever had from "trading."
It turns out that investing boils down to five simple words: buy right and sit tight. Buy great companies (when they can be bought at a good discount), and hang in there until either the earnings dry up or the stock becomes significantly overpriced.
You don't plant a tree and then uproot it just because a branch fell off, or because you think winter is coming. You just stand back and let it grow. (On the other hand, if someone comes along and offers you a thousand dollars for a tree that's only worth three hundred, sell it to him and buy some good saplings with the money.)
The paradox of investing is that tomorrow's price doesn't matter. Value matters. Focus on today's value, and tomorrow's price will take care of itself.
Focused on upcoming retirement (4-8 years from now). Seeking a portfolio balance of stable dividend growth stocks and capital growth potential stocks.
Professional Background: Business Insurance Underwriter (Property and Liability) and University Risk Manager.
Biotech & Health Care: JNJ, CAH, MDT.
Consumer Staples: MO, CVS, KHC, MCD.
Consumer Disc: DPZ, FIZZ, MNST, STZ, SBUX,
Tech: GOOGL, AMZN, FB, MSFT.
Small Caps: MGPI. (produces grain for hard liquor manufacturers)
Industrial Cyclical: LMT, RTN, BA.
I am nearing retirement and employed in the explosives industry in a global marketing function.
I am following several different strategies from seeking alpha contributors. I also have a rollover account that I have managed by an independent professional group. I like the idea of blending different strategies of various individuals combining all assets classes. As we all know diversification is the key to success and knowing which assets class to be invested in at the right time.
I need a portfolio that combines stability but growth to keep up with inflation and not out live my nest egg.