Have I Been A Successful Investor? What Constitutes Success?

Includes: AGNC, ED, KMR, MO, PSEC
by: Dividends#1


A few comments have questioned my credibility and success as an investor. I have written this article with the hope that other investors will question themselves regarding their own success.

At the end of the day it is up to each of us to determine who is credible and who is not credible. We can't see each other's portfolio statements.

I write my articles with the intention of motivating other investors to scrutinize their own portfolios and investment decisions. I am constantly looking for ways to improve my portfolio.

Although I write under an anonymous name I feel as though my signature is on every article.

This article will address my critics regarding my past results. My future results will be more important. I will no longer address questions regarding my past. The future excites me.


I am very conscientious regarding most of the important aspects of my life. There are many important things to value in one's life. For instance health, relationships and finances. I will focus on investing and finances since this is the Seeking Alpha forum. I write articles because it keeps me on my toes by forcing me to question every decision I make regarding my portfolio. It keeps my mind sharp and stimulates me to constantly question every move I make. I am rigorously searching for ways to improve my portfolio. I also write articles to help other investors evaluate their own portfolios, question their investing decisions and become more vigilant regarding the construction of and allocations within their portfolios. I would also like to see more young investors save what they can for retirement and take responsibility for their future. I hope to inspire many to become long term dividend stock investors. Hopefully some who read my articles will learn something that makes them a better investor.

One of my goals is to achieve a respectable portfolio performance that is documented here at Seeking Alpha. My personal retirement portfolio will be tracked in real time. Another goal of mine is to increase the dividend income generated from my retirement portfolio.

What are my plans regarding my portfolio going forward and how will my actions improve my probability for success:

1) I am a strong believer in holding the majority of my money in a Roth IRA. Currently I have 73% of my retirement funds in our Roth IRAs. I have been doing Roth IRA conversions since 2010. I plan on doing another Roth IRA conversion in 2015. After the planned 2015 Roth IRA conversion is completed, my approximate retirement allocation based on today's values will be 80% in the Roth IRAs and 20% in my SEP IRA. I am willing to pay a large tax bill that I will incur and bite the bullet now (ages 55-57) in order to collect tax free dividends for the rest of our lives from our Roth IRAs. I believe this will improve my probability for success. I realize that Roth IRA conversions are not for everyone. Please consult a tax expert to decide what is best for you.

2) I recently sold a portion of my KMR position in our taxable account. I will not owe any taxes on the significant KMR gains due to past carry forward losses which will offset the capital gains tax.

My plan of action regarding my large cash position is: I will use a portion of this cash to pay the taxes owed for the large Roth conversion I did in 2014 and set aside enough cash to pay the taxes for my planned 2015 Roth conversion. The rest of the cash will cover our living expenses for at least 6 months and probably longer depending on how many vacation trips we take. The KMR windfall was a real big win for our retirement and portfolio strategy. If I see a compelling opportunity to buy a stock that I determine is significantly undervalued I will use my cash position to purchase it.

3) I hold 5 stocks in my retirement portfolio. I hold (NASDAQ:AGNC), (NYSE:MO), (NASDAQ:PSEC), (NYSE:KMR) and (NYSE:ED). ED makes up .5% of the portfolio, since it is such a small fraction of our portfolio I will look to add over the next several years. I am considering to build up ED to represent 10% of the portfolio. This will reduce our income, however, it will decrease the risk to some degree. This is a long term plan, so I am not in a rush at this point. I have to weigh all the potential factors.

4) The current dividend income generated from our retirement accounts exceeds our current expenses. My plan is to reinvest all the dividends until I am 59 1/2 years of age. We will sell shares in our taxable account after our cash runs out in order to meet our living expenses. I think this plan will improve the probability of our retirement's success. My goal is to generate 1.5x our needed expenses from our retirement accounts in the form of dividend income. I know the dividends fluctuate regarding AGNC, so I want a cushion for when they eventually will drop. At this point in time, I see AGNC's dividend increasing, however at some point in time they will decrease. I will regularly assess AGNC and determine the best entry and exit points and how large a position I will hold at any given time.

5) I had substantial losses in my taxable account during my internet trading days. Fortunately, my retirement accounts have had significantly more gains than the losses in my taxable account, to the tune of at least 4 fold. I have come to accept my trading losses as the price I had to pay in order to learn a valuable lesson. I was forced to explore other investing strategies that were less stressful than trading and which would improve my chances for a successful retirement. After reading many books I decided to become a dividend stock investor. Not too long after I made the transition from trader to dividend stock investor I found Seeking Alpha, where my dividend investing strategies blossomed. The informative articles I read by Seeking Alpha authors helped shape my unique strategy.

Comments from my critics:

I have decided not to quote my critics. I did not want to offend anyone. To sum up their criticism of my past portfolio's success, they cite that I still have a large carry forward loss. They also cite that I have no cash position and that I apparently did not recover from the financial crisis.

My intention is to present a clear picture of my past investing history.

My response to my critics:

In my first article regarding my portfolio which can be seen here, I stated:

In 1996 I started to day trade in a brokerage account, then in my Retirement accounts with new contributions. At first I did extremely well. I eventually lost a substantial amount of money in my taxable brokerage account trading internet stocks. Fortunately, I did not suffer losses in my Retirement accounts. I was more cautious in my Retirement accounts. From 2003-2008, I did not trade, I just kept adding to the three mutual funds. A bull market did wonders for my Retirement accounts."

{It is clear from my history (written in my previous article) that my retirement accounts performed well}.

Below is another quote from the referenced article above:

"In late 2009, all my Retirement accounts were back to even and I sold all my Freeport-McMoRan (NYSE:FCX) and Apple (NASDAQ:AAPL). I traded in 2010 and had a very good year".

{All the losses from 2008-2009 were restored to even in my retirement accounts by late 2009. How many people were whole from the financial crisis a year later}? I was fortunate to be restored to even so quickly.

1) Having carryforward losses from 14 years ago in my taxable account does not preclude me from being a successful investor. For example, if my carry forward losses are X in my taxable account and my realized and unrealized gains in my retirement accounts are 4X, does that make me unsuccessful?

2) My critics do not know the value of our accounts (taxable and retirement accounts). I stated in my previous article: "The purpose of this article is to be accountable going forward. I want to demonstrate how my retirement portfolio will increase the current income over the next four and a half years. At that point my goal is to collect enough dividend payments to meet our living expenses. The non retirement portfolio (taxable account) is listed below for completeness; however, I will not be tracking its performance.

My entire retirement portfolio is listed below with my allocations. I will not disclose the actual value of my retirement portfolio. It is not needed to track results. I am going to use $1M for simplicity sake to represent my retirement portfolio in order to track future results".

Since the commenters do not know the value of our accounts, how can they come to any conclusions regarding my success or failure as an investor is beyond any reasonable person's logic.


I am not the best investor. I consider myself an above average investor. Seeking Alpha has helped me to become a better investor.

I was holding a large position in KMR (prior to the Kinder Morgan consolidation into KMI) in my taxable account which I disclosed in my prior article. I also wrote an article about KMR prior to the consolidation titled Why I Love KMR More Than KMP For High Dividend Income. I would have to say my success here at Seeking Alpha has gotten off to a fabulous start.

Some commenters have accused me of not being a successful investor. I have to wonder how successful my critics are? I think that Seeking Alpha can be a wonderful resource that helps investors become better investors. I know Seeking Alpha has helped me immensely. I encourage everyone to help each other to become a more successful investor. The more I can be of service to others the better my life is.

I will not address any future comments that misrepresent my past investing history. It is a waste of my time, and therefore I will refer them to this article.

I look forward to continuing my successful investing results here at Seeking Alpha and helping others to be more successful. I want to help them to make better investing decisions. Each investor must take full responsibility for their decisions and investments.

My portfolio performance has been excellent. Here are my results: 2014 YTD total return of 34%, 3 year average annual total return of 18% and a 5 year average annual total return of 17%. These returns are rounded.

I realize that I left myself open to criticism by presenting my past history in my articles and disclosing my retirement portfolio for all to see. I have dealt with the criticism as best I can and will now move on to investing in the present.

On a dividend investing note, I am looking forward to MO announcing a dividend raise tomorrow. My projection is $2.06 - $2.08 a share. I am leaning towards the high end of this range. I have written a previous article regarding the anticipated dividend increase.

Addendum: I correctly projected MO's dividend increase, they raised it to $2.08 today 8/21/2014.

Disclosure: The author is long MO, AGNC, PSEC, KMR, ED.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Final Note: This is my portfolio. I am not recommending anyone buy the stocks I own. Please do your own due diligence to decide what investments meet your individual goals and income needs. I take 100% responsibility for my decisions to buy or sell stocks and for managing my portfolio. I advocate all investors do the same with their investments and portfolio. Each investor's BUY, SELL, or HOLD decision is based on one's risk tolerance, time horizon, and dividend income goals. My personal recommendation may not fit each investor's current investing strategy.

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