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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (29456)	12/28/2007 3:08:03 PM
From: E_K_S	Read Replies (3) of 78748

The drug stocks in the IRA pay good dividends so I continue to hold. Last year I sold some BMY and added to my MRK at much lower levels. 25% of the IRA is in the S&P Index and no one individual stock holding (other than CVX) accounts for more than 4% of the IRA portfolio. 12% of my IRA is made up three drug stocks; PFE, MRK & BMY. Since I have a long time horizon (25 years), I believe the drug sector will achieve at least a 10% compounded growth rate over this period. The baby boomers will need and use drugs. My IRA growth goal is 10% compounded growth. The drug stocks average 4% annual dividends and only need to contribute 6% annual growth to meet my 10% growth target. I use the dividend income to buy other stocks or add to my current holdings. I no longer contribute to my IRA as I do not generate "earned" income so I rely on dividend income streams to fund new purchases in the IRA. So far, my drug stock holdings have generated a good dividend income stream and MRK and BMY have actually exceeded my growth targets. EKS

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