First off, I don't consider this my thread, I just came up with an idea, so I get the job of moderator. Since everyone here is a grown up it is a piece of cake. :) Thanks to all!
I can see both sides of this point, however I think a lot depends on each individual, what they want to accomplish and how involved they want to be.
I traded 100 shares of O a while back for 300 shares of CPLP and change. In a retirement account, taxes don't matter. When not in a retirement account, gains need to be adjusted.
Although yield on cost is nice to figure, income is my bottom line.
With my daughters, it is more or less picking two stocks per year and setting up automatic reinvestment. No plan to trade anything.
A lot of people don't figure yield on cost correctly imho.
On 2/23 I bought my youngest 40 shares of WM @ $32.64. The previous dividend was 1.16, 3.55%. The new dividend is 1.26, 3.86% yield on cost.
Not so fast. $13056 invested, with now 41.10 shares @ 1.26 = 3.96%.
True, not much difference yet, but she has only recently received her third dividend. How about in thirty years?
You can't leave out the compounding when figuring yield on cost. |
