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Strategies & Market Trends : Dividend investing for retirement
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To: Steve Felix who wrote (6366)11/11/2010 11:43:54 PM
From: E_K_S  Read Replies (2) of 34328
 
Steve -

Re: Portfolio management

Here is a custom YAHOO display I created to determine what stocks in the portfolio I might want to peel off shares from that have had large moves YTD (Pct from Yr Low). I put in your list of stocks so you can view the fields in the table below. 
Symbol	Trade  	EPS (ttm)	P/E	Div/Shr 	Yield	  Pct from Yr Low	50d MA	  200d MA

I try to buy new positions below the 200d MA and sell above the 50d MA especially if the PE gets too high (PE>14). These positions become potential sell candidates.

finance.yahoo.com

For example, I sold a large portion of my MPW bought earlier this year around $9.50/share. Booked a 35% gain. Reduced my holding to a .5% portfolio position.

Your MCGC might be a candidate for a sale especially if you are approaching the YTD gain of 83%.

I have a lot more positions where the dividend yields are now only in the 4%-5% area but sit on large capital gains. If the position is not a dividend grower, then these become candidates for sale to be moved into either (1) a better dividend grower w/ equivalent yield and/or (2) a dividend/income producer that spins off a better than average yield w/ low risk profile.

My #2 candidates now are preferred stocks and some MLP's.

I have limited my exposure in the portfolio to no one position greater than 6% of the portfolio (I own one in this category: BHP). Many of my top 10 positions still represent 3%-5% holdings. My average full position size is about 2% of the portfolio. Most new positions start out at .5%. I will usually build to a 1% or 2% position and let it grow to a 4%-5% position. I will then peel off shares and put the proceeds into new dividend growers or special situation stocks.

I average into new positions and try to buy on dips, company specific news & events and ex dividend dates. I am also turning over the portfolio a bit more. My average holding period is down to about 3 years from 5 years. Most of my top 10 holdings I have held for 10 or more years.

This year I took profits on GOV and MPW which netted me greater than 30% returns even though their dividend yields were still quite high (>6%).

Finally. I started a position in EDE earlier this year when it was yielding over 7% (stock was $17.5/share). I sold the December $20 call to lock in a 25% gain. The stock should be called away in December as it now trades around $22.00/share and yields 5.74%. This one will be let go and the proceeds will be put into something else in December.

I generally do not like to trade my dividend payers but when I can book 30% in 12-18 months and the stock is more than fairly valued (14PE or higher) and/or high payout ratio and/or low dividend grower, I will reduce or eliminate the position.

I always seem to have other dividend growers to invest in.

Hope some of this helps you or others when setting up your portfolio and managing your dividend income.

EKS
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