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Strategies & Market Trends : Dividend investing for retirement
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To: Triffin who wrote (6787)12/16/2010 8:30:43 PM
From: chowder  Read Replies (1) of 34328
 
I took my loss in BP and moved on. I don't recall if I shared my story here or not, my short term memory is well ... short!

I decided to hold BP as long as they paid the dividend. I was willing to hold out. The company declared their next dividend, so I felt comfortable holding the loss.

Our government stepped in and forced BP to eliminate the dividend. They had the resources to pay the dividend and the cleanup but the decision was made to eliminate the dividend.

I sold my position at a 50% loss.

Sounds like a lot, doesn't it?

At the time I was holding 25 positions and BP only represented 4% of the portfolio value. I only lost half of that.

My portfolio yields 4.8%, so I was able to make up the loss in very little time from dividends alone from my other positions.

I did keep BP in my son's portfolio though. At 25 years of age, he has the time for it to come back, I don't. He is currently down 18% on his position.

His BP position, like mine, represents 4% of his portfolio. His loss at this time represents less than 1% of his portfolio value.

This is why I like to own more than 25 stocks in a portfolio and diversify. I like the downside protection. Protect the downside and the upside takes care of itself.

I suppose we can all do better but I'm very happy with how I have managed our accounts to date. We are all at all time highs.
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