I have an investment question and would be happy to hear all opinions.
In last year's fourth quarter (but way too late), I made the first sale ever from my dividend growth portfolio. I sold all my Chevron for the purpose of harvesting a tax-loss, thinking I could buy it back this year at the same or a lower price. Due to my poor sale timing, CVX still needs to decline a little more before I can feel better about my strategy, but my primary goal was to accumulate some capital losses.
So, my question is: Is it totally insane to be thinking about buying back a company that is forecast to have a 60% decline in profits this year and just a mediocre outlook over the short- to medium-term? At the same time, the sources I use for my outside opinions (Value Line, M*, and Fidelity) are all at least slightly to moderately bullish on CVX.
My goals (or goal) is to create and maintain a not aggressive portfolio of stocks that, most importantly, create a growing stream of dividend payments. It does not have to grow a lot--just beat inflation by some in most, if not all, years. Last year, I beat inflation by more than 4&1/2 percentage points, and I consider that a roaring success.
I am not super sectorally oriented, so I do not feel I must buy an oil. I already have a bit of COP, but COP + CVX would give me closer to a market weight in energy. Although I look, I am "scared" of some of the high-yielding energy operations, because I understand them very little. Plus, no LLPs or Reits for me. Everything is in taxable accounts, and I don't want to deal with the complexities of MLPs, etc. Plus, they do not, is my understanding, generate qualified dividends, which is very important to me.
Stocks I have been thinking of as possible replacements--with very little "due diligence"--are EMR, PAYX, ABBV (although that would well overweight me in pharmaceuticals) and even JNJ, which I know is facing some challenges, but it has been accomplishing exactly what I want--healthy dividend growth and modest risk. I already am overweight on JNJ, though.
In summary, does it make sense to rebuy CVX, ideally around 100, or should I be looking elsewhere? All opinions and questions welcomed.
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In response to Steve's last post, let me say that as of 2012, I was nearly 100% (no diversification) in AAPL. I sold everything, which I had accumulated over about 23 years, because 1.) I thought AAPL was high; 2.) I wanted to convert my PF to dividend growth (which, ironical, AAPL now is); and 3.) and most importantly, I believed the 15% max tax rate on capital gains would be the lowest we would see for some time to come, if not forever. No one likes to pay taxes, but, for me, it's not always about avoiding taxes--which I could have done by not selling, it's more about managing your taxes. But that's just me.
Thanks in advance to anyone who takes the time to read and respond.
Kip |
