| | | My concept of diversification means having both sorts... the JNJs as well as the Ts/VZs and even an APU (8%-9% yield, but not much growth)... one of my best total returners is LMT -- not a big yield, but a steady total return with divvy growth not off the charts and share price appreciation doing very well... GIS is another one like that, but I've been thinking of switching it out for another ute because I don't know if cereal will survive the current diet trends... MMP is still by far my biggest total returner as well as very good divvy and growth of both... my traditional power utes are all throwing off steady 15% total returns (±2%) with less than eye-popping divvy hikes, but decent steady ones coupled with decent steady share price returns, too... lately, my star performers has been WPZ, currently showing 80% annualized total return as well as sporting a 10%-11% divvy (no divvy hikes in this oil bust, but still)... WPZ is my spec play and likely not a LTH, more like a swing trade with income attached -- probably will be gone from my acct in 2-3 years... I don't like swing trading any more and especially with an MLP, but the opportunity was just more tempting than I could resist and so far, so good -- but with trailing stops.
So yeah, a lot of it depends on the times, when individual stocks are bought (and how much paid), etc., but I think a case can be made -- esp. in without being able to predict the future with any certainty -- to own different sorts of divvy stocks and mix them up... one sort (or sector even) seems to do well at unexpected times while others don't... sure, I'd like to see better performance in both share and divvy increases in a few like KO, PG and JNJ, but then ones like GIS or KMB or RTN just blow up (in a good way), crashing their yields... MCD was good, then bad and now good again...
And this year, despite getting regular whacks from the "FED fears/bond rates worshipers", my triple net REITS (O, NNN, WPC) have been outperforming everything... the healthcare REITs are a mixed bag, i.e., for every OHI, there's an HCP... next year or so, I expect my energy divvy plays (CVX, OXY, EPD, MMP, etc., as well as some on my watch list for bust/bottom) to outperform the rest... I'm calling WPZ my spec play with a nice divvy while I wait... I still own a big slug of LTS-A in an acct. that gets no new cash, along with my remaining PSEC, both playing their roles quite well -- just have to hold my nose when I look at PSEC, but the divvy is still quite good and looks sustainable at this level... I don't even look at LTS-A's share price... looking at chart, it's been a lot more volatile than I expected when I bought at 23.99 on ave., but plays its role exactly as I want it too.
I don't see the stock selection in this sort of PF as a binary decision tree... I see it as a range of options and want to own some of each "flavor" and see where the chips fall... with one or two missteps (MHR-D cost me almost 2% of my PF acct. value by going to zero, and even that didn't hurt as much as the lost divvy income, but also easily replaced -- and I could have avoided it all if I'd followed my own rules on stop/losses).
There's no absolute right way to do this -- what is absolutely perfect today may be superseded by some other "flavor" when conditions change. My only problem at the moment is that the names I'm really interested in adding all look expensive on a relative level, meaning I have to work harder to try to separate the ones that are over-priced at the moment from the ones that are just that strong and may be at 52-wk highs, but will likely continue upwards (as long as the divvy increases match that pace upwards).
What works for one of us? Not so much for others of us... but for me, I sleep well at night by mixing it up inside the PF.
Good luck! Your family and friends are lucky to have someone willing to work hard at assembling their future income streams! |
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