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Strategies & Market Trends : Young and Older Folk Portfolio
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From: chowder5/20/2021 2:29:17 PM
2 Recommendations

Recommended By
lizardK
Menominee

  Read Replies (3) of 21917
 
Re: T ...

AT&T shares are 1.9% higher following a note from Raymond James calling it a buying opportunity, seeing retail investors (predictably) bailing out due to the dividend cut.

“The current downdraft is a premature and misguided rebalancing of yield-oriented portfolios, in our view, and investors should take advantage of the pricing dislocation,” the firm says.

Softening the blow of the dividend cut: It's likely at least four quarters away, the firm says, and investors are getting a piece of the new Discovery as well.

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From my perspective there are several ways one could manage this position.

One does have a year to get out of the position if they wish before the dividend cut takes place.

One can use the dividends to add to other high yield assets to offset the dividend cut. If one doesn't mind owning CEF's a couple of utility CEF's in the utility sector have high yields and these funds hold high quality utility companies and utility bonds.

DNP ... yield 7.48%
UTG ... yield 6.25%

One can purchase a company like MO with its 6.96% yield.

Or, one can add more T shares and increase the income now and offset the expected dividend cut a year from now.

One doesn't have to take an income hit if they don't wish to.

My intention for now is to keep T and add to CEF's with the T dividends. I will be increasing the dividend flow, not taking a cut.
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