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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Kip S who wrote (3563)	1/31/2010 5:30:21 PM
From: Paul Senior	1 Recommendation Read Replies (1) \| Respond to of 34328

"...if you ignore current yield, you are ignoring an important input into the decision-making process and are likely to end up with suboptimal results." Yes, we do not disagree. My points though are, 1. Suboptimal might turn out to still be very good indeed. Making contributions over a working life to a few aristocrat-type dividend stocks, reinvesting dividends -- that could and I hope, should, lead to a pretty decent retirement nest egg. 3. Suboptimal imo is okay given there's a continuum of choices. Imo, it beats one choice for young people which is to stay out of stocks completely and have only government bonds or something. And for somebody who's got a working career ahead of them and who has no interest in stocks or investing, yet who also has a few aristocrats which they hold, add to, reinvest in, that should work out okay for them too. Okay might be suboptimal, but okay might be sufficient. ==== I understand all to well that some of these supposedly good stocks don't work out well. I've been in BAC since '98 with a sell in '09, so that's one that's not worked out for me. Having several aristocrat-types should overcome the occasional clunker. Somebody could have as many as Steve Felix (or me), but then again, if we're talking about people who wouldn't be reading this thread and have very little interest in stocks, it's like forcing them to consider things they don't want to know about -- how many stocks, which, should I switch around, how much to contribute to each, and so on. I've no real solution to this. Maybe trying to look ahead twenty years like Mr. Buffett, companies that'll still be around (maybe) and doing okay (maybe) as the world economy grows (maybe), I'd say maybe Colgate and Proctor&Gamble for their consumables, maybe XOM (Total (TOT)?) for oil, Nestle for food, Pepsi (beverages and snacks). I suppose foreign companies too (but then again, if the person isn't interested in business or stocks and is a USA citizen, maybe just sticking with USA-based aristocrats). ==== Lot of this could depend on what stocks are chosen and how long they are held. If you look at my postings around here and believe what I say I am doing, then you know I'm in the market pretty seriously or stubbornly (maybe not wisely though). Trying to do well in the market is unlike trying to do well in any other endeavor (imo). Whereas in most things, the more you learn, the harder you try, the better you expect to do. The market's pretty perverse though. I have to believe that watching what I'm doing, switching at appropriate times - or at least trying to switch among investment at what seem like appropriate times ---I have to do better than someone with no experience who just keeps a handful of aristocrat-type stocks, contributes to 'em maybe once a month, and goes on about his/her life without concern for stocks. That has got to be suboptimal, certainly compared to what I'm doing. Ha Ha. I wonder. In 1974, I did have $20k to invest. I just wonder if I had just plopped it all into XOM,just left it there, just reinvested dividends, how that might compare to where I am now. It'd be $600K plus the reinvestments. And if I used margin? It would have turned out better than any personal residence I bought. And, sigh, maybe a couple ltb&h like that may have worked out as well or better than all my buying/selling/studying/efforts/posting/ that I've done since then. So yeah, for my sanity I certainly hope just buying a few aristocrats and holding on to them is suboptimal- suboptimal to what I'm doing anyway. -g- Not so clear-cut though.