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

To: Steve Felix who wrote (5344)	8/10/2010 7:56:46 AM
From: chowder	Read Replies (1) \| Respond to of 34328

Like you, I went with higher yield, slower growth first. I wanted a specific income number to start with and now I'm buying lower yield, higher growth rate equities in order to offset inflation. The withdrawal rate is easy for me! It's whatever my dividends produce. That's why I'm focusing on Aristocrats. I want companies I can count on. So far this year, I've had one dividend suspended (BP) and nine others that raised their dividends. It took a catastrophic event to get BP to stop the dividend temporarily, otherwise they would still be paying it. It had nothing to do with company earnings. I don't want many surprises down the road. I'm setting myself up where I can handle a dividend cut or two per year as long as I have 10-12 others raising theirs. I plan on adding a few more lower yielding stocks with higher dividend growth rates. GIS and KMB for example. I'm not as concerned about inflation as some may be. More than half of my portfolio already has equities that have CAGR's of close to 10% per year or more. I think I'm adequately covered there. Although I went for high yield initially, my focus now is more on CAGR. I'm trying to maintain a good balance between the two. I'm looking for a "yield on value" of at least 4% per year. That should help offset the inflation rate. Meanwhile, I'll continue to reinvest the dividends and continue building the monthly income. When it comes time to start receiving the dividends, to offset some risk, I may sell my MLP's for example and replace them with utilities. I won't be concerned with capital gains, only a steady and reliable income with yields in excess of 4%. When I start collecting dividends, I may even sell telecoms and buy more PG, MCD, JNJ and other companies that have decent CAGR's. I've got a few years to finalize my plan of action.