Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (124203)	8/30/2010 10:43:08 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Dividends are not a free lunch and do require research work. Most people go for utilities and mlps and get their heads handed to them. Dividend growth investing and dividend capture investing are too very different strategies, though I find occasional overlaps in these investments. The dividend growth cos. tend to be premier firms with yields that are not real high. Yet! There are funds that follow this strategy, Vanguard Dividend Growth, Franlin Templeton Dividend Risers, Dreyfus Dividend Achievers, etc. I prefer individual issues so I can also play options against them. However, I sometimes search these fund portfolios for ideas I may have missed. Cumulative preferred stocks are mostly offered by cos. with fairly crappy credit ratings. The big exception are closed end fund preferred shares, which are Triple A and have tax advantages. Gam-B and Gab-D are two of my favorites, but these shares are all selling over redemption price at this time. I don't think they will be called, and am not selling most that I own, but it is not a good entry point. Another group is the Nuveen tax free preferreds which are 5 year issues, with at least one down close to 4 years now, yet yield more than 10 year treasuries. Not tax equivalent yields, but straight up yields. You can check them out here: nuveen.com I expect many more of these in the future. The key is, these CEF preferred shares have the full backing of the entire portfolio of stocks and bonds. They go up and down in price, but the yields are well protected. BTW, don't confuse CEF preferred shares with CEFs who manage preferred shares in their portfolio. The former are AAA and the latter are mostly junk, with very high yields. Some of the John Hancock and Alliance preferred funds, not preferred stocks, have done o.k., but the credit ratings are not my cup of tea.