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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (54064)	10/4/2011 4:25:57 PM
From: Jacob Snyder	3 Recommendations Read Replies (2) \| Respond to of 95530

<would I rather have AIXG (instead of INTC) at the next bottom when it could potentially rise 3 to 10 times while paying a much larger dividend?> As I posted here, seekingalpha.com AIXG's trailing dividend is an anomaly, not likely to be repeated until the next cycle top. I guarantee you , INTC will pay a higher dividend yield than AIXG, over the long term. There is good evidence, from long-term studies, that dividend-payers outperform non-dividend-paying stocks (dividend plus cap gains). This is robust data, and convincing. It is very possible, the average return of the stock market over the next 10 years, is 5% or less. If that's true, dividends are likely to be the difference between positive and negative real returns. I am looking forward to a time when I can stop looking at my portfolio except for once-a-year rebalancing. My wife is likely to outlive me, and I want to leave her a secure dividend income stream. In order to make more money in AIXG vs. INTC (and in general, small-cap high beta vs large cap dividend-payers), you have to get things right which are very difficult to do. You have to buy at the bottom, and sell at the top. How many of us, on this board, accurately predicted the bottom in 2008-9? How many of us accurately predicted the top in 2011? Even if we did accurately see those tops and bottoms, did we have the courage and cash to buy and sell at the correct times, or anywhere close? I didn't, and neither did you, and nobody should have a plan that only works if we are smarter than we've been in the past. We'd all do better if we were more humble, and more realistic about our abilities. <How much of your available cash are you going to put into a dividend portfolio of tech stocks?> As a general rule, no more than 5% of my portfolio in any single stock, or 30% in any single sector. I may temporarily exceed that limit, while accumulating a position. In this bear market, the 5 sectors I want are: semis and equips, energy (solars, oil, natgas), manufacturers (GE, SI, DOW, DD), miners (FCX, BHP, RIO, NEM), drugs (JNJ, TEVA). I'll decide the proportions among those sectors and stocks, when I see how low the stocks go.