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

To: Steve Felix who wrote (17687)	12/2/2013 4:32:26 AM
From: chowder	2 Recommendations Recommended By rnsmth TheNoBoB Read Replies (1) \| Respond to of 34328

Thanks for sharing your monthly updates Steve. I appreciate it. I would like to comment on something you said. >>> At an all time high, but imho, those that say "my portfolio is at an all time high" without context, aren't saying much. I'm proof of that. <<< I think one needs to put things in proper perspective. In last night's football game between the Giants and the Redskins, the Skins were in a 2 minute drill trying to drive for a needed touchdown. They thought they picked up a first down on one play as the chains on one side of the field moved to show where the next first down marker was. In reality, it was third down. They ran a play that didn't gain much yardage and found out it was then fourth down. The Skins sideline went crazy. They thought it was first and ten. It wasn't. It was third and short. The coach said it's obvious that if he were told it was third down, the play call sequence would have been different. The goal of making first down would have caused them to call a different play. Portfolio's are like that. Although most folks try to chase the market return, other portfolio's are more clearly defined with specific goals to achieve and it doesn't matter what a benchmark does or doesn't do. In your case, your portfolio may be under-performing the NASDAQ in the time frame you're using to measure results, but what if all of your money were placed in the NASDAQ? What type of income stream would you have then? Would the capital gains make up the difference? Do you want to be in a position where you have to depend on capital gains to provide cash for living expenses? Does your income stream beat what the benchmark could have provided? The answers to these questions determine your play calling sequence. Since I don't know the answers to your questions, I do know the answers to mine. I publish the results publicly of one of the portfolio's I manage, Project $3 Million, which you have listed in your header message. Project $3 Million has very specific goals it wants to achieve. PRIMARY OBJECTIVE: Income Replacement! ... The objective is to start earning an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month income in retirement, and not have to sell any assets to do so. The objective also includes having the income stream continue to grow at a rate above inflation. A portfolio of $3 Million with a yield of 4% will accomplish the $10,000 per month in income. Hence the title of this portfolio ... Project $3 Million. MISSION STATEMENT: To earn an income stream that is reliable, predictable and increasing. With the goals established and the Mission Statement in hand, the play calling sequence then determines which positions to purchase and how they should be managed. This would be covered under the strategy and determines the tactics one would use. STRATEGY: To focus on the safety of the dividend, then to focus on the growth of the dividend, and then to focus on the total return. The formula to be used to put this strategy into effect is what I call "The Success Formula That Never Fails." High Quality + High Current Yield + High Growth of Yield = High Total Return. TACTICS: To contribute $500 per month to the portfolio, look to earn 8.25% annually, compounded over 40 years (to age 65). With all of this in mind, I ignore the market or benchmarks of any kind. The reason I ignore them is because I know specifically where the portfolio needs to be at the end of every year looking out 40 years. At the end of 2013, the portfolio needs to have a total market value of $86,059.44 based on where it started in 2008. At the end of 2014 the market value needs to be at $100,643.33. At the end of 2015 the total market value needs to be $115,499.83. The portfolio value at the close this past Friday (Nov 29) was $109,325.01. The portfolio is ahead of schedule towards the $3 Million, has already achieved the 2014 results and is halfway through the 2015 results. If the market corrects in 2014 and 2015, I have a buffer, or a margin of safety to help keep the portfolio on track. More importantly, my play calling sequence is set up to play a strong defense. Most of the positions in the portfolio are designed to protect the downside. When you have a strong defense, you only need an adequate offense to win the Super Bowl. I expect the portfolio to under-perform the market in years like 2013, but I expect the portfolio to beat the market over the long term due to its defensive nature. The Primary Objective is income replacement. The income stream in 2013 is up 20.6% year to date over the same time frame in 2012. Some of that came from the added funds that were contributed to the portfolio on a bi-weekly basis, but some of it came from dividend increases. The portfolio held 25 positions and all of them raised the dividend in 2013. The average dividend increase for these positions was 8.3%. My objective is to grow the portfolio at an 8.25% rate. Note how the dividend growth matches that objective. My play calling sequence was designed to put the pressure on dividend growth, something I have the power to choose, and take the pressure off of share price appreciation, something I have no control over. Therefore, what the market does or doesn't do, has no relevance to me. What is relevant is that the predetermined objectives are not only being achieved, I am exceeding them, and I'm doing this through using conservative tactics. project3million.blogspot.com Your portfolio, although designed differently due to different objectives, is probably far ahead income-wise than it would be if you invested in an Index.

To: Steve Felix who wrote (17687)

1/2/2014 12:12:05 AM

From: Steve Felix

3 Recommendations

Recommended By
alanballow
CusterInvestor
robert a belfer

Read Replies (1) | Respond to of 34328

Monthly update:

Four years is a short time, but I still believe that over time, starting out higher yield, and taking advantage of the market of stocks in different ways, will do better than the S+P and a strict DGI portfolio, income and total return. Ten years will tell better. I still believe dividends are key.

Others don't like to compare and that is their prerogative. I've seen reasons explained in many ways.
The way I see it, I'm not letting my offense refuse to play because there "could" be a blitz.
I'm not letting my defense refuse to play because they don't know ahead of time if the play will be a run or a pass.

I don't want a participation certificate. That said, I'm definitely being outscored in the second quarter.
Even so, it was a fun year. Really would like a nice correction though.

DVK Sensible Stock page link: sensiblestocks.com

Investment, Current Value, Prior Value, PeriodChange, %Change, Estimated Income. Estimated Yield

Nov. ....Totals $323,639.50. $321,813.88.... $1,825.62...... 0.6%...... $19,140.58........ 5.9%
Dec......Totals $327,145.81. $323,639.50.... $3,506.31...... 1.1%...... $18,563.38........ 5.7%

Since Jan. 1, 2013:

Nasdaq 3019 to 4177 =............+38.4%
BRK.A 134,060 to 177,900 =...... +32.7%
S+P 500 1426 to 1848 =.......... +29.6%
Dow 13,104 to 16577 =........... +26.5%
My IRA $262,934 to $327,146 = +24.4%
DVK SS $59,107 to $70,485 = 19.25

Since inception Jan. 1, 2010:

Nasdaq 2269 to 4177 =............. +87.75% (includes total 3.67 ( was 2.5% ) yield for 2010 thru 2013 )
My IRA $178,517 to $327,146 = +81.3%
BRK.A 99,200 To 177,900 = .....+79.33%........... Jan 1,2013 yields used
S+P 500 1115 to 1848 =........... +73.06% (includes total 7.32 ( was 5.19% ) yield for 2010 thru 2013 )
DVK SS $41,706 to $70,485 = +69.00
Dow 10428 to 16577 = .............+67.66% (includes total 8.7 ( was 7% ) yield for 2010 thru 2013 )

Bottom line, estimated income:

End Jan. 2010 $11,134
End Dec. 2010 $13,160
End Dec 2011 $14,836
End Dec. 2012 $17,371
End Dec. 2013 $18,563 ( DLR-G +$147 has not settled yet )

Dec. dividends: $2246

Actual dividends received:
2010 total $12,317 yoc 6.89%
2011 total $14,160 yoc 7.93%
2012 total: $16,497 yoc 9.24%
2013 total: $19,421 yoc 10.87%

Trades:

12/30/2013 15:39:53	Bought 100 DLR PRG @ 18.039	-1,811.90	---
12/30/2013 15:38:11	Sold 220 MHR @ 7.3201	1,602.39	---
12/24/2013 10:00:11	Bought 50 APTS @ 8.0393	-409.97	---
12/23/2013 10:32:03	Bought 50 WAG @ 57.93	-2,904.50	---
12/23/2013 10:02:34	Bought 55 TGT @ 61.77	-3,405.35	---
12/20/2013 15:10:00	Sold 900 MHR @ 7.31	6,570.88	---
12/19/2013 10:10:39	Bought 27 DRI @ 49.65	-1,348.55	---
12/16/2013 10:40:59	Bought 150 FSC @ 9.2599	-1,396.99	---
12/16/2013 10:39:04	Sold 100 RES @ 17.76	1,767.96	---
12/10/2013 10:01:33	Bought 100 KMI WS @ 3.756	-383.60	---
12/06/2013 14:56:05	Bought 500 MHR @ 6.7299	-3,372.95	---
12/06/2013 11:16:28	Bought 50 SDRL @ 41.769	-2,096.45	---
12/06/2013 11:11:24	Bought 50 EPB @ 34.41	-1,728.50	---
12/06/2013 11:04:22	Sold 400 MCGC @ 4.6301	1,844.00	---
12/06/2013 11:02:37	Sold 439 NAUH @ 3.7301	1,637.48	---
12/06/2013 11:02:37	Sold 561 NAUH @ 3.7304	2,084.71	---
12/06/2013 11:00:42	Sold 70 CCG PRA @ 25.03	1,744.06	---
12/04/2013 12:16:04	Bought 100 MHR @ 6.805	-680.50	---
12/04/2013 12:16:04	Bought 300 MHR @ 6.809	-2,050.70	---
12/04/2013 11:11:48	Sold 100 GOV @ 24.78	2,469.95	---
12/03/2013 15:24:36	Bought 500 MHR @ 6.9899	-3,502.95	---
12/03/2013 15:14:35	Sold 100 MHR PRC @ 25.43	2,534.95	---
12/03/2013 13:47:41	Bought 100 FF @ 15.53	-1,561.00	---
12/03/2013 10:59:41	Bought 50 DLR @ 43.26	-2,171.00	---
12/03/2013 10:25:02	Sold 25 DLR @ 43.301	1,074.51

2013 trading costs $1208

Holdings - cash $557

Symbol Qty Dividend Amount Dividend Yield

ABR	330	2,197.80	0.52	7.81
	AMNF	600	1,164.00	0.064	3.299
	APTS	350	2,814.00	0.64	7.9602
	ARCP	300	3,855.30	0.94	7.3143
	CAH	50	3,340.50	1.21	1.81
	CLMT	274	7,129.48	2.74	10.5304
	CPLP	200	2,094.00	0.93	8.8825
	CQP	200	5,730.00	1.70	5.9337
	CSX	200	5,754.00	0.60	2.09
	D	100	6,469.00	2.25	3.48
	DLR	75	3,684.00	3.12	6.35
	DLR-G	100	1,815.00	1.47	8.09
	DRI	27	1,467.99	2.20	4.05
	EPB	250	9,000.00	2.60	7.22
	ESP	300	9,792.00	1.00	3.0637
	FF	300	4,740.00	0.48	3.04
	FSC	150	1,387.50	0.9996	10.8065
	GRH-C	110	2,093.30	2.50	13.13
	GST-A	100	2,399.00	0.00	0.00
	HRS	125	8,726.25	1.68	2.41
	KMI+	100	406.00	0.00	0.00
	LTC	300	10,617.00	2.04	5.76
	MHR	2480	18,128.80	0.00	0.00
	MHR-C	400	10,144.00	0.00	0.00
	MHR-D	600	28,590.00	0.00	0.00
	MO	200	7,678.00	1.92	5.00
	MPW	1450	17,719.00	0.84	6.87
	MYE	100	2,112.00	0.36	1.70
	NATI	100	3,202.00	0.56	1.7489
	NMFC	300	4,512.00	1.36	9.04
	NRF	893	12,010.85	0.84	6.25
	O	900	33,597.00	2.19	5.86
	OXY	150	14,265.00	2.56	2.69
	PSEC	1200	13,464.00	1.3239	11.7995
	RES	200	3,570.00	0.40	2.24
	SDRL	100	4,108.00	3.80	9.25
	SFL	200	3,276.00	1.56	9.52
	SLP	100	505.00	0.16	3.1683
	SNH	400	8,892.00	1.56	7.02
	SPAN	145	3,021.80	0.56	2.6871
	STE	100	4,805.00	0.84	1.75
	TAL	140	8,029.00	2.80	4.88
	TESS	100	4,032.00	0.72	1.7857
	TGT	110	6,959.70	1.72	2.72
	VGR	239	3,912.43	1.60	9.77
	WAG	130	7,467.20	1.26	2.19
	WIN	200	1,596.00	1.00	12.5313
	WU	250	4,312.50	0.50	2.90