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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (54675)	1/1/2015 5:05:03 PM
From: Grommit	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78618

A lot of people have poured into divvie stocks because "they only care about divvies and the cap gains are irrelevant". This is all good and nice until the stocks drop and they cut divvies and suddenly you have much less capital to reemploy elsewhere. A friend of mine recently sent me a link to investment "strategy" of buying 10 4%-yielding stocks with expectation that divvies will only grow and any stock declines are temporary and "irrelevant". Where did I hear this argument before? I agree. I look closely at valuation, debt, and the usual factors (newer assets, long leases, good tenants, insider buying, ...) . In the past a lot of reit income was from property development. When that died, income and divs dropped. I learned a lesson there. But I still like to see a development pipeline for income growth. Anyway, dividends aren't the only thing, but owning companies solid enough where the div cut is very unlikely is about all one can do. My closest friend was turned on to energy MLPs. They had great yields. What could go wrong? Here's a few of his stocks. 45% of his portfolio -- MLPS PS the other forum has quite a few who focus on div growth, with little regard for valuation. i avoid the aristocrat or overvalued reit with a PE of 20 or 25. I want the 10s or 12s, but getting hard to find.