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

To: spindr00 who wrote (30370)	1/14/2019 4:05:13 AM
From: robert b furman	1 Recommendation Recommended By berniel Read Replies (3) \| Respond to of 34328

Hi spindr00, In your example of T there is a loss in the past year of $5.61. That is a function of the strike price you sold the put at. I try to look at a long term chart (3-4 years lengthy - usually weekly). If I can buy the stock at that low price, then the dividend is usually a return of company earnings and not a return of my capital. In general, I sleep well, as long as price plus the dividend received that year stays above my initial net purchase.(august of 2015 price hit a low of $30.97. So a net price of 29 ish keeps my dividend a return of earnings that continues year after year. In T's current example, it got below that number,with the current low of$ 26.80. That makes it something to put on your watch list. That 30.97 previous low occurred in a down market while T was also buying Direct TV and taking ondebt for the transaction. The current purchase of Time Warner is a similar event compounded by the governments (DOJ's) antitrust case PLUS a ridiculous appeal after losing their initial trial. A very unique set of circumstances , that require watching. My bet is T will win without giving up anything and will pursue it's stated goal of debt reduction through asset sales and cashflow increases. The idea is to buy a stock at a below market price by the premium received (which is maximized by going out in time over 12 months AND it receiceives capital gains taxation rates (similar to dividends usually). If you can accomplish that ,and your net cost is close to or below the 3-4 year low - you stand a fairly good chance of getting your dividend back as a share of income and not capital returned. When buying a Dividend Aristocrat, of any other stock with a long record of steady dividend payments, there very often is excellent price support when the stocks price lowered to the point where the dividend yield approaches 5% to 6%. I think it is often the dividend mutual funds jumping in and accumulating more shares. The nice part about the dividend is it comes every year after year. Not sure on all the details with your repair strategy. Would you have to cough up 200 shares if price dropped below 70 at expiration? Good discussion. Bob

To: spindr00 who wrote (30370)	1/14/2019 12:03:34 PM
From: JimisJim	4 Recommendations Recommended By Mannie research1234 rnsmth sm1th Read Replies (1) \| Respond to of 34328

The goal of Dividend Growth Investing is to invest in "safe" stocks -- ones that have been around a long time with a long track record of increasing dividends faster than inflation... companies that will still be chugging along in 20-30 years and continuing to hike divvies at least once a year faster than inflation. The intent is to replace income in retirement. The companies that are good DGI candidates also happen to be ones that typically do not plunge as much in corrections or crashes and recover faster/before other stocks like pure growth stocks that do not pay dividends. Our portfolios are constructed such that we may never have to sell a single share of stock to generate income in retirement -- I can almost guarantee that the folks who save up some "magic number" the brokers and Suzy Ormans talk about and will help you calculate what that magic number is.... and then in retirement you SELL x% of your holdings every year for income until you have zero left and/or die... in many ways good DGI stocks are also good defensive plays during crisis and/or corrections -- every single stock I owned kept paying and raising their divvy during the financial crisis of a lifetime in 2009 time frame and the best part is during that time, which was still in our accumulation phase, Dripping all stocks meant I actually came out the other side in significantly better shape that prior to the crisis because eace dripped dollar bought more "future income" in the form of increased dividend income from more shares dripped at 40% off prices and the resulting bull really really really compounded future earnings. DGI yields more than 4% income per year (my wife's is 4.5%, and mine is more tuned to current income, yielding on average almost 6% per year, some of which is DRIPPED), so there are no future RMD issues either. So far, the only problem we've had is we make too much money now -- 15%-20% more gross income (in retirement accts like IRAs and ROTHs) and if we withdraw all of 2018's divvy/distribution income, we end up with bigger marginal tax rates -- I contend that is a great problem to have as we can choose how much to "earn" and the taxes, while not pleasant, perhaps are at least a great reminder of how much more money we make in retirement compared to when we both were working full time. If you get a chance, just skim some of the books in the intro to this board, in particular, Lowell Miller's book and you might understand why we all talk dividends so much, etc.