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.

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

To: spindr00 who wrote (30455)	1/20/2019 7:47:39 PM
From: E_K_S	4 Recommendations Recommended By JSB lizardK Mannie research1234 Read Replies (1) \| Respond to of 34328

Have you looked at "Dogs Of The Dow" investment proposition? Dogs of the Dow is an investment strategy that uses the 10-highest dividend–yielding blue-chip stocks in the Dow Jones Industrial Average (DJIA) each year. Because the Dow is one of the oldest and most widely followed indexes in the world — and generally is seen as a barometer for the broader market — it is not uncommon for market strategists to base investing techniques on some components of the DJIA. The main reason to follow the Dogs is that it presents a straightforward formula designed to perform roughly in line with the Dow. I would say over the 40 years I have been investing, 28 years now full time (how time flys), I have been able to generate a good total return but also maintained steady income (must live on that income to pay bills) holding many dividend payers. My best and most consistent returns (both long term capital gain plus dividends) have been from using Benjamin Graham's fair valuation model, aka Grahmn Number. The Graham number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. These positions I typically hold 18-24 months (some up to 36 months if dividends are good and they continue to grow), many also pay dividends (unless they get cut). I typically can find several undervalued GN opportunities during the year and will hold up to 15 different positions at different stages in their investment restructure/recovery until they get back to some full valuation (those 15 companies will represent 3 year holds, some 1st & 2nd year and some at 3 years ready to be harvested). Those at full value I use as a source of funds for other new GN opportunities as they arise. Each position is about a 1.5% to 2% portfolio position and I hope to see a few grow into a 4%-7% portfolio position. The rest of the portfolio holdings are generally long term holds that pay steady dividends (w/ CVX my largest, bought in the 90's as Texaco and it always paid 4% or higher in growing dividends). Every investor has different strategies and it becomes eaisier as your portfolio's grow in size and try not to reach for high yields and/or unrealistic returns. You also get battle scares from the likes of the 1987 crash, the 2000 internet boom/bust, 2008 crash/recession and even the Dec 2018 sell off (after a historic 24 month Trump rally). So downturns are seen as a positive (and for me welcomed) so I can buy some cheap dividend payers to add to my stable of stocks). Diversification and buying bargains is the key for me. The dividend income also helps to stabilize my cash flows, similar to rental income from an investment property (I have one I bought during the 2009 real estate crash that generates excellent income). The other thing I learned is/was to carry little to no debt and not to leverage positions (w/ options and/or margin). It makes holding a position much eaisier when you have that dividend and/or rental income coming in each month/quarter eventhough the stock may be selling for 60% of it's peak value. Cash management is very important too. I currently am sitting on the most cash ever now about at 15%. During 2001-2006 I would hold 5% cash but in 20011, pulled out cash to put into some income property. I currently hold several multi baggers in the portfolio w/ AMNF a 4% dividend payer and a micro-cap that I paid $0.69/share. It's a big sandbox and there are many smarter investors than me (even bots now) but if you have a strategy and stick to it (ie Ben Grahmn value approach for me), you can grow your portfolio over 40 years and w/ compounding it s/d double in value every 7 years. So $10K s/d grow to $600K in 40 years (and that assumes you spend a little each year too). Good Investing EKS

To: spindr00 who wrote (30455)	1/20/2019 10:45:02 PM
From: JimisJim	2 Recommendations Recommended By Graustus maverick61 Respond to of 34328

A guy over at SA only invests in high-yield stocks like CEFs and BDCs and I think his nominal yield is well over 10% and since in accumulation phase (and this guy is DRIPing all of it), his share prices tend to be flat-ish (he posts the PF monthly using real numbers because it is really his money and how he's invested it)... however, the "value" of his total PF will double every 7 years even if his share prices don't go up a dime... Now, as for what happens when a stock goes ex-div? I know the answer you want/insist upon is that the value/share price goes down the same amount as paid out in divvies... except that very seldom happens in the real world... the share price on that one ex-div event may go down less, the same or more than the amt. paid out, or it may not change at all, or it may actually go up -- I actually back-tested this some years ago and found that share prices went down the same as the amt. paid out only actually occurred at close of market on ex-div date less than 10% of the time.... in the real world, it is crazy to even try to predict what the share price of any stock will do on any given day, let alone some day a month, quarter, year or decade. Yes, of course we're only talking about very specific stocks -- we do our DD just like ST traders and swing traders do, except we also tend to dig deeper to examine divvy coverage/safety, the quality of the company and its products as well as their management quality (and many other things like what happened in '08-'09 with a company's shares and what happened next)... Detailed DD is part and parcel of what all good investors do regardless of their methodology or even ST/IT/LT goals, including esp. guys like Buffett. We are not choosing our stocks with darts. And we all have different goals (Steve even includes that in his monthly recaps -- real numbers reflecting his real world investments, goals and real world income/losses) and there are many ways to achieve a successful outcome -- the goals achieved.