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

To: Steve Felix who wrote (33422)	2/24/2021 3:52:38 AM
From: sense	Read Replies (1) \| Respond to of 34328

I will accept that... seeing a discussion of crypto related issues on this board as likely defining the peak in the current bubble... My divvie plays this year might have legs left in them... and they're not a one off... this happens every time the market crashes... The 2020 trade a repeat of a trade I discovered in the market crash in 2008... (2001 ?) back when the division of integrated oil companies into upstream E&P companies, mid-stream pipelines, and down-stream refining and distribution was still a new concept. The new mid-stream companies and pipeline distribution companies were loaded with debt, so when they crashed those stocks got crushed... but, oddly, people didn't quit buying natural gas to heat their homes... so the cash just kept flowing... The worst of them cut the divvies to heal their wounds... hurting share prices even more. I reasoned they'd survive... and restore the divvies in time... which they did. Divvie plays don't have to be boring and risk free ? Same thing happened again in March 2020... only with a double dip tied to the oil craziness last year. I once again bought midstreamers on the cheap... avoided those risky enough to cut the divvie... (which are still plays for later). One of them, OMP you could have bought well under $4 for a couple of days in March... a yield as high as 60%... and it never cut the divvie. Now its up over $16 still yielding 13%... some upside tied to oil and gas prices rising... risks in new energy policy limiting some companies future ability to drill new wells... to keep pipelines full... so care required in picking them. If and as economic recovery continues... those that cut divvies will see them come back... worth sorting them out and watching to buy them before they do... and then the growth in the divvies depends on rising energy prices... not a bad thing in an inflationary environment... which is not equally kind to all dividend stocks. In 2008 the best part of the return occurred as stock price recovered prior highs and continued higher... as the divvie stayed the same or grew on a percentage basis as the stocks rose... yielding 8% or more at $20... still yielding 8% or more at $40... We'll not see that in the current market, yet, until the economy really recovers... and growth resumes... and may see another crash before that happens ? The laggards on the way down in 2020... bigger companies... are now laggards on the way up... so BP and Shell midstreamers slower to recover than the smaller ones... higher yields now... but may be more impacted by risks in government's changing energy leasing plans... more like royalty plays if they're stuck to a declining resource base. Do your own DD... aware that they need growth to sustain them... higher yield often paired with declining values...