- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Investing in Retirement...........only care about dividends
Posted on 2/13/14 at 3:35 am
Posted on 2/13/14 at 3:35 am
So how about this for a retirement strategy? Keep thirty individual stocks in your portfolio that you maintain yourself with the likes of say Vanguard or ETrade. The only criteria for the stocks you purchase is that it have a long history of increasing dividend payout monthly, quarterly or annually.
Price of stock makes no difference to you as you have time before retirement.
Of course this is part of your strategy. If a matching 401k is offered by your employer...take it.
Price of stock makes no difference to you as you have time before retirement.
Of course this is part of your strategy. If a matching 401k is offered by your employer...take it.
4
Posted on 2/13/14 at 6:30 am to Daygo85
You can be very successful with a dividend-based strategy. If you're going to attempt something like this, stick to a framework built on a set of principles such as diversification, valuation, earnings potential, dividend analysis/monitoring (i.e. payout ratios), and dividend growth history. Don't blindly chase yield, but have minimum yield standards for entry. Develop a list of the entry-level standards that suit you and only buy stocks that meet those standards.
And since you mentioned "thirty stocks" presumably in an attempt to diversify, I'd think of it more in terms of weighting your portfolio among the S&P sectors in some predetermined fashion. With dividend growth stocks, it is tempting to get too heavy in certain sectors - Energy and Consumer Staples come to mind
Allocating some portion of your portfolio (aside from 401k) in a growth stock fund(s) and don't ever touch it as it is intended to be a hedge. Keep this fund in a taxable account and max out your Roth with the dividend growth stocks wherever possible.
Don't blindly DRIP all dividend growth stocks. Valuation matters a lot in the long run as it is unrealistic to believe that you will never exit any of your positions. In place of DRIP, deploy dividend income where it will do the most good. Sometimes the best strategy is to DRIP, often it is not.
Be ever mindful of tax treatment.
Best of luck
And since you mentioned "thirty stocks" presumably in an attempt to diversify, I'd think of it more in terms of weighting your portfolio among the S&P sectors in some predetermined fashion. With dividend growth stocks, it is tempting to get too heavy in certain sectors - Energy and Consumer Staples come to mind
Allocating some portion of your portfolio (aside from 401k) in a growth stock fund(s) and don't ever touch it as it is intended to be a hedge. Keep this fund in a taxable account and max out your Roth with the dividend growth stocks wherever possible.
Don't blindly DRIP all dividend growth stocks. Valuation matters a lot in the long run as it is unrealistic to believe that you will never exit any of your positions. In place of DRIP, deploy dividend income where it will do the most good. Sometimes the best strategy is to DRIP, often it is not.
Be ever mindful of tax treatment.
Best of luck
This post was edited on 2/13/14 at 7:02 am
Posted on 2/14/14 at 9:23 pm to Feed Me Popeyes
quote:
You can be very successful with a dividend-based strategy. If you're going to attempt something like this, stick to a framework built on a set of principles such as diversification, valuation, earnings potential, dividend analysis/monitoring (i.e. payout ratios), and dividend growth history. Don't blindly chase yield, but have minimum yield standards for entry. Develop a list of the entry-level standards that suit you and only buy stocks that meet those standards. And since you mentioned "thirty stocks" presumably in an attempt to diversify, I'd think of it more in terms of weighting your portfolio among the S&P sectors in some predetermined fashion. With dividend growth stocks, it is tempting to get too heavy in certain sectors - Energy and Consumer Staples come to mind Allocating some portion of your portfolio (aside from 401k) in a growth stock fund(s) and don't ever touch it as it is intended to be a hedge. Keep this fund in a taxable account and max out your Roth with the dividend growth stocks wherever possible. Don't blindly DRIP all dividend growth stocks. Valuation matters a lot in the long run as it is unrealistic to believe that you will never exit any of your positions. In place of DRIP, deploy dividend income where it will do the most good. Sometimes the best strategy is to DRIP, often it is not. Be ever mindful of tax treatment. Best of luck
This
And I absolutely love dividends. I've had Att for almost 15 years. I only "buy" more when it drops 20% which hasn't happened since 2011. I just reinvest my $.45 a share every quarter. I keep high yielding stocks in a Roth acct so there are no taxes. My Roth contribution is split 50/50 each year between a mutual fund and a direct investing account. I find my high yielding stocks don't have as much upward gains as other investments, but that return has been powerful. I attribute most of my personal wealth to reinvested dividends.
Posted on 2/14/14 at 10:02 pm to Daygo85
How old are you?
Posted on 2/17/14 at 4:28 pm to Chris Farley
Would 20 years be long enough?
Posted on 2/18/14 at 2:23 am to Daygo85
So why would you do it like this rather than just buy into a dividend appreciation fund?
Posted on 2/18/14 at 7:07 am to Daygo85
quote:
Would 20 years be long enough?
A DRIP is part of my retirement strategy. I plan to have it set up in 10 years.
My goal is to do it with 10 stocks. For me, 30 is too many.
Posted on 2/18/14 at 8:05 am to Volvagia
quote:
So why would you do it like this rather than just buy into a dividend appreciation fund?
this.
you are going to spend a noticeable amount on commission fees over the years initially buying and adding to existing shares on 30 different stocks. At $7/trade on 30 shares you will take a $420 haircut (7 in 7 out). Not to mention adding to shares over the years. You can choose from many Vanguard dividend funds where after the initial $1000-$3000 commission free fund purchase adding $100 or more at a time is also commission free.
Posted on 2/18/14 at 9:21 am to Daygo85
quote:
Keep thirty individual stocks in your portfolio that you maintain yourself with the likes of say Vanguard or ETrade. The only criteria for the stocks you purchase is that it have a long history of increasing dividend payout monthly, quarterly or annually.
You might want to take a look at this mutual fund at Vanguard.....
Vanguard Dividend Growth Fund (VDIGX)- This fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time. It has 50 stocks in its holdings and is well diversified. It has an expense ratio of (.29%) and a minimal initial investment of $3000.
If you have the desire to manage and maintain the portfolio yourself you may want to hold 10 stocks or less and still have proper diversification.
quote:
If a matching 401k is offered by your employer...take it.
THIS.....
Posted on 2/18/14 at 9:34 am to BlackCloud
I'm lazy. What kind of dividends does it pay?
Posted on 2/18/14 at 9:52 am to jimbeam
Seems like I've seen some version of the "dividends only" plan on several websites recently. I guess it's the flavor of the month. I'd be curious to know whether it's been backtested against a neutral portfolio and what its performance is.
Posted on 2/18/14 at 9:58 am to jimbeam
Dividend growth pays 2.05%
I own the Wellesley fund, it's a blend (2-1)bond to stock.
Pays a slightly higher dividend 2.56% and has proven less volitile.
It's the most conservative holding I have and is primarily my emergency fund.
I own the Wellesley fund, it's a blend (2-1)bond to stock.
Pays a slightly higher dividend 2.56% and has proven less volitile.
It's the most conservative holding I have and is primarily my emergency fund.
This post was edited on 2/18/14 at 11:12 am
Posted on 2/18/14 at 10:55 am to Cold Cous Cous
quote:
I'd be curious to know whether it's been backtested against a neutral portfolio and what its performance is.
The total return of VDIGX is ahead of the Dow Jones in the same 10yr period roughly 80%-55%. The Dow Jones is ahead in the 5yr return roughly 120%-110%. The VDIGX is ahead in the 2yr return roughly 30%-25%.
VDIGX is mainly for people who are looking for companies that are committed to growing their dividends over time. This is great for retirees who want to keep up with the cost of inflation on a fixed income. Or for those who love the idea of reinvesting and letting the power of compounding do its magic. The OP might be interested in this fund to achieve his investing objectives.
Posted on 2/18/14 at 1:49 pm to BlackCloud
quote:
BlackCloud
I like your screen name. Some of my friends starting calling me Dark Cloud in 2007/2008, but I had the final laugh on that one.
Posted on 2/18/14 at 3:53 pm to tirebiter
Check out dividend paying ETF's. Work like a mutual fund without the associated expense fees. Brokers like Schwab even have no commission etf's. A savings of 1% in fees add up over the years.
Posted on 2/18/14 at 8:03 pm to Volvagia
quote:
So why would you do it like this rather than just buy into a dividend appreciation fund?
this is the opposing viewpoint
LINK
To underscore the point, look at VDIGX, as has been mentioned above. Considering the awesome core holdings in that fund LINK, it begs the question of why anybody would put up with such mediocre CAGR from the fund itself LINK.
Put another way, here's a backtest of $10k of VDIGX for 20 years LINK v. VDIGX's Top 10 holdings at $1k apiece over the same period LINK. Not even close
I'm not calling out VDIGX for any particular reason. In fact, the same is true of most "dividend appreciation" ETFs and Funds.
This post was edited on 2/18/14 at 8:17 pm
Posted on 2/18/14 at 9:05 pm to Feed Me Popeyes
quote:
Put another way, here's a backtest of $10k of VDIGX for 20 years
For some reason the performance of VDIGX was negative the first 10 years of existence.
I did a quick check on the 10, 5 and 2 year returns and found it either was equal to or in some cases exceeded the performance of the core holdings.
Do you have any idea why VDIGX performed so badly during the bull market run of the 90's?
I myself would prefer to have the core holdings.
The OP mentioned Vanguard and I am familiar with the funds and thought I would suggest VDIGX for his investment objectives.
Posted on 2/19/14 at 7:07 am to BlackCloud
quote:
Do you have any idea why VDIGX performed so badly during the bull market run of the 90's?
No, I just always go back 20 years when looking at dividend stability. I don't know much about this particular fund in the 90's
quote:
I myself would prefer to have the core holdings.
The OP mentioned Vanguard and I am familiar with the funds and thought I would suggest VDIGX for his investment objectives.
Fair enough. And as long as VDIGX keeps growing its own dividends as it has been (~5%/yr), it's not a bad option. Obviously though, so many of its core holdings grow their dividends at >10%/yr like clockwork. Also, it's hard for me to take it too seriously when its largest holding is UPS, which isn't remotely the best choice in this arena. UPS froze its dividend as recently as 2008-09
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News