re: Is it buy time?

AUTigerNola what alot of people don't get is that when you buy a dividend stock you are buying an income stream that will hopefully rise every quarter as your dividend buys you more and more shares. See every quarter your dividend is paid and you own a bigger stake of a company which will in turn pay you a bigger dividend the next quarter and so on and so forth. Where it gets really interesting is the double compounding effect where you are getting new shares AND the dividend increases annually as it has for many blue chips around you. The dividend increase means an increase in your pay usually in excess of inflation. Let me give you an example.

I was born in 1979, take coca cola, which was the world leader then in soft drinks, no really an up and comer, if my parents had put $1000 into coca cola stock and never touched it again, id be sitting on $126,000+ today...a 12,000%+ return according to this calculator

LINK

well that would be incredible, but that's hindsight, had they put that same $1000 in 1979 and added $100/month on automatic investments, I'd be sitting on close to $1.1M today with a grand total of $40,000 invested over 34 years.

Dividend stocks double compound and its super powerful, most people don't really grasp it, but albert einstein once called compound interest the "8th wonder of the world"

So a crash in stock price doesn't mean a crash in dividend payment....in most cases, in the last recession I know GE cut their dividend but mcdonalds,coke,phillip morris, and many more all boosted dividends through that rough period, to these companies to cut the dividend is a big big deal bc they will lose lots of investors.

All I can tell you is you want growth + dividends thats why my pick is phillip morris I see that growth and high dividend, coke for instance has only returned 28% with dividends reinvested from 1998 till today. MO/PM has returned 745% in that same timeframe, like I said I like any consumer staple that has a global reach but to me, knowing the growth prospects available overseas and how inelastic people are to tobacco pricing and an enormous global population growing by the day......cigarettes are my pick

but there are many blue chips and you need to see your investment as an income stream and as you buy every new share you are adding income not just today but in the future. For me I have a gigantic postion in PM that pays me nearly $24,000/yr in dividends today, thats incredible at $3.40/share. 10 years from now that dividend is projected to be at close to $9 so without adding another share I'll make close to $60,000/year in a decade if they grow their dividend annually which they will barring some unforseen circumstance which i do not see considering world governments depend on tobacco taxes more than you could ever imagine.

So thats how you should look at dividend stocks, pretend you are buying a business that is paying you back an annual salary on top of capital appreciation. If the price goes down....awesome your dividend buys you a bigger stake, if the stock price goes up.....awesome you made capital gains

Either way as long as the companies stay in business and boost their dividend which some like coke have done every year for 50+ years, you will get a growing income

Im in 18 years into this dividend investment adventure and I'm seeing the rewards first hand, I was on pace to retire by 45 with a near $80k salary from dividends while never earning over $85,000in real life till this past year when I inherited a big business from an uncle

It's doable, it just takes time and understanding

but ACgeaux who cares? Dollar cost average if that's the case. I personally believe that some stocks like PM I mentioned won't correct by 20%, its already corrected 10% from the high of $96 down to $86 and with a september dividend boost, any shares bought at $86 will pay a 4.2% dividend then, could it go lower? Sure but there's a bigger chance it will go up from here.

Everyone that keeps calling for this correction isn't getting the big thing, companies have rock solid balance sheets today so any decline in price is a steal. How are exxon or chevron supposed to decline 10% from here, you want them to trade at 7x earnings? There are many companies that have run up beyond historic valuations and are probably going to correct, but I could give you a list of many blue chips trading at cheap forwards earnings valuations too

Chevron
Exxon
Conoco
Shell
BP
Phillip Morris
Visa(20x earnings for a growth stock is cheap)

Sure some stocks are overvalued but many are flat out buys today and if they go any lower, sell what you can to buy. Chevron is at 8.9x earnings and yielding 3.4%.....are you kidding right now? I wish I liked big oil more bc that has screaming buy all over it

haha what terminology? I'll try to explain if you detail what you wanna know..

I read so much stuff everyday man, mostly barron's and seekingalpha.com.

I mean, me personally? I add when I have spare money, as a business owner, there is no salary or set pay so every month after all bills are paid I add what I can and I have a big portfolio of many stocks but with a high concentration on PM but what I do when I have new cash available I look for whatever is the most beaten up recently definitely not looking to buy at the 52 week high unless there is a dividend increase on the horizon

I wouldnt put less than $1000 if i were you into any individual stock bc etrade charges $9.99 to buy and $9.99 to sell but I don't sell anyways so buy $1000 each in a few different companies you like, set it on dividend reinvestment and add when you have the additional funds

P/E can be used as a rough approximation of a company's valuation relative to its past performance as well as the value of its peers. It gives you a decent idea, but the "E" part of it is carefully manipulated by management and is not necessarily a good proxy for cash flow.

Bottom line it's always buy time, maybe not for an index but there are always opportunities in individual stocks

I see no mention of Apple in this thread. It seems somewhat oversold with a price of around 413 and a estimated value of over 600 (according to Trefis.com).

Any opinions/thoughts?

Thanks. That was good info.