Quote:
Originally Posted by GregWeld
I think you're doing the math incorrectly!! Or at least I hope you are!
The dividend should only be calculated on YOUR COST basis. To do this --- divide the ANNUAL dividend paid - by your cost per share....
DON'T look at what it's paying currently on the price it's trading at today. What should really be happening is that your dividend PERCENTAGE should increase as they raise the payout - and your cost stays the same (unless you're adding to the shares at which time you need to calculate your new cost basis).
Does this make sense?
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That’s entirely possible. I understand what you are saying. But here’s the way I was looking at it. Suppose I’m retired and my portfolio that cost me $1000000 is now worth $2000000 thanks to your awesome advice. The 5% dividends on the $1000000 cost basis is now yielding 2.5% on the current value of the portfolio. But because I am retired I would really like to see 5% on the current $2000000 value.
So would it make sense to move into stocks that are paying 5% on their current value today, assuming I could find any that I understand and trust?
Hope this makes sense.
Thanks,
Don