They don't pay very well -- but I have $10 a share gain in the name! I expect that to go higher if and when they raise the dividend back to the percentage they used to pay.

Regardless of whether or not the shares are on the famous "Dividend Champions" list... or where they place on that list.. the beauty of dividend stocks in general is that they continue to spin off cash - which is either re-invested or used for some other purpose. That's the beauty of the simplicity of this type of investing.

For instance (another example only please!) Kinder Morgan Partners (KMP) has been down for awhile now... when it was one of my biggest gainers... but REGARDLESS of what it's trading for today or last week.... it pays me $9973 PER MONTH in dividend. It doesn't make any difference what that number is - each person has their own level of shares in various names etc - but for me - that is the number. Now.... when I look at the holding --- that's a very good cash return (over 7%) and my larger concern going forward is -- will they continue to pay this kind of return? So my larger concern is how is their business going and are they capable of earning enough to continue to pay me. As long as I see that their capable of continuing to pay -- then I'm happy. The share price will only become important IF I wanted to sell. Even then.... I'd have to say to myself -- WELL -- They've paid me $5.44 per year per share... I've owned them for 3 years and collected $16.32 in cash.... the shares are "underwater" (for example) $6.... Do I really have a loss in the shares if I sell??

I would have less of a return on a percentage basis -- but I wouldn't have a cash loss. The longer I hold and the more I collect... eventually they will have returned to me everything that I paid. At current prices I have to hold this name 13 years.... after that -- everything they send me is free money! We will ASSume that the share price is even and has no growth during this time period. That's not a bad return over time -- so once again the actual share price day to day becomes less important.

Does that make sense?

Just to be sure --- What I'm discussing above is more about a WAY TO THINK about prices - and when to buy and blah blah blah. The goal is important... the amount of time allotted to that goal. What is your purpose for investing. Is buying down .50 cents today more important than the long term goal?

I posted the "bull market" vs "bear market" charts to show the returns available over various periods of these kinds of markets.

Here's something that I've been shown in my own accounts time after time....


IF I'm up 100% over the last 4 year period -- and I'm now down 30% this year (example only!) -- I'm still ahead, right?

If I'm NOT in the market at the beginning of a bull market I probably lost part of that market's run. Example - if you waited until '10 to get back into the market after the '08 bear was done -- you'd have lost a huge part of the overall return. So look at it this way (made up numbers for example) --- '08 sucked you started with 100K and went down 40% - so you started '09 with a big loss and "only" had 60K invested....but since then you're UP (using the QQQ Dec 08 til today) 191%... You've made all your money back plus some! Had you sold and gone all cash and sat on your hands... you'd just have a huge loss. You'd have made .25% interest on a bank account.... versus the 4 or 5% dividend (compounded and reinvested in shares all along at cheaper prices) and blah blah blah.

Those bull / bear charts show the REMARKABLE rebound the markets make ----- and thus ---- my oft repeated the "chart is lower on the left and higher on the right". Over TIME you are rewarded. Over time - you WILL suffer pain and angst - and then be richly rewarded.

IF YOU'RE REALLY SMART -- YOU'll BUY LIKE A PIG WHEN THE MARKET IS AT IT'S WORST.... but who really does that? It's far more typical to buy when the market is doing well... regardless of whether we're buying stocks - or houses - or cars.

Michael Lewis :rolleyes:

I feel more secure every time you post Greg.

Michael Lewis may have some good points with his discussion -- there's never ANYTHING wrong with putting something like this under the microscope. But his calling the market "rigged" etc -- is just book selling BS.

Anyone that knows anything about anything knows the market has always been in favor of the large institutions and funds that trade. They're the ones setting the price action. We are all just along for the ride. I'm perfectly okay with that. I never try to game what they're doing or try to get ahead of the big boys when their is possible news of a merger etc. When you try to do that - you'll get squashed. This is why I always say to just buy good stuff with a dividend and sleep well.

UP or DOWN.... That's why people don't think they're (dividend payers) worth investing in.... they're not Google or the OLD Microsoft.... where people (including me) got rich in months not years.

The part of dividend stocks that I like the best is that while the interest rates (rising) kill the stock market... the dividend payers are supported on the way down (their share price falling) by the dividend percentage. So let's say the interest rate market (CDs/Bonds/Treasuries) starts to pay decent rates (remember those?) they then compete for investment money with stocks... so if Altria (MO) is only paying 5% and a blue haired old lady can buy a 5% tax free bond.... the bond becomes more attractive (tax free 5% vs 5% taxable dividend) --- so the price of MO would then fall until that dividend rate equals the bond payout. But once they're pretty equal -- then MO would stabilize in price.

What people fail to add in to the mix is that the TOTAL RETURN, over time, will be far far higher (historically) on stocks. Just refer to the Bull vs Bear returns on stocks... pretty hard to go find a chart showing a 100% return on bonds... you get nothing but your money back on a CD...

Just remember that there is only "X" amount of money floating around -- and various investments all compete for that same amount of money. When one thing is "hot" there will be outflow from something else - and it ebbs and flows from various types of investments looking for the current best return. Right now - we're in a period where the market seems to be the best place. But it's also why we need to be vigilant about interest rates because they can't possibly go down from here.... and as long as you UNDERSTAND that and what it means to your holdings etc... then you're good. If you don't understand your investments - then you freak out - sell out (having bought high now you're selling low)... and thus loose out.

I personally agree with the FED --- they need to keep interest rates low for a decent period of time yet. People (some) are just now recovering from the great recession. Some are doing really well -- but the average man in the street is still in recovery mode... and the low interest rate will help housing... spurs investments by business... and all that trickles down to jobs/labor.

This exact same account - with ZERO changes - is now only "red" (negative) 19K....


So there's the point I'm making all the time in this thread. Have some patience! Instead of freaking out and selling because "this week" your account has a couple bleeders in it... Next week they could be your account heroes!


I did absolutely NOTHING ---- and literally since that post and this one the change is UP 166K

Keep it coming! I read this thread every morning. It become more of a habit than the news. :thankyou:

Thank you! I always wonder if I'm just talking to myself. So appreciate the feedback.

I dont post much (only if i have something to "add" and not just drivel) lol. BUT I do check this post at least 5 times a day (I'm on PC all day. lol)

I still read this every time it comes up on the new posts list. I appreciate the information that's shared.

Me to you guys. Look. Learn. Listen. Apply.

This morning -- as usual -- I'm having my coffee and watching CNBC --- and shooting zingers over to Sieg about all the "luck" I've had on a couple names that were bought for pure speculation (in other words - a trade).

Someone on CNBC mentioned that "Buffet" liked Procter & Gamble (PG). So, of course, I had to go check it out.


Talk about your BORING with a capital B name.... and crappy dividend payout of a whopping 3.02% !!!! Who the hell is going to get rich in a name like that! Really --- 3% dividend. You've got to be kidding me....


Oh.... Wait.... it's TOTAL RETURN for the last 5 years??? EIGHTY EIGHT PERCENT.... oh yeah -- 88%..... that's almost doubling your investment in 5 years.


See that's the thing. You've got to dig into the details and while the office hangs around the cooler discussing the latest HOT name... you could be just kicking back with a nice smile on your face knowing that you're going to retire with a huge pile of stock that's paying you to go play golf.

NO I DON'T OWN THIS NAME. It's just another example of investing rather than GAMBLING (is that a pun when discussing this name?).

PG was one of the first stocks I picked out, plan on holding it forever....

I'm enjoying my 7 % pay raise I got today...

I dont post very often but check here everyday. Your knowledge has helped me out tremendously.

Proud to say today is my first Ex-Dividend date on my AT&T stock. Im like a kid anticipating the ice cream truck waiting til the end of the month to receive my first dividends (reinvesting of course).

Thanks Greg.

Take a look at Ford's 5-year Total Return and tell me why you shouldn't buy it and forget about it. :sieg:

Lance --- Gotta love those dividends and the raises that come with them from tme to time!



AT&T (T) went "ex" dividend today.... Thus it's trading down when everything else in my accounts are green. I needed a good dividend to pay for the two neon signs I bought last week! So, timing is everything.... LOL



6 foot by 6 foot.... as in BIG!




http://i919.photobucket.com/albums/a...ilding/_12.jpg





And this one is 4 1/2 feet by about 4 feet wide....







http://i919.photobucket.com/albums/a...ing/image.jpeg

OMG I got a great belly chuckle out of this post --- because it's TRUE! Amazing what getting that dividend does for you!

The thinking needs to change (or be) "I'm an owner of "X" company - and I'm on their payroll until I quit (sell).

An awesome post! I'm always glad to hear this kind of success!

I personally think FORD (F) is the best of the autos and own this name. The problem is their dividend sucks -- if it was better -- I'd buy more of it than I already have (ditto Wells Fargo). I bought Ford more for the growth story than the dividend. This kind of stuff is where you have to be ahead of the curve... so once I saw the economy beginning to make the turn up - I started building a position in the name. (same with WFC). Being early can come with pain... but if you stick to your original reasoning - and you're right (eventually) the payoff is great.

So far I've made two allotted purchases of T so far and I have to admit, it looks enticing to make my third (early) on today's dip. I'm up 9.25% on my first two purchases already.

I thought Dividend Investing was boring? :relax:

Ford has been real good to me I bought in may of 2012 @ $10.54, I kept buying and averaging down all the way to my last purchase of 100 shares @ $9.07
I have a total of 871 shares, and have had 2 dividend raises from $.05 to $.125
I'm happy with this stock even with a 3% yield, my savings account can't do that.

As boring as golf........if you're not a golfer. :D

I was watching it at 10 and didn't pull the trigger. Shoulda Coulda Woulda. Now I have it at $15 and want to add more. :bang:

Love the new signs, Greg. The classic Mobil Pegasus was a gorgeous company logo in my opinion.

Well, I just bought T last week and now I get a raise. Woot!

#1 --- for Investing 102 I would use this name as an example for 2 things


1: Invest in whatever you are comfortable doing. Everyone is different - has different views - has a different level of cash - different times til retirement or other need for the money. As long as you sleep well at night - go for it.


2: When you gamble or take on a "risky" name - regardless of the industry -- then EXPECT --- V O L A T I L I T Y.....

As you pointed out in your post - you can afford a loss if it happens and you have other names which are diversified. And that's the important part. I think everyone that can afford it - needs some percentage of their portfolio in "risk assets". It IS how people get 4 baggers or 10 baggers (4 X's or 10X's their investment). But it's also where it's the easiest to make the right bet in the wrong company. In other words -- the thinking was correct -- but the market rewarded some other company. That's when an ETF in the sector works for some folks. They can just throw a blanket over the whole "sector bet".

HAHAHAHAHA ---- That's what I'm here for!

:king:

Mike for the same reasons you are dabbleing in HEMP I have a little bit tied up in a couple additive manufacturing (3D printing)companies. I 100% believe the industry is going to grow in a huge way over the next 5-10 years but who knows if i have picked the right companies or not. If I lose it all its not going to kill me but if I win on either one or both:G-Dub: I could make a few bucks. Currenty both stocks are the only two down stocks I have but they swing way up to way down weekly.

I totally agree 3rd printing is going to be a game changer in ways we have yet to even fathom, but as you stated trying to pick the right company is speculative at best.

Dabbling and speculation is fantastic in my book..... one caveat though.... do this AFTER you have a good base of basic top notch investments.

Capital is hard to come by --- profits are hard to get and keep... Losses come fast and are easy to do.

My high school buddies Dad told me 40 years ago -- when we were talking stocks and investing..... Making money is easy, keeping it is hard.

So true!

Today - while the market was taking a dump.... and I was driving the 12 hours from Seattle to Sun Valley.... I listened to CNBC on the satellite radio... and thought ----- YEAH ---- This is why I LOVE dividend stocks... let the market be what it's going to be...


Note the dates --- while the market is a yo-yo --- I can continue to spend my "cash". That doesn't mean I don't keep a keen eye on what's going on -- but I'm not going to panic and sell my money makers. If I did -- what would I buy that would produce similar results for doing "nothing". :>)




04/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$14,400.00


04/09/2014 Cash Dividend JNK
SPDR BARCLAYS ETF HIGH Y...
$3,958.20

We hear the talking heads on CNBC and Bloomberg throw out terms, and they use them over and over... One that I heard yesterday "it's a stock pickers market".


Okay --- isn't every market a stock pickers market? I mean - you can't own every name right? SO you have to pick something. Well, of course, what they're saying is that even in a down market - there are stocks you can own that go against the grain -- or go down LESS than the overall market. The other day you heard me say that you can make the right bet on the wrong name. Your theory was right about the direction of the industry - but you got the wrong horse in the race. Okay -- Let's say you think "telecom" is a growth story ---- you picked BlackBerry instead of AT&T or Verizon.... You lose <buzzer>. Why am I bringing this up?

Because that's where I've been telling you to stick with "BEST OF BREED". Pick the top of the industry... Don't think you're a hero and know (or gamble) that just because this company you like is down and everything else is up -- so you can buy "cheap" and it will magically turn around. <BUZZER>


Leaders are usually leaders for a variety of reasons. Just go with it.


Now --- Sometimes it's FAR HARDER to pick the best of breed in an industry... Sometimes we just really don't know -- or we don't know enough and we really don't even know how to find out. Then what do you do?

Personally that's when I bet with someone else that I trust to "know" -- someone that really has put their money where there mouth is... That's not my barber... that's not my buddy at work.... I'm talking about real investors that do this stuff day in and day out and really know what they're talking about!

All this was brought to the forefront this morning when Wells Fargo (WFC) and JP MORGAN (JPM) reported earnings.... one sucked -- and one doesn't. WFC had good earnings.... JPM not so much. I own WFC. WHY??? I really don't know which bank I would have chosen to invest in ---- but I knew I wanted to be in "banking/financials" BEFORE the housing market recovered so I could what?..... Come on!..... BUY LOW.... But if I'm making a "sector bet" -- trying to get ahead of the market by betting that there is going to be a turn around... I have to pick the right name! So what did someone like me do? I went with WARREN BUFFET! He's HUGE investor in Wells Fargo. So I'm putting my money with Warren. BINGO --- winner!

I'm not saying I'm smart.... rather... I'm saying that sometimes you have to just trust other people that are! But you also have to pick what person you want to bet with. I'm not betting with Donald Trump because I think he's a smarmy idiot who I know has bankrupted many companies... I'm going with Iowa Warren who's been hugely successful and I'll just roll with it.

Does someone like this win every time --- hell no! But they win more than they lose. Good enough for me.

That is pretty much the same reason I'm in KO instead of PEP.

I noticed this morning something that's important to Investing 102...


McDonalds (MCD) which I owned - past tense - is back up near $100 a share.... and where it pinged my interest - because this is more of a steady eddy than anything - is I wondered how many of you own it --- noticed you've received nice dividend INCREASES --- all the while those dividends buying shares AT LOWER PRICES when it was languishing in the low 90's.


THAT IS HOW YOU BUILD WEALTH OVER TIME... the re-invested dividend automatically buying shares - whether they're high or low at the time... and those shares paying a high PERCENTAGE of dividend - buying even more shares and so on. THAT'S CALLED INVESTING.

Here's something I forgot to add to the above McDonalds (MCD) post... I just haven't had enough coffee yet to get my act together...


If you go look at Google Finance -- pull up a chart of MCD -- stretch the chart out to ONE YEAR ---- You'll notice that the DIVIDEND bought shares almost at the bottom of every big dip.


The reason that's important is because many of you ask about buying on the dips - but it's so hard to try to time the market. Almost impossible -- yet here is MCD doing it AUTOMATICALLY almost as if though it was timed. Of course this doesn't always happen like that --- but this is plain and easy to see that for the last year (and that's FOUR QUARTERLY DIVIDEND PAYMENTS) it's really worked in your favor!

I didnt even notice that about MCD, I have a small position in them. So far its been very very steady

That's why I'm here dude! LOL



The devil is always in the details.... and this just happened to be a PRIME example of how this IS SUPPOSED to work for you over time.


MCD -- is a "steady eddy" stock IMHO.... yet it's also a stealth grower --- certainly in the last 5 years - it's TOTAL RETURN is UP 105%. Who would think you've gotten a double out of MCD in 5 short years.

NOW --- CAVEAT --- Many 5 year Total Returns look good on paper because they've really RECOVERED from the '08/'09 LOWS..... But many of us (raising hand wildly) were buyers of stocks at or near those horrible dark days...

Remember -- You BUY when others are selling -- and you sell (which means trim huge gains etc) when they're buying. The problem with SELLING is that then you have to buy something else. When the market if flying high - then EVERYTHING is high priced. Yet you must train yourself to understand and acknowledge that even though those prices seem ridiculous now --- 10 years from now they won't seem too high and you'll have collected a nice dividend all the while. That's 40 QUARTERS of dividend payments.... HUGE! Just HUGE!

The month isn't over yet --- and THIS is real money. The kind you can retire on and spend having a great time. LOL




04/20/2014 Cash Dividend BPT
B P PRUDHOE BAY RLTY TR ...
$33,099.41
04/10/2014 Qualified Dividend MO
ALTRIA GROUP INC
$14,400.00
04/09/2014 Cash Dividend JNK
SPDR BARCLAYS ETF HIGH Y...
$3,958.20

I bought MCD when it was $95 and it was red pretty much since I owned it. Like you said it was buying shares all the way down. Then I bought some more at $85 which helped bring my average down. So its in the green now.

Such a much better outcome than the "norm" which would be buy at $95 --- freak out and sell at $85...



Good for you!!