I ran across this article a day or two ago, and it's talking about exactly what you're asking. And its something that we've discussed here on the thread too. So I felt it warranted me sharing it. :P

Anyhow, this may also help answer your question(s) about %, total return, etc.

https://www.kiplinger.com/article/in...-strategy.html

It won't make ME rething my strategy because its the strategy that our good friend Greg here has taught me already. ;)

PS Hey guys - long time to see. hope you all are doing well!

I'm not sure if this helps or not, but you mentioned spreadsheets.. this is an example of the spreadsheet I made to track my stuff... not sure if it would help anyone here or not, but it certainly helps me!

Link: https://docs.google.com/spreadsheets...it?usp=sharing

let me know if you have any questions or comments - or if its useful enough to want a copy of it!

Essentially, i track my purchases and dividend payments on the ticker tab, and that reports back to the summary tab and auto calc's total returns, yield on cost, etc.

Wow!! That is WAY more elaborate than mine!! Thanks for sharing... I might have to sleep on that for a bit to see if I want that much detail or not. Very nice though...



So...I have a holding that has been beaten up a bit in share price (down 47.99%) but still pays a great dividend. I just ran the calcs and the net asset value of those shares in that particular holding now represent just 4% of my total holdings, but the dividend represents 15% of my total annual dividend.

This is where I struggle with this type of investing. If I decide I can't stomach this company any longer, I'm not sure I can replace the dividend dollars that this stock currently pays. One is going to have to hope the replacement stock I pick has enough growth in it to make some of that 48% loss back to supplement the lower dividend it'll most likely pay.

Is this a good metric to use (% of total dividend earned vs % of total net asset value)? Or should it be more about Growth and Dividend %s not necessarily about dividend dollars? This is all in my retirement accounts so no tax implications and I do not expect to be pulling money from these accounts any time soon.

In my opinion if you are trying to grow your account and are not living off of the dividends, I think you should be looking for stocks that will produce the highest total return, not the highest current dividends. Once you are retired and living off of the dividends you would probably change your priorities to concentrate more on dividends.

I think the earlier referenced Klipinger article explains it pretty well that the highest dividend rate paying stocks tend to have the lowest dividend growth rates. They also tend to have the lowest stock price appreciation. In the stocks that I have looked at AT&T is a good example of a stock with a high dividend, low dividend growth rate and low stock price appreciation. You can find many examples of stocks with a 2.0% to 3.0% dividend that have much higher dividend growth rates, and stock price appreciation. Use a spreadsheet and you can figure out how long it will take the dividend for a stock with a 3.0% dividend rate and a 7.0% dividend growth rate to surpass the dividend of a stock with a 5.5% dividend and a 2.5% dividend growth rate. If your time in the market is long enough, the dividend paid on the stock with the current lower yield will be higher and stock price appreciation will also be higher. The combination of which produces the higher total return.

I've never understood why people advise CHANGING what has gotten them to the pot of gold....

It doesn't matter what the strategy is.... The key is that it works for the individuals needs and tastes and how he sleeps best at night.... but I don't know why - if you had a good enough portfolio to get you to retirement - that you'd suddenly dump that and go in to something else.

I've been retired damn near 25 years now... and I'm only going to be 65 this summer. I've been investing the same way for all these years and manage to do pretty damn well at making a living off it.

Dividend investing is for one reason and one reason only ---- it's so you have income to either reinvest - or income to live off of... NOT while the market is good --- but for when it SUCKS! Don't ever confuse this issue. It's the one thing that will KEEP YOU FROM LIQUIDATING your assets when everything is going to hell in a handbasket.

What you're BLENDED return looks like -- growth - dividends - stocks - real estate all has to be considered for one goal --- growth, that over time, beats inflation - and that it creates enough cash flow for you to live on. End of story.

Some investments pay 2% but have growth -- some are steady eddies and they just plod along -- they don't go up much - they also tend to not go down much either.... some are rocket ships to the moon and you just hope they don't blow up in your face.... The key is diversity in all of your investments -- not just diversity in the stock market -- and the real key is TIME --- and TOTAL RETURN..... all else is mumbo jumbo big stuff wannabe talk.

Crypto currency
 

Several of the young guys I work with have been into Bitcoin and a few other currencies

One is up 800k yeah that’s not a typo they tell me it’s going to hit 10 k then level off at 6 for a while... so tempting but I know nothing about it Anyone have any insight?

I have some money that I definitely could afford to gamble with

It’s definitely a gamble. I’d say it’s reasonable to believe it will be around for a long time to come. It’s probably the most main stream way to pay for something if you don’t want It tracked, which is of course why it’s used for some shady transactions. That said, it’s anyone’s guess as to what the price will do.

The underlying technology (blockchain) has some potential outside of Bitcoin as well, but it’s so young it’s still a guess as to who will make a profitable venture of it.

All I really update is dividend payouts an any buy/sells. Then I can just pop it open, and see within a few seconds my total return, real gains, yield on cost, etc. it's not perfect, but it tells me the info that most sites I've seen don't.

Sent from my Moto G (5) Plus using Tapatalk

Lance ---


Your question is legitimate and real --- and I suffer from this in a couple investments (oils) as well....

There will never be a "right" answer to the dilemma. Here's the metric (mental masturbation) I use.... "how long will it take me in income - to cover the loss" and does it have any chance of closing that gap during that particular time span?

So let's say I have a 50K paper loss (remember - it's never a loss until you make it a loss!).... but the shares pay me 22K dividend.... so figure 2+ years of income to get even. Will the shares have ANY chance of recovery --- or is the company so broken it hasn't a chance.

Who knows? It's just a risk you take.... and what you REALLY HOPE -- is that they don't cut the dividend --- and THERE IS WHERE YOU HAVE TO LOOK AT THE PARTICULARS OF THEIR BUSINESS. Are they hemorrhaging cash - top line and bottom line suck? Or are they doing okay in a bad industry?

There are VALUE TRAPS -- where the relative dividend looks very appealing -- but the reason the dividend % is "high" is because the stock has sunk.... What we need to understand is WHY the stock is in the tank.

So ---- many times I'll cut my shares by 25% at a time (my is all taxable - so I offset gains (sales) with losses...) and that gives me time to wait and see what's happening. In the meantime I'm still collecting the dividend --- but I'm also cutting my "odds" of getting killed even more (no different than taking a huge gain!).

This is where I say ----- it's easy when everything is going up, up, up..... This is when it pays to look a lot deeper in to the holding.... What's the dividend payout as a percentage (ratio) to earnings.... What is the company saying about it's future going forward (they're obligated to say if they suck!).... is it a secular decline (oil) or is it bad operations (GE)....

Thanks Greg, nice to know others are dealing with this as well.

Usually an up economy is good for the oil industry, the rules as changed with fracking though it appears so who knows now. It's not a huge part of my portfolio and my biggest fear is a dividend cut...which would be bad, real bad...

So I'll probably start trimming away and most likely just add to my holdings that I feel a lot better about. I'm at 12 now anyway and should pull it back to 10 or less.