Quote:
Originally Posted by solarguy09
to me the total value of the asset at a given time does not matter..Dividends are being paid, and in just about ALL cases, it goes back to and above where i would have stop lossed or whatever you call it.
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And there in lies the truth.... regardless of what the price is "today" -- the dividend gets paid quarterly.... and lord knows I've tried to show enough times the power in that.
Which is why I always keep some powder dry (parked as I call it) to buy on the "dips" in stocks I want to own... because the lower I can buy them - the higher that dividend percentage is! I love it when I can buy a stock down $5 or more... than my original purchase cost. That's why -- if at all possible you want to scale into a position. Obviously you've got to be buying 250 or 500 shares (total position) in order to make that work... Ya can't be scaling in to 100 shares... the commissions would eat your savings.
Here's a classic example in real life...
on May 27, 2011 I bought 5,000 Annaly (NLY) at 18.00
on June 21, 2011 I bought 5,000 more at 18.56
on Nov 22, 2011 I bought 10,000 more at 15.91
If I liked it at 18.56 I gotta really love it at 15.91 so I bought TWICE as much!
It's paying the same .57 per share dividend... so at 18.56 I'm making 12.28%
but at 15.91 I'm getting paid 14.33% !!
So on my holdings in this stock --- I've got a pretty healthy blended return. I'm holding 35,000 shares of this right now - but it goes up and down all the time -- I just use this to park some dough while I'm sitting on my brains doing some thinking.
BTW -- you math whizzes... to figure your PERCENTAGE of any given dividend -- add up the ANNUAL dividend - and divide it by the per share price you paid...