Quote:
Originally Posted by WSSix
You're both correct. There's a balance that must be achieved in my opinion. Is it something that can be or should be discussed in Investing 102? I don't know. I think not as it can get very deep quickly but at the same time it could be. I think it should definitely be something think about a little.
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My personal approach - input welcome -
I have a half dozen or so stocks that I have researched that I fundamentally like that I would not mind owning in addition to my current holdings. I have money that goes into the retirement account with each paycheck. Once the cash has built up to a comfortable level I look at the dividend payout % and 52 week high / low of the stocks on my list. I also look at my current holdings and consider if I want to increase any of them. I don't like to have any individual carry too high a percentage of the whole. I weigh the price / dividend rate, and etcetera then choose the one that I like the best at that moment and then buy. I rarely sell anything anymore. And I don't buy anything that pays less than 3% dividend.
Like I said, this is my approach, and it has worked pretty well for me.
My purchasing strategy is similar to the "Dogs of the Dow" method. The "Dogs" method only considers DOW and you simply pick the highest dividend rate stocks. Differences include that I rarely rebalance or sell, I do not limit myself to the DOW stocks, and I try not to build too much of the same sector stocks. For example, I only own one oil stock.