Investing 102

[GregWeld]

Michael ---

Those are good thoughts and good points.... except that I'd have to correct the misinformation that the stock now pays a smaller percentage dividend. YES --- Based on todays price the dividend is a smaller percentage of yield....


BUT ---- Always the big butt....


The percentage of dividend you have been collecting has been on YOUR lower cost - so you were still collecting a 4% dividend on your cost basis! The dividend didn't go DOWN... the share price simply has appreciated.

And --- if these are taxable accounts - you've now created a taxable event by selling. Long term capital gains with a low percentage of tax for sure... but taxed non-the-less!

NOW don't get me wrong --- there's nothing with taking a nice capital gain and feeling that you can do better somewhere else. Nothing wrong with that at all. I just didn't want to CONFUSE THE NEWBS by saying the percentage was no longer in your favor. It was still paying YOU a decent percentage dividend on your cost.


I like your thinking though!! I might have sold HALF the shares -- choosing the best tax lot... and let the other ride. But that's just me. The TOTAL RETURN on INTEL (INTC) hasn't been all that "hot" at 55% for 3 years -- 110% for 5 years...



HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

[68Cuda]

Originally Posted by GregWeld

The percentage of dividend you have been collecting has been on YOUR lower cost - so you were still collecting a 4% dividend on your cost basis! The dividend didn't go DOWN... the share price simply has appreciated.

Yes - I understand the math, cost basis and all. But now that the stock price has appreciated I can take the profit and buy something that pays 3.5% to 4% on the current dollar amount. Still INTC is a good company, hard to make that jump, maybe I will do the 1/2 thing you were suggesting.

Originally Posted by GregWeld

And --- if these are taxable accounts - you've now created a taxable event by selling. Long term capital gains with a low percentage of tax for sure... but taxed non-the-less!

NOW don't get me wrong --- there's nothing with taking a nice capital gain and feeling that you can do better somewhere else. Nothing wrong with that at all. I just didn't want to CONFUSE THE NEWBS by saying the percentage was no longer in your favor. It was still paying YOU a decent percentage dividend on your cost.

Good points - this is inside a 401k, so no taxes. I did run into something annoying in that respect recently. I was taxed on a dividend inside my 401k on a foreign owned company. That is dirty pool!

Originally Posted by GregWeld

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

Wow - thanks for the reminder, guess I will wait until the 6th! (Maybe 7th to be safe)

[AMSOILGUY]

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!![/QUOTE]


What is the EX you speak of?

[68Cuda]

Originally Posted by AMSOILGUY

HEY ----- MAKE SURE YOU DON'T SELL THEM JUST AS THEY'RE GOING EX!!!!

What is the EX you speak of?

Ex-Dividend date.

Declare date: 9/12/2014 - this is the date Intel "declared" they were paying a $0.225 per share dividend on 12/1/2014.

Ex-dividend date: 11/5/2014 - If you own the stock before this date you receive the dividend, if you acquire it this day or after you do not. If I sell you my stock on or after 11/5/2014 you buy it "Ex-dividend", without the dividend.

Record date: date the company records the owners for the purpose of the dividend. A few business days after the Ex date.

Pay date: when the dividend pays out.

So, since I will own this stock tomorrow, I will get the dividend on 12/1 even if I sell it before 12/1.

[AMSOILGUY]

Originally Posted by 68Cuda

Ex-Dividend date.

Declare date: 9/12/2014 - this is the date Intel "declared" they were paying a $0.225 per share dividend on 12/1/2014.

Ex-dividend date: 11/5/2014 - If you own the stock before this date you receive the dividend, if you acquire it this day or after you do not. If I sell you my stock on or after 11/5/2014 you buy it "Ex-dividend", without the dividend.

Record date: date the company records the owners for the purpose of the dividend. A few business days after the Ex date.

Pay date: when the dividend pays out.

So, since I will own this stock tomorrow, I will get the dividend on 12/1 even if I sell it before 12/1.

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?

[Vortech404]

amsoilguy
You would just miss that dividend payment for that quarter only.

John

[AMSOILGUY]

Originally Posted by Vortech404

amsoilguy
You would just miss that dividend payment for that quarter only.

John

AHHH ok!

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

[Woody]

Originally Posted by AMSOILGUY

AHHH ok!

Thanks John


Now doing research over the last week I have noticed something. The majority of the stocks I have looked at are all up. Is the market overall up and it would be hard to choose something stable that isn't going to be up? Just because it is up does that mean its not a good time to get in? I have mainly been focusing my efforts on dividend paying stocks and ones that I feel are products my family uses. Along with the TR that was brought to my attention

I'm going to follow your advice Greg and split the 1500 over 3 stocks. He actually has 1600 to start with so the extra were going to put in FB which actually is the less exspensive of the 3 I am leaning towards.

I like the mention of FB everybody I know and all businesses have a Facebook page. That is going to be the higher risk and the only one that doesn't pay a dividend.

I'll throw the other two stocks out there that I'm leaning towards and if anybody has information to add I'll take it. I would love to get started today but the up market worries me some.

JNJ
PG

Thoughts anybody?

Regarding buying when the market is up. As long as you plan on holding for the long term, I think most people will tell you to just buy when you are ready and not try to time the market. I actually have a hard time following that advice and tend to wait for pullbacks in price to make my purchases. Sometimes I get the pullback I am waiting for and get a good buying opportunity. Sometimes, I completely miss buying the stock because I am waiting for a pullback and it never comes. The stock keeps going up and up and I kick myself for not having bought it. The other downside in waiting to purchase is that you are not collecting the dividend you could be collecting while waiting for the stock to go down.

You may want to do some research on "dollar cost averaging", if you are going to consistently put money in the market.

[68Cuda]

Originally Posted by AMSOILGUY

AHHH ok!

JNJ
PG

Thoughts anybody?

They are both in the same business.

About 5% of my total is in JNJ. JNJ makes a lot of household products that will always be in demand. Big, stable company. They have a 51 year record of increasing their dividend, and pay every quarter. They pay out close to half their earnings to the stockholders. Buy in the next few days if you want the dividend. If your account has the option (I think all do, I could be wrong) make sure to check the option for re-investing the dividends. This way the dividend pays you in company stock instead of cash.
http://www.dividend.com/dividend-sto...n-and-johnson/

About 2% of my total is in PG. PG is pretty much the same as JNJ. They have a 57 year record of increasing their dividend, and pay every quarter. You are already past the Ex date on PG, so you will not get the 11/17 payout if you buy now. Their dividend is slightly higher than JNJ at the moment and they pay out a slightly higher ratio to the stockholder.
http://www.dividend.com/dividend-sto...er-and-gamble/

If you are buying three not sure I would do two in the same group, but these two are rock solid so no surprises either way. Thoughts Mr. Weld?

[GregWeld]

Originally Posted by AMSOILGUY

Once a stock goes EX-Dividend does that mean it will never pay a dividend again as long as it is traded? Can the company later on down the road say we are going to pay a dividend again on a later date?

A stock that declares the dividend - and they declare a dividend EVERY quarter... also declares the EX DATE and the PAY DAY... the EX DATE is the date by which you must have LEGALLY OWNED the shares in order to receive that dividend. The fact that you put is a buy order and see the shares in your account - does NOT MEAN that you are the legal owner. Typically you have to figure in the settlement date which is when the money is cleared from your account and blah blah blah... This is normally at least 3 BUSINESS DAYS...

So given that information --- if the company declares the dividend - and stated the EX DATE is NOVEMBER 30th -- then you need to have bought the shares by the 24th... to give yourself some breathing room if you wan to be sure to "capture" that dividend.

Conversely --- you could SELL the shares on December 1st (the next BUSINESS DAY) and you'd get paid the dividend even though you no longer own them.

EX dates have NOTHING to do with "never getting a dividend again" etc per your post. They're simply the date declared by which you must have been the legal owner to get THAT QUARTERS declared dividend.