Investing 102

[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.

What I believe Greg was alluding to in terms of waiting can be illustrated with JNJ. I've been reading people say it's overvalued and overpriced all year and to wait for a pull back. Maybe they will be right. They've been very wrong all year. So what do you do as a long term investor? Wait for a day that never comes? Temper your pull back/entry level expectations? Get in now on a good stock and not worry about short term dips and bubbles? Balance. It's going to be different for everyone.

[SSLance]

I tried to do the old "what I think a stock should be valued at" trick for years, sometimes I got pretty lucky and did very well, other times I had my arse handed to me.

What I discovered is there are way too many other forces out there affecting the value of said stock, some of which made no sense whatsoever.

I 100% prefer this dividend stock investing program we have going on here. I don't worry about my stock holdings when they are 30% down in in asset value and I don't worry about them when they are 30% up in value either. The not worrying part is priceless to me.

[68Cuda]

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.

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.

[WSSix]

Sounds reasonable to me, Michael. If you're ok with it and are producing the results you like, then keep at it. Only thing I would recommend is consider total returns and not just dividend payout as part of your research. Costco has been working well for me and Halliburton has too. They both are well below 3% dividend.

Good luck!

[GregWeld]

Originally Posted by WSSix

Sounds reasonable to me, Michael. If you're ok with it and are producing the results you like, then keep at it. Only thing I would recommend is consider total returns and not just dividend payout as part of your research. Costco has been working well for me and Halliburton has too. They both are well below 3% dividend.

Good luck!

VERY CRITICAL --- TOTAL RETURN.... it IS the measure of money making.

[avewhtboy]

No rate hike just announced this is great for the div stocks.

Utlilities and Telecom been in favor ever since Brexit trend could continue into next year given the political climate world wide.

Until they start raising interest rate.

[captainofiron]

Havent posted in a while, but I wanted to thank all the posters on here.

My Rollover IRA has been kicking butt in the past year. Im up 22% since rolling over (taking into account the dividends and reinvesting into my positions).

Right now I am accumulating dividends to make more significant buys and take less of a "hit" on the commission.

BUT how much cash on hand is too much?

Would it be smart to put that free cash into a low fee mutual fund so its not just sitting there earning 0.00000001% (exaggerating) interest?

[dhutton]

Originally Posted by captainofiron

Havent posted in a while, but I wanted to thank all the posters on here.

My Rollover IRA has been kicking butt in the past year. Im up 22% since rolling over (taking into account the dividends and reinvesting into my positions).

Right now I am accumulating dividends to make more significant buys and take less of a "hit" on the commission.

BUT how much cash on hand is too much?

Would it be smart to put that free cash into a low fee mutual fund so its not just sitting there earning 0.00000001% (exaggerating) interest?

Are you paying a percent commission on trades in your IRA? Or is it a flat fee? No way I would pay a percent commission. I'd move my IRA.

Don