Investing 102

[GregWeld]

BTW --- PSA just announced a 14% increase in their dividend to $1.25 per share.... Ya gotta love a company that increases the payout to the shareholders and this company has a stellar track record of doing that!

What that does is -- over time -- covers inflation... and as the payout increases but your cost stays fixed -- that increase becomes really nice!

[XLexusTech]

Greg any thoughts on the new strategy AAPL is potentially going to do.
"IPrefs"

[toy71camaro]

Originally Posted by GregWeld

What that does is -- over time -- covers inflation... and as the payout increases but your cost stays fixed -- that increase becomes really nice!

Speaking of that... I just spent the last few hours documenting all my dividend stocks out of my paper "folder" and into Excel.

One of the things im starting to track is my "Yield on Cost". With the 2 of my core holdings increasing their Div % today, started to now track what the YOC is too.

So being the geek I am, I setup a spreadsheet to calculate my YOC and my Dividend payments each time i get one (i have to manually input the payment info, but it carries it over to various forms and adds it up for me so i can see my yearly dividend payouts).

At this point, my overall average YOC is 3.95% at this time. Not great, but not horrible. Its up from 3.88 last year, thanks to the two that announced increases today. It gives me a spot to keep track of my YOC for my 9 core (investing 102) stocks, and my total payout for each year.

I need to find something to offset that ~4% and get it up a bit this year.

[GregWeld]

Originally Posted by toy71camaro

Speaking of that... I just spent the last few hours documenting all my dividend stocks out of my paper "folder" and into Excel.

One of the things im starting to track is my "Yield on Cost". With the 2 of my core holdings increasing their Div % today, started to now track what the YOC is too.

So being the geek I am, I setup a spreadsheet to calculate my YOC and my Dividend payments each time i get one (i have to manually input the payment info, but it carries it over to various forms and adds it up for me so i can see my yearly dividend payouts).

At this point, my overall average YOC is 3.95% at this time. Not great, but not horrible. Its up from 3.88 last year, thanks to the two that announced increases today. It gives me a spot to keep track of my YOC for my 9 core (investing 102) stocks, and my total payout for each year.

I need to find something to offset that ~4% and get it up a bit this year.

The OFFSET is the growth in share price -- which is what gives you TOTAL RETURN. Do not discount this fact. Chasing YIELD only will have you being real upset with yourself and your account when we DO - and yes we will - get a correction. 4% dividend is good --- and coupled with growth -- it should be 9 or 10% a year. HUGE in this low interest rate environment.


Some of my core holdings are already UP 8 and 9% this year. Dude -- that's a whole years "growth" expectation in 6 weeks!! Will it last?? I'd love to think so -- but I also know why there are AVERAGES.... and if I hold on to the 8 or 9% to finish up the year - I'll be a happy man. So that means that at some point we're going to look like yo-yo's.... it can't just keep going up up up. Now that's not saying it can't go up 20% - but then my guess is we don't hold on to all of that. Love to.... but don't spend it.

[GregWeld]

Originally Posted by XLexusTech

Greg any thoughts on the new strategy AAPL is potentially going to do.
"IPrefs"

I don't have any thoughts about Apple except that I love their products. I have no position in the stock -- too scary for me. Great company. Scary stock.

When EVERYONE is talking about "THE STOCK" it's time to run like hell IMHO.


Like when everyone was dot.bomb.... and everyone was flipping houses.... and everyone I know SAID Apple was going to 1000 and GOLD was going to 2000.... RUN!

[toy71camaro]

Originally Posted by GregWeld

The OFFSET is the growth in share price -- which is what gives you TOTAL RETURN. Do not discount this fact. Chasing YIELD only will have you being real upset with yourself and your account when we DO - and yes we will - get a correction. 4% dividend is good --- and coupled with growth -- it should be 9 or 10% a year. HUGE in this low interest rate environment.


Some of my core holdings are already UP 8 and 9% this year. Dude -- that's a whole years "growth" expectation in 6 weeks!! Will it last?? I'd love to think so -- but I also know why there are AVERAGES.... and if I hold on to the 8 or 9% to finish up the year - I'll be a happy man. So that means that at some point we're going to look like yo-yo's.... it can't just keep going up up up. Now that's not saying it can't go up 20% - but then my guess is we don't hold on to all of that. Love to.... but don't spend it.

Good point. that was in the back of my mind. I was explaining that to my GF last night over dinner, but when i wrote this, i didn't think about that.

The little man on wall street doesn't like me now that I rebalanced my 401k into and handful of diff mutual funds. Those are taking a hit. But he did seem to forget about my Investing 102 stocks, they're doing decent. lol.

And speaking of stock growth and total growth (stock + div), is there a way to calculate that? I'd like to keep track. Or is there a tool/page you use that gives you that basic info?

Edit: after a little further thinking about it.. to calc growth wouldnt you simply take your average purchase price and compare it against the current price? or would it be better to take your purchase cost, compared against the current value? If you do the 2nd option, then it seems you may be able to take your purchase cost and compare it against the current value + dividend payouts to get the total growth? Im not sure if thats right.. its been too long since math class. LOL

Edit 2: i think this explains it: http://stocks.about.com/od/evaluatin...ormualaeva.htm

[GregWeld]

Originally Posted by toy71camaro

Good point. that was in the back of my mind. I was explaining that to my GF last night over dinner, but when i wrote this, i didn't think about that.

The little man on wall street doesn't like me now that I rebalanced my 401k into and handful of diff mutual funds. Those are taking a hit. But he did seem to forget about my Investing 102 stocks, they're doing decent. lol.

And speaking of stock growth and total growth (stock + div), is there a way to calculate that? I'd like to keep track. Or is there a tool/page you use that gives you that basic info?

Edit: after a little further thinking about it.. to calc growth wouldnt you simply take your average purchase price and compare it against the current price? or would it be better to take your purchase cost, compared against the current value? If you do the 2nd option, then it seems you may be able to take your purchase cost and compare it against the current value + dividend payouts to get the total growth? Im not sure if thats right.. its been too long since math class. LOL

Edit 2: i think this explains it: http://stocks.about.com/od/evaluatin...ormualaeva.htm

YES -- that explains it.

[GregWeld]

For those of you with Charles Schwab accounts ---- that like to see how they're doing but can't do all the math.... There's a real easy way for you to see.


Log in to your Schwab account


Under the "Accounts" tab go to PORTFOLIO PERFORMANCE


Once there - it will take a bit to do it's calculations so give it a minute.


Now -- I take my cash in and out of here -- and I DO NOT re-invest my dividends so I CHANGE a setting that you'll find on the far right (Just below "Pinter Friendly" and "Spreadsheet"). Click on CHANGE -- and change the calculator to PERSONAL RATE OF RETURN... I also have this set as my default calculation - because now it calculates cash flow as part of the return (dividends).

From this point you can select what you want to see -- i.e., Year to Date - One Year - QTD (Quarter to date) etc.



So --- My Year to Date is 5.89% (over 11% using the Personal rate of Return calculation page) (obviously since we're in the first quarter this is the same as Quarter to Date). My three year is 62.24%

I'm posting this because I want you guys to see that it's not just all about the dividend --- in other words --- it's about the TOTAL RETURN -- growth plus that magic cash cow called the dividend.

Okay -- HAVE FUN! You might just be surprised about how well you're doing! I hope so!

[GregWeld]

So now that you're "there" in your PORTFOLIO PERFORMANCE



Note that there are other items you can select:


Returns is where we are currently but there is also "Health" and "Quarterly Portfolio Profile"


But more importantly under the RETURN tab

is

Portfolio Performance -- and Risk & Return -- and Asset Class Performance etc


Play around in here and just to use ASSET CLASS PERFORMANCE --- this tab will show you where you're invested --- and give you benchmarks -- and compares YOUR performance against that benchmark.



My account (this one Schwab account I use for this thread) shows me invested in:

56.9% Large Cap Equity

17.3% Small Cap Equity

19.9% Fixed Income

5.9% Cash (gotta have some cash dude!!)



So just play around with these pages and see that Schwab does a great job doing all this WORK for you.

[pw2006]

Thanks Greg! I have played around with most of the tabs, but never the change button. My 401k is with Schwab, and I like reviewing my Personal Rate of Return, but never found it for my other Schwab accounts. Very cool and thanks again!

BTW- I have way too much sitting in cash (20%) and fixed income (45%) right now due to a big sale in November. I have been adding to my holdings every Monday since Nov. Kinda hoping for a pullback so I can back up the truck and put these guys to work.