Hi Randy:
I think you are looking for a magic bullet hidden in what I said. I don’t have a magic bullet and I don’t know any more than anyone else. In fact, I probably know less. Lets try to do it a little simpler
Randy and anyone else “interested” please do the following
Post the following
- How many stocks in your portfolio
- How many pay dividends
- How many stocks that pay dividends are up in value-How long do you own them --What percentage of your portfolio are each of them (Start off with 5 if you have that many)
- Now post the same for your losers (5 here also if you have that many)
You must have liked all of the stocks you listed above because you bought them
There are thousands of stocks–>>>> It doesn’t do much to tell me how to select the ones to buy<<<< You don’t need many. You might even own the perfect ones right now.
I own only 8 (Saul owns I think he said 12-14) If you own a limited number of stocks you can buy larger quantities IF THEY GO UP AND THE DIVIDENDS INCREASE AND GROW YOUR PORTFOLIO
There are other refinements-I like smaller cap stocks with growing dividends (Partially deferred or fully deferred if possible) because if they keep growing you have an opportunity of a $1,000,000 winner or more. HASI is a perfect example IMHO They are public about 4 years and were privately held for 30 years before. They just increased the dividend 10% and announced the 2016 distributions were 100% tax deferred (In 2014 they were 90% deferred and in 2015 about 75% deferred)
The first thing to do is to sell a loser and use the proceeds to add to a winner. By doing that you improve your portfolio value AND THEREFOR MAKE MONEY. Do small steps until you can see the progress. Adding a new stock doesn’t have to be a major purchase. It can be small 100-200 shares or whatever is in your budget.
$3800 buys you 200 shares of HASI and $264 of annual income or more if you drip the $100% tax deferred divvies into additional shares. That same $3800 buys you 4.5 Shares of AMXN at $835.77 per share with no dividend of any kind. Any you are buying AMZN with a market cap of $397B The HASI market cap is $882 M. I believe HASI has a better chance to double or triple or more from an $882 M market cap than AMZN to double or triple from a $397 B market cap. Also By dripping HASI tax deferred dividends, HASI gives you the opportunity to buy and pay for the shares for you. If you buy and see progress you can keep adding as HASI keeps growing.
The best part of it all–You make the money with your HASI investment, while Bezos makes the money with your AMZN investment.
b&w
4 Likes
Hi b&w,
Thanks for the reply, sorry for the delayed response. I will have to walk through your selected path of picking the winning dividend stocks from my portfolio. I actually have a good mix of dividend and growth.
I appreciate your input here on the board as it gives a different perspective and that is always good. I don’t understand your comment of buying AMZN paying Bezos. A growth company is not all that different from a dividend company. They are just plowing the earnings back into a growing company. My AMZN shares have about a $350 basis and are in a IRA so the gains are real and they are mine. You have a point about company size and growth, that is true whether they pay dividends or not.
I do appreciate dividend growers though. I “manage” my mom’s portfolio and have been basically buying dividend paying stocks for a long time, I have her take the dividends in cash though and buy a new stock or add to an old one whenever the cash builds up. It’s a very stable diversified portfolio that keeps increasing in dividends. I sell the ones that don’t work out and they allow for tax losses and to buy new. Pretty simple and actually she was up about 13% last year with about 20% of assets in short term bond ETFs. Better than me last year, but her returns don’t sound anywhere near yours. Probably at lower risk though…
Anyway, I will review my port, looking for potential dividend payers to add. One you might want to look at is CLNS. A reit that is the result of a recent merger with two other Reit’s that were not being run well and therefore had seen significant stock price drop. The management from the good reit CLNY is now in charge and has the potential to increase dividends as it gets the merged company moving in the right direction. Present dividend is over 7%.
Anyway, Thanks for your input. I like your thought process…still trying to figure out how you averaged the growth you describe with dividend payers but I am paying attention…
Randy
Long AMZN among many others…
Hi Randy:
I appreciate your input here on the board as it gives a different perspective and that is always good. I don’t understand your comment of buying AMZN paying Bezos.
Your investment in AMZn of approximately $350 a share was invested in AMZN with BEZOS running the company. You receive No Pay for this investment only the hope that someone will come along later and buy your shares at a higher price than you paid for them. That’s a big leap of faith on your part. Mr Bezos meanwhile has all the money from you and others like you and operates the company. But he doesn’t have the same big leap of faith in the company. He draws a very large salary, gets king size benefits and bonuses and probably, to add icing to the cake king size stock options also. And all the while you wait.
. My AMZN shares have about a $350 basis and are in a IRA so the gains are real and they are mine
That’s not exactly true. If you sell Monday at the $810 price it closed at on Friday the $810 in your IRA will be real BUT NOT YOURS. For you to get the money it will have to removed from your IRA and FED and STATE taxes will have to be paid and that could boost you up a notch or two in the brackets and create a lot of other problems.
That’s another reason I keep talking about “deferral of dividends” and the importance of them. Nobody has said one word in answer to all my postings about my harping on “deferral” of income.
I think it would be best to transfer this discussion to the MF REITS board because Saul has declared it to be off-topic and I agree with him. So if anyone would be interested in continuing the conversation that’s where I’ll be.
Thanks to all for your patience. I hope you find it was worth your while to read my posts regarding my portfolio.
Best regards
b&w
3 Likes
Since this thread is entitled Psychology question for Saul (and has gotten way off topic too), I think I get to say something:
I don’t understand separating dividends and capital gains in one’s mind. The goal is to increase the total value of your assets. You can live off capital gains just as well as off dividends (I’ve been doing it for 20 and a half years now). When I someone says “Sure the stock is down 10% this year, but it’s paying a 4% dividend, and I can use that for living expenses, and buy more!” to me that’s a cognitive dissonance. To me, the asset we’re discussing has simply decreased in value by six percent.
As for continuing a discussion of REITS etc, I STRONGLY agree with b&w who just wrote:
I think it would be best to transfer this discussion to the MF REITS board because Saul has declared it to be off-topic and I agree with him. So if anyone would be interested in continuing the conversation that’s where I’ll be.
Thanks,
Saul
8 Likes