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+--- Thread: Why We Are Here (/showthread.php?tid=581)
Why We Are Here - Robandcindy2 - 06-05-2014
I have to share another masterpiece from Timothy McAleenan, Jr. "The Conservative Income Investor". ) Also a Seeking Alpha contributor.
His latest The Sequuoia Fund vs. Conoco Phillips clearly explains why we have chosen the dividend stock approach over the mutual fund approach.
A good read for anyone on the fence about our investment strategy.
Cheers!
Rob
RE: Why We Are Here - Dividend Watcher - 06-05-2014
The comparison was cute but he only talked about wealth. Sure, the COP grew larger because of the lack of ongoing management fees but what about the income stream?
I went and looked up their prospectus. The distributions are in the red box.
[attachment=67]
Since 2009, there has been only one dividend distribution of 2 cents. 2013 was a banner year for capital gains distributions but, at $3.40/share, that only works out to 1.5% at end of year pricing. In 2012, the only thing you got was share appreciation.
According to Mr. McAleenan, COP would be paying you over $16,000 per year in dividends. ( That made my eyes pop. [attachment=68]) Now that I can take to the bank and pay some bills.
Sequoia Fund has been an incredible wealth builder but when I retire I'm not so keen on selling portions of my investment "seed corn" just to pay the bills unless I have to. Let's face it, some of us may have to, including me, but I'll hold out as long as possible relying on the dividends first.
That, to me, is the essence of dividend growth investing.
RE: Why We Are Here - EricL - 06-05-2014
I agree with you guys, it was another eye opening article from Tim.
I still have an IRA parked in a mutual fund with a full service broker, who happens to be an extended family member. I've been struggling with this as I know I can do better than what the mutual fund is giving me now that I am becoming more experienced with DGI. Its not a huge sum of money so I haven't been in a big rush to make the move, but at some point I think I'll have to put my future retirement over my fear of offending him if I pull the account.