DGI For The DIY

[fenders53]

(03-02-2021, 09:05 AM)EricL Wrote:

(03-02-2021, 08:41 AM)fenders53 Wrote:

(03-01-2021, 12:07 PM)EricL Wrote:

(03-01-2021, 11:41 AM)fenders53 Wrote: Always a good read.  It will be more fun with DRP shut off.  I would even be on board with your no trim policy if it was done with some upper limit of sanity.  You use Fast Graphs and know what that means.  If you have forgotten the market will remind you eventually.  

I'll do my best to keep sanity in check, but I've learned over the last fifteen years that I've made many more mistakes selling good companies than buying them.

It's one thing to have a giant nest egg you need to protect at retirement, but in accumulation stage like me, I'm learning that cutting winners back isn't the best way to maximize returns.

You only need to find a couple MNST, NFLX, AAPL, CMG, AMZN, etc. over the years to do well. But constantly trimming them off is counterproductive.

I've trimmed what's turned out be 36 shares of AAPL and nearly half my MSFT position over the last several years in this portfolio A few replacements have fared okay, but not nearly as well as those two. I think this new approach will help keep me from making that mistake again, while still allowing me to scratch the itch to tinker with my quarterly purchases.

I hear what you are saying.  We all have a few sells we regret if we've been in this game for long.  I try to trim gradually if it's a winner, and I am learning to get out of denial and trim losers much faster.  That acceptance can be even harder for some of us.  That's been my biggest mistake.  

But as I have stated before our opinions are jaded by about the longest bull market in history, or whatever happens to occur next.  I ran with MSFT during it's true growth period and trimmed nothing, then I eventually wished I had trimmed it 15yrs earlier than I did and put it in just about any Aristocrat.  I had 15 years to get back into MSFT after they showed signs of finally turning it around.  My real lesson was valuation matters eventually.  All that said, hindsight is 20/20, and I am just stirring conversation because you take the time to share your portfolio with us.  I could just give you an obligatory "Congrats" but I actually track what you are doing.  I'll enjoy watching you add to your port.  It doesn't matter if it's just a few shares.  The decision process has the same value IMO because it matters to you.

Thanks, I always appreciate the feedback and discussion from you. That's why I started writing about my journey, as a way to help others following along, but also to learn more myself through discussion with people who've been doing it a lot longer than I have.

I've decided to write a book but I am going to wait until I am 85yrs old.    I've figured out you need to be about as old as Buffet to see it all.  I thought I had seen it all, then in just a few years some stiff tariffs, a pandemic, zero rates in the US, and people dressed for a Halloween Frat party taking over the US Capitol for awhile.  What's next lol?  I'll never stop learning, and to be honest I learn more from younger people now.  Folks my age tend to be WAY too set in how they think things oughta be in this world, and miss the bus on the future.  I still converse with the old Army Colonel that got me started investing many decades ago.  I spent months trying to convincing him to just adjust his "port lean" a bit for political reality and not cash out when Biden's election appeared extremely likely to me.  Thankfully he didn't cash out, but that was hard work.  I owed him that much.  He trimmed some winners and regrets it now.  He's now interested in some renewables recommendations after they tripled.  Us boomers are annoying sometimes.  

[EricL]

Dividend Growth Digest for March, showing my income growth for January and February, and recent dividend increase announcements in the portfolio.

I also voice my frustrations with STAG Industrial, which has taken the growth out of dividend growth investing.

[ken-do-nim]

I love reading your blog. I had thought to just compare my overall dividends at an annual level to see progress, but I see you do it monthly, which is kind of neat. I wonder if $206 is an average month for you, or whether it comes lumpy.

Thanks for the tip on Ameriprise Financial! I have this huge list of stocks to buy this coming week but it was light on financials.

[EricL]

BLK, TROW, OZK, PRI and ICE are some other good financials to consider.

[ken-do-nim]

(03-14-2021, 04:43 PM)EricL Wrote: BLK, TROW, OZK, PRI and ICE are some other good financials to consider.

Great list thanks!

[fenders53]

Enjoyed the blog as always. Congrats on the new pooch. A lot of good comes from pet ownership as long as the children are responsible for some the care responsibilities. My daughter did a role reversal on me. She got a Lab and a Shepherd puppy, then about 15 months later she takes a job hours away and an apartment where she can't have large dogs. So I guess you could say she got her parents a dog. At least for awhile.

Ken

Tracking dividends quarterly will provide some encouragement. Track the Div growth rate as well as the gross numbers though. Just as Eric did, it makes it clear which ones are not on the right track for returns a decade from now. STAG isn't a terrible company to own, but the growth rate might as well be zero. If it's not a short term problem, there is probably a similar option out there with a 5%+ growth rate.

I would definitely average into financials if you buy one that has run up a lot lately. Macro financials will probably remain volatile and provide a reason, real or perceived for the market to be skittish on them temporarily. You can usually get a very good deal on some shares when they go extremely out of favor temporarily. That's been at least an annual event for years now. For the sector anyway.

[ken-do-nim]

(03-14-2021, 05:18 PM)fenders53 Wrote: Enjoyed the blog as always.  Congrats on the new pooch.  A lot of good comes from pet ownership as long as the children are responsible for some the care responsibilities.  My daughter did a role reversal on me.  She got a Lab and a Shepherd puppy, then about 15 months later she takes a job hours away and an apartment where she can't have large dogs.  So I guess you could say she got her parents a dog.    At least for awhile.

Ken

Tracking dividends quarterly will provide some encouragement.  Track the Div growth rate as well as the gross numbers though.  Just as Eric did, it makes it clear which ones are not on the right track for returns a decade from now.  STAG isn't a terrible company to own, but the growth rate might as well be zero.  If it's not a short term problem, there is probably a similar option out there with a 5%+ growth rate.          

I would definitely average into financials if you buy one that has run up a lot lately.  Macro financials will probably remain volatile and provide a reason, real or perceived for the market to be skittish on them temporarily.  You can usually get a very good deal on some shares when they go extremely out of favor temporarily.  That's been at least an annual event for years now.  For the sector anyway.

My daughter wants a dog too, but it would end up being my dog sooner rather than later.

Yeah, quarterly does seem better than monthly.  Rate as well as gross too, check!

The financial companies all look to be spiking now, just as the techs are sinking.  I will only nibble I agree it's not the right time to jump in.  Speaking of tech, just read an article about the semi-conductor shortage and how only Taiwan Semiconductor and Samsung makes them.  Since you can't buy Samsung directly, I think I will triple down on TSM.

[fenders53]

(03-14-2021, 08:07 PM)ken-do-nim Wrote:

(03-14-2021, 05:18 PM)fenders53 Wrote: Enjoyed the blog as always.  Congrats on the new pooch.  A lot of good comes from pet ownership as long as the children are responsible for some the care responsibilities.  My daughter did a role reversal on me.  She got a Lab and a Shepherd puppy, then about 15 months later she takes a job hours away and an apartment where she can't have large dogs.  So I guess you could say she got her parents a dog.    At least for awhile.

Ken

Tracking dividends quarterly will provide some encouragement.  Track the Div growth rate as well as the gross numbers though.  Just as Eric did, it makes it clear which ones are not on the right track for returns a decade from now.  STAG isn't a terrible company to own, but the growth rate might as well be zero.  If it's not a short term problem, there is probably a similar option out there with a 5%+ growth rate.          

I would definitely average into financials if you buy one that has run up a lot lately.  Macro financials will probably remain volatile and provide a reason, real or perceived for the market to be skittish on them temporarily.  You can usually get a very good deal on some shares when they go extremely out of favor temporarily.  That's been at least an annual event for years now.  For the sector anyway.

My daughter wants a dog too, but it would end up being my dog sooner rather than later.

Yeah, quarterly does seem better than monthly.  Rate as well as gross too, check!

The financial companies all look to be spiking now, just as the techs are sinking.  I will only nibble I agree it's not the right time to jump in.  Speaking of tech, just read an article about the semi-conductor shortage and how only Taiwan Semiconductor and Samsung makes them.  Since you can't buy Samsung directly, I think I will triple down on TSM.

I'm not good at it but getting a little deep at the correct time is how cyclicals pay off.  Just do it over time, and if you go overweight it HAS to be a rock solid company that that can ride out the unexpected, otherwise you are just gambling and that's not DGI.  We never know where the bottom is.  With no commissions I've made many small buys on TSM.  I wouldn't be happy if I'd went all in FEB when I thought the dips were decent.  If I catch a good run through 2021 I'll shift some of it into something else I want to own.  

I still suggest a token position in a few great DGI stocks that are just way overvalue. It will be on your radar and you'll know when the price is more reasonable.  Regarding financials I made a lot on MET doubling down on the Covid crash.  I'd never suggest you get in deep MET now even though the dividend is still pretty good.   I just don't enjoy being down for 3-5 years on a foolish entry.  Some dividend paying financials are truth growth stocks.  Most are not.

And tracking dividends quarterly will generally get a payment from most or all of your holdings. Div pay dates can change of course. Monthly doesn't mean much until you have a full year of history.

[stockguru]

I wouldn't be buying much or adding to anything right now with DGI stocks. There has been such a run in the dividend stocks of late I feel like a big correction is on the way. Tech on the other hand although over valued at least has the growth to support it. I would be buying tech on this correction and adding to TSM, AVGO, TXN , AAPL and MSFT. Names like that because people will be rotating out of those dividend stocks for tech soon.

And I still love the DGI names just not at these over valued prices currently. I would need at least a 12-15% correction just to feel comfortable buying or adding. I'm not selling just not putting new money in except maybe names like MMM, NOC, LMT and LHX

That's just my opinion.

[fenders53]

Seems like a sound opinion to me. Other than a few tech DGI names everything that appears near fair value is down because there is real political risk. Defense and Pharma DGI look good for an entry position but they could definitely see lower prices. Same with the growing utilities. I wouldn't be afraid of a starter position in PEP for a consumer staples stock. Stimulus is massive so a big market dip soon doesn't seem likely. An infrastructure bill seems likely but I expect a protracted battle. That isnt passing in a month. The choppiness will come.

[EricL]

I agree that PEP seems like a decent bet at current prices. A 3% yield with high single-digit growth expected. Have to think it will benefit from the economy reopening with its sales to restaurants and entertainment venues, and it hasn't run up at all compared with those types in the discretionary sector.

[fenders53]

From Eric's list DG wont be a bad one to start on. Div isn't exciting yet but I am pretty confident they have a clear path for five years of growth. Plenty of corn fields that don't have a DG yet.

Plenty of good longterm big box retail but maybe only good for a nibble here. Comps are going to be tough but free money puts any thoughts of a hard pullback soon in doubt.

This isn't Ken's thread but he's the only one starting a fresh DGI port around here. Sitting on excessive cash for long is rarely a great idea, nor is paying 20% above historical valuation in a large purchase without some growth projections to justify it.