What are your winners & losers today?

[ken-do-nim]

I didn't even check yesterday, saved myself a good deal of anguish no doubt. Checked today, and voila, back at an all-time high (both taxable and ROTH). RETL was the biggest gainer, but just about everything was up.

[fenders53]

Today probably fixed a lot of ports. I'm only about $1K past my ATH today but this was a good day. Especially considering my largest sector by far is UTES which were mostly down. I am way past my 2021 goal. If the market creeps higher much longer I'll probably start hoarding a little cash and wait for whatever drama brings us down some month soon. I can make about zero sense out of what moves the market right now. Media literally makes up a new narrative to be bullish or bearish every day. Your comments on rates yesterday was spot on. They are making up a new reason for whatever the market happens to do this week.

[NilesMike]

Safe to go long Sunday night or Monday AM

[ken-do-nim]

I hope everyone is enjoying this lively market.

My taxable account broke the $200k barrier today, led by SOXL, FAS, and ... yes, OXLC. OXLC of the 10.93% yield jumped up 2% today. LMT and DFEN were today's modest losers. (And in the surge of the last couple of weeks, my overall taxable account's yield has dropped from 3% to 2.90%; I was kind of hoping to keep it pinned at 3% but that will require rebalancing.)

[fenders53]

That's a good problem to have if your port div yield declines due to SP appreciation. Your yield on cost hasn't changed if all dividends are still intact.

[ken-do-nim]

(07-12-2021, 03:47 PM)fenders53 Wrote: That's a good problem to have if your port div yield declines due to SP appreciation.  Your yield on cost hasn't changed if all dividends are still intact.

I recorded all the Q2 end numbers.  So when I publish my Q3 report, it will be interesting to see if any of those yields on cost have changed.  My eyes are mainly on HTGC, because it has raised its dividend every quarter for the last 4 quarters.

2020 Q3: .32
2020 Q4: .34
2021 Q1: .37
2021 Q2: .39

[fenders53]

(07-12-2021, 04:34 PM)ken-do-nim Wrote:

(07-12-2021, 03:47 PM)fenders53 Wrote: That's a good problem to have if your port div yield declines due to SP appreciation.  Your yield on cost hasn't changed if all dividends are still intact.

I recorded all the Q2 end numbers.  So when I publish my Q3 report, it will be interesting to see if any of those yields on cost have changed.  My eyes are mainly on HTGC, because it has raised its dividend every quarter for the last 4 quarters.

2020 Q3: .32
2020 Q4: .34
2021 Q1: .37
2021 Q2: .39

Maybe you understand this but lets keep the numbers at 5th grade math simple since we are typing all this.  

Pretend those dividends you posted are annual.  2020 you got 32 cents.  Your HTGC shares cost $10 so your yield is 3.2%.  Four years pass and and that 39 cents is your 2024 dividend.  Your yield on cost is now 3.9%.  If you buy new shares along the way at different share prices your yield will be whatever it is the date of purchases but only for the new shares.  If the Div never drops your YOC on those first share just keeps going up.  This is the secret to Dividend Aristocrats DGI stocks.  JNJ dividend is less than amazing on a new purchase.  If you bought 100 shares 30 years ago your YOC is so high you are getting your purchase price paid back in just a few years.  

Here is your homework assignment.  I paid $7.50 for my first 100 shares of XEL.  Check the current dividend yield and tell me what my yield on cost is for those shares?  I don't even know but it's a happy number.  I reinvested the dividend for 20 years.  The yield on cost for the next 100 shares is higher as the stock climbed but XEL DIVs paid for all of them.  This is why a DGI investor doesn't care so much when his stock's SP goes completely flat for several years.  If he has held the stock for years the yield is just fine as the Div grew.

[ken-do-nim]

Okay, let's see. XEL is currently at $67.84/share. It most recently paid $0.4575 per share in Q2. That works out to an annual yield of 2.6975% (0.4575*4 / 67.84). You purchased originally at $7.50/share (wow!). That works out to an annual yield of 24.4% on those first 100 shares. My first 30 shares of XEL were purchased at $63.405. Therefore my effective yield for those shares is now 2.886%.

That said, my path to $3,000,000 and then living off the dividends is more concentrated in growth, then switching over to dividend-producers at the end (age 60).

[fenders53]

Growth definitely accounted for most of my port's success. I bought XEL-JNJ-PFE with a DGI intent. PFE was actually more growth oriented at the time. Valuation was too high and it's been a lousy longterm hold. The other two were very good and so goes investing.

Back on topic if somebody bought some shares of PM-XOM etc 40 years ago the shares basically paid for themselves many times over. They can just call that part of their port done. I trust XEL to do well enough and not concerned if it goes nowhere for extended periods. I happen to think they have some growthy years just ahead though so even now I will nibble a dip.

[fenders53]

Can't sleep so here is another method for DGI. You have 6 core Aristocrat level stocks. Just an example but say LOW has historically yielded between 1.5% and 4%. History says purchases above 3% turn out great and below 2% you are usually waiting a long time for out performance. You could literally not look at the stock price and make purchases with a high chance of success. This does not work on stocks with unreliable dividends.

It's what NilesMike mentioned when you started your DGI. The market's current valuation puts most stocks in the don't buy range unfortunately.

[ken-do-nim]

(07-13-2021, 04:50 AM)fenders53 Wrote: Can't sleep so here is another method for DGI.  You have 6 core Aristocrat level stocks.  Just an example but say LOW has historically yielded between 1.5% and 4%.  History says purchases above 3% turn out great and below 2% you are usually waiting a long time for out performance.  You could literally not look at the stock price and make purchases with a high chance of success.  This does not work on stocks with unreliable dividends.

It's what NilesMike mentioned when you started your DGI.  The market's current valuation puts most stocks in the don't buy range unfortunately.

Right; makes sense because a high yield percentage correlates to a moderate stock price.

As for most of the equities being in the "don't buy range", well I'm not buying in a vacuum.  The bulk of the DGI part of my portfolio (as well as the Income portion) was obtained from a cashout refinance.  The value of my house goes up or down regardless of the principal, so that money was literally doing nothing for me except keep my monthly payments lower.  Now that's it in the market, it pays me dividends to help offset that monthly payment difference, and has grown modestly (or in cases like Target, exceptionally).  I do agree that even March was better for buying stocks than right now in July.  Heh, I don't have any new money anyway.  The other contributor to my portfolio has been lateral moves of cashing out company stock to buy something different over in the E*Trade account, which we've already discussed is by and large a worthy enterprise.  We'll see what's reasonably valued when the trading window opens again.

Much of my financial future still rests not on the market, but whether my daughter goes right to college, or stops to work for a while.  Because child support ends after she graduates high school if she goes into the work force, but continues if she goes to college.  Obviously I'm not going to say a word if college is her choice, but she has mentioned (on her own) recently the idea that she'd work at a pet store or vet's office after high school.

[fenders53]

(07-13-2021, 07:08 AM)ken-do-nim Wrote:

(07-13-2021, 04:50 AM)fenders53 Wrote: Can't sleep so here is another method for DGI.  You have 6 core Aristocrat level stocks.  Just an example but say LOW has historically yielded between 1.5% and 4%.  History says purchases above 3% turn out great and below 2% you are usually waiting a long time for out performance.  You could literally not look at the stock price and make purchases with a high chance of success.  This does not work on stocks with unreliable dividends.

It's what NilesMike mentioned when you started your DGI.  The market's current valuation puts most stocks in the don't buy range unfortunately.

Right; makes sense because a high yield percentage correlates to a moderate stock price.

As for most of the equities being in the "don't buy range", well I'm not buying in a vacuum.  The bulk of the DGI part of my portfolio (as well as the Income portion) was obtained from a cashout refinance.  The value of my house goes up or down regardless of the principal, so that money was literally doing nothing for me except keep my monthly payments lower.  Now that's it in the market, it pays me dividends to help offset that monthly payment difference, and has grown modestly (or in cases like Target, exceptionally).  I do agree that even March was better for buying stocks than right now in July.  Heh, I don't have any new money anyway.  The other contributor to my portfolio has been lateral moves of cashing out company stock to buy something different over in the E*Trade account, which we've already discussed is by and large a worthy enterprise.  We'll see what's reasonably valued when the trading window opens again.

Much of my financial future still rests not on the market, but whether my daughter goes right to college, or stops to work for a while.  Because child support ends after she graduates high school if she goes into the work force, but continues if she goes to college.  Obviously I'm not going to say a word if college is her choice, but she has mentioned (on her own) recently the idea that she'd work at a pet store or vet's office after high school.

It will be a good method to use when you add to your true DGI positions.  It will also match up well with your desire to keep average yield high for the port.  Only time will tell if college is a great decision.  I wish my daughter had worked a few years first.  I knew it wasn't time but let her do her thing.