12-13-2018, 10:09 AM
(12-12-2018, 10:06 PM)fenders53 Wrote: Otter, take this in the context I intend it, for the purpose of our discussion. I hope you know I am laughing when I mess with you guys and gals to stir up conversation. It's just my personality and I mean no harm. I get a lot of good stock ideas to research from you guys, and sometimes I even buy them. I'm grateful for the help I receive here.
That said, how can you justify holding 80 stocks? It sounds like stock collecting. You have your own S&P ETF.More specifically what does it accomplish for you? It may not hurt anything, and you are certainly diversified five times over. If I am honest I only have a dozen great ideas in any particular year, unless the market is like it is right now with marketwide sales. I don't believe I can properly keep track of 80 stock and make sound investment rules, not even 30, unless I just do what others do on TV and stock forums.
I very much like your strategy to buy and hold. That should be the default strategy for any DGI investor. But there are times when great companies reach crazy overvaluation, especially if you hold 80 stocks. That's when it's time to put that stock in an IRA and trim it if that is age appropriate advice. Not suggesting one must cash out of their best stocks. Pigs get slaughtered so I take a profit and park it somewhere safe for redeployment. 95% of my port is IRA or Roth IRA so I don't need to wait around for the stock to return to reality and take the loss because there are no tax liabilities.
No harm taken.
The short answer on how I deal with tracking 80 stocks is, I don't. Once I've made the buy decision, the work is done. The buy criteria are designed to ensure that a reasonable value for the income stream is obtained at the time of purchase. I can't track 80 stocks in detail, and I don't need to. The risk mitigation is built in to the buy criteria, and diversification across sectors and holdings. If any one holding goes to zero or cuts a dividend, it's not a big deal. It's essentially an index of DGI stocks that represented fair (or better) value at the time of purchase, nothing more, nothing less. So far, current yield has averaged around 3.5-3.75% for the past several years, and annual dividend growth (not counting reinvested dividends) averages around 8%.
I do have Seeking Alpha news alerts set up for each of my holdings, and I'll read an article that seems interesting every now and again. Every once in awhile I may get lucky and spot a rotten apple like GE and toss it out, but I probably won't catch every dog in the portfolio (and don't need to).
If there is a broad-based and permanent impairment of a significant portion of my holdings, that means something has gone horribly wrong with the global economy, in which case, all of this investing stuff has been pointless. The holdings themselves (which are not all equal weighted), broken out by sector, are:
Consumer Discretionary:
DIS, F, HD, LEG, SCI, TGT, VFC
Consumer Staples:
ADM, BTI, BUD, CLX, CVS, DEO, GIS, KHC, KMB, MO, PG, SJM, PEP, PM, UL, WBA
Energy:
BP, CVX, ENB, XOM
Financials:
AFL, CFR, CTBI, EV, JPM, ORI, PRU, RY, SLF, TD, TRI, TROW, WFC
Healthcare:
A, ABBV, AMGN, CAH, JNJ, LLY, MRK, PFE, SNY
Industrials:
BA, DOV, EMR, ETN, GWW, JCI, SIEGY, UPS
IT:
AAPL, ADP, CSCO, IBM, INTC, QCOM, SQ (No dividend)
Materials:
BMS, DWDP, LYB, NUE, SON
REIT:
BPY, FRT, NNN, O, SKT, WPC
Telco:
BT, T, VZ
Utilities:
AEP, BEP, BIP, BKH, CNP, D, DUK, NGG, PPL, SO
Even with this many holdings, there are still quality companies out there that I wouldn't mind buying next time they present an attractive value. ED, KO, MSFT, and WMT immediately come to mind. I doubt I would regret adding any of those to my holdings.