DGI For The DIY

[fenders53]

(04-13-2021, 10:30 AM)EricL Wrote:

(04-13-2021, 09:23 AM)fenders53 Wrote: I assume your parents are just a little older than I am.  I am trying to think how this looks in two years.  I like almost all the names you've chosen.  I guess the thoughts that come to mind after a quick look are these.

-Get rid of some redundancy...  XOM/CVX, PM -MO, ATT-VZ.  These stocks practically mirror each other. One too many DIV ETFs.  This list is adequately diversified already.  
-I think you could find a better industrial than MMM after the run up.
-Don't do a lump sum entry on the individual stocks you know are 20% or more overvalued today. Just a token position for now.  I can name names but I think you know.  
-Park some of the funds where they are fairly safe briefly.  In a list this long some deals will happen soon enough.  Just make sure you can buy at least the first dip or two.  
-Don't DRP the individual stocks.  Use the proceeds to buy more immediate income on dips.  You can grow the income quarterly like you do with your own port.  That would seem like the best direction to focus for them.

1. I have redundancy because I am buying the individual stocks for a bit of an income boost, but I'm not confident enough in XOM and T to put it all solely in them for the sector.
2. MMM still yields 3%, and I see it as a safe yield.
3. I'm guessing this would be bought out over the course of 6-12 months. I don't think they'd be comfortable doing it in one fell swoop.
4. I'm thinking they'll keep $50k in cash, with this $100k going into brokerage that will be invested over several months.
5. I don't think we will drip or reinvest dividends in anything. Just let them pool over time for withdrawal. I want to keep accounting as simple as possible for tax purposes since this would be a taxable account.

I like this plan.  I'd let you manage my money and I consider that a high compliment.  I am glad you are averaging in.  Doesn't even matter if it turns out to be wrong.  It's appropriate risk management for this portfolio, at this time in market history.