05-01-2014, 06:44 AM
It is possible to exert some degree of influence over emotions, in part by choosing which metrics you will use to evaluate the performance of your holdings. I use dividend income and dividend growth rates as two important ones. When I look at my spreadsheet, I see the dividend payments for each company increase a bit with each payment. due to two factors, dividend increases and a slightly higher number of shares due to reinvestment of the dividends.
Prices fluctuate, income increases.
I also have portfolio rules - call them strong guidelines if you wish, that help me in the decision on when to sell my share in a company. So, when INTC did not increase their dividend and paid the same amount for the 5th quarter running, no problem. Sell. No emotion involved in it.
When KMB increased their dividend less than 4% in the most recent announcement, no problem - it is on probation and if the next raise is less than 5% I will sell it.
There is allowance for company-specific information that might contravene some of the rules. For example, O had a great big raise last year when it completed the acquisition of another REIT. Since then dividend raises have been small but regular. I viewed that large raise - it was between 15 and 20% - as moving dividend increases forward and did not expect much over this year and into next. We'll see what happens in 2015.
Prices fluctuate, income increases.
I also have portfolio rules - call them strong guidelines if you wish, that help me in the decision on when to sell my share in a company. So, when INTC did not increase their dividend and paid the same amount for the 5th quarter running, no problem. Sell. No emotion involved in it.
When KMB increased their dividend less than 4% in the most recent announcement, no problem - it is on probation and if the next raise is less than 5% I will sell it.
There is allowance for company-specific information that might contravene some of the rules. For example, O had a great big raise last year when it completed the acquisition of another REIT. Since then dividend raises have been small but regular. I viewed that large raise - it was between 15 and 20% - as moving dividend increases forward and did not expect much over this year and into next. We'll see what happens in 2015.