08-11-2013, 09:57 AM
(This post was last modified: 08-11-2013, 09:59 AM by Horace Cugle.)
Well Eric you hit on my #1 pet peeve, LOL,
I have never understood the concept of equal weighting. I get you're trying to spread the money around and dampen the risk, and you absolutely need to diversify, but some stocks just plain offer better opportunity than others, and should be treated that way, IMO.
Take a company like PG, one of the best, most shareholder friendly companies you'll ever find. Why would I want to dilute that greatness with a bunch of other stuff? Sure it can take a dip like it did last year but I'd bet it will be the last man standing if it ever came to that. I am way in the minority on this, so take it for what it's worth.
If you're rolling it into another 401k or IRA you can't hold REITs. I mean you can but you'll have tax problems and nobody wants that.
MO is 6% off its high with a dividend increase coming soon. I've owned MO for over 16 years and I'd buy more here if I didn't already own enough. Same with PM, 8% off its high, dividend increase soon. Both are hold forever stocks in my book.
I'd also look seriously at COP. RDS.A is something I'm looking at too. They just raised the dividend to $3.60/$64.77 = 5.55% yield. Do your homework on this one though.
It also depends on how far you have to go until you retire, if that's what you're investing for. If you have time I'd suggest looking at a few of the really good dividend growers like WAG, TGT, CAT, KMI, WEC. Not the big yields you're hoping for but big dividend growth.
I own all of them except TGT and it's #1 on my list.
If somebody handed me $8k and I had time until I retired I'd probably do something like this (off the top of my head)......
50 WAG = $2500 (I really really love this company)
25 PM = $2200
25 COP = $1600
40 WEC = $1700
As I said in an other thread, if you have time before you retire don't obsess over current yield, rather obsess over getting more money in the market, because the best time to invest is when you have the money.
I have never understood the concept of equal weighting. I get you're trying to spread the money around and dampen the risk, and you absolutely need to diversify, but some stocks just plain offer better opportunity than others, and should be treated that way, IMO.
Take a company like PG, one of the best, most shareholder friendly companies you'll ever find. Why would I want to dilute that greatness with a bunch of other stuff? Sure it can take a dip like it did last year but I'd bet it will be the last man standing if it ever came to that. I am way in the minority on this, so take it for what it's worth.
If you're rolling it into another 401k or IRA you can't hold REITs. I mean you can but you'll have tax problems and nobody wants that.
MO is 6% off its high with a dividend increase coming soon. I've owned MO for over 16 years and I'd buy more here if I didn't already own enough. Same with PM, 8% off its high, dividend increase soon. Both are hold forever stocks in my book.
I'd also look seriously at COP. RDS.A is something I'm looking at too. They just raised the dividend to $3.60/$64.77 = 5.55% yield. Do your homework on this one though.
It also depends on how far you have to go until you retire, if that's what you're investing for. If you have time I'd suggest looking at a few of the really good dividend growers like WAG, TGT, CAT, KMI, WEC. Not the big yields you're hoping for but big dividend growth.
I own all of them except TGT and it's #1 on my list.
If somebody handed me $8k and I had time until I retired I'd probably do something like this (off the top of my head)......
50 WAG = $2500 (I really really love this company)
25 PM = $2200
25 COP = $1600
40 WEC = $1700
As I said in an other thread, if you have time before you retire don't obsess over current yield, rather obsess over getting more money in the market, because the best time to invest is when you have the money.