How much is enough?(buying stocks)

[Roadmap2Retire]

(08-19-2014, 10:36 PM)EricL Wrote:

(08-19-2014, 10:22 PM)TopRamenTrader Wrote: This is for the young guns out there.

So as i search the interwebs for stocks with dividends in my range or purchase. (looking to put in 500 - 1000 a month?) i save a large portion of my paycheck and fight the temptation of a new car and reckless spending.

But what i was looking at was buying a stock like

SDT
@ 5.13
Div & Yield: 1.71(26.80)
EPS: 2.00
P/E: 2.56

Sounds nice. But as i read in another thread about " how long could they possibly keep that up?"

as someone who is on the lower end buying spectrum, is something like SDT that is considered high yield / risky even worth purchasing?

also does it have a place in a long term investors portfolio?

or would i be better off putting money in a pricier stock like aapl, VZ.

does more mean better or does it make sense to roll with quality over quantity.

Thanks for any future input.

I know its a lot to look at sorry but ive been battling with this idea for the past week.

I wouldn't touch SDT with a 10' pole, there is a reason its yielding 26.8%, and its not a good one.

Run away.

Fast.

Here is a recent article by a good contributor on Seeking Alpha talking about reserve write downs and reduced distributions. You don't want any part of these trusts (CHKR is another) as they were basically financial spin-offs from parent companies as a way to avoid adding more debt to the books when trying to fund drilling to hold production on leases.

If you are serious about dividend growth investing, stick to high quality companies with a good track record of increasing dividends. I know the allure of high yields is appealing, I am a former CHKR share holder and learned my lesson the hard way.

Couldnt have put it better myself. When I first started looking into dividend stocks and funds, I was attracted to closed end funds yielding 10% and I started buying up. The price kept going down and I kept buying. Eventually, I learned my lesson and sold the position and eventually came out with a small loss even after the 10% dividends.