08-28-2013, 11:34 AM
Hey OK Red, are you from OK? I have spent a lot of time in Norman and OKC and absolutely loved the place.
I got on this topic when I went through our portfolios with a fine tooth comb and discovered that, with regards to when and how much a dividend stock will pay out, some of them were in the wrong portfolios. And a few didn't belong in either.
Since rising future income is what dividend growth is all about, it made sense to consider which "type" of dividend stocks have the best chance to produce greater income at a particular time.
Of course there's as many investing styles as there are investors, I'm just trying to develop something I have been overlooking; another investing criteria. It's not just a "how much" thing it's a "how much and WHEN" thing.
You've chosen to be in higher DG rates that makes perfect sense because you want your income to peak later, and it's exactly what I'm getting at.
For a young investor holding stocks like T, SO long term doesn't do what TGT, WAG type stocks will do. Why would a young investor pass on a chance for massive future income for high current income, when he can't use high current income because it's in an IRA?
The only things I can think of is the volatility caused by the uncertainties that come with faster growing stocks. He pays too much attention to the short term prices and eventually seeks out high yield to so he can feel like he's getting somewhere. Losing patience. That definitely describes me at times.
By the same token, a retired guy who wants max income today wouldn't be especially interested in WAG or TGT type stocks. If he is satisfied with a 5% yield and 3% DG to cover inflation, stocks like T and SO do that. And they can probably do it forever; cruise control.
T and SO type stocks are losing to to WAG and TGT type stocks after 10 years and the income from them explodes from there.
What I think is really interesting in a psychological sort of way is high yield for the retired guy seems a very logical/sensible/intuitive choice, but lower yield high DGR for younger guys, not so. I think because we are always drawn to higher current yield and want it.
All of this suggests that there is a Dividend Yield/Dividend Growth/Time curve we should be on.
I got on this topic when I went through our portfolios with a fine tooth comb and discovered that, with regards to when and how much a dividend stock will pay out, some of them were in the wrong portfolios. And a few didn't belong in either.
Since rising future income is what dividend growth is all about, it made sense to consider which "type" of dividend stocks have the best chance to produce greater income at a particular time.
Of course there's as many investing styles as there are investors, I'm just trying to develop something I have been overlooking; another investing criteria. It's not just a "how much" thing it's a "how much and WHEN" thing.
You've chosen to be in higher DG rates that makes perfect sense because you want your income to peak later, and it's exactly what I'm getting at.
For a young investor holding stocks like T, SO long term doesn't do what TGT, WAG type stocks will do. Why would a young investor pass on a chance for massive future income for high current income, when he can't use high current income because it's in an IRA?
The only things I can think of is the volatility caused by the uncertainties that come with faster growing stocks. He pays too much attention to the short term prices and eventually seeks out high yield to so he can feel like he's getting somewhere. Losing patience. That definitely describes me at times.
By the same token, a retired guy who wants max income today wouldn't be especially interested in WAG or TGT type stocks. If he is satisfied with a 5% yield and 3% DG to cover inflation, stocks like T and SO do that. And they can probably do it forever; cruise control.
T and SO type stocks are losing to to WAG and TGT type stocks after 10 years and the income from them explodes from there.
What I think is really interesting in a psychological sort of way is high yield for the retired guy seems a very logical/sensible/intuitive choice, but lower yield high DGR for younger guys, not so. I think because we are always drawn to higher current yield and want it.
All of this suggests that there is a Dividend Yield/Dividend Growth/Time curve we should be on.