09-24-2013, 10:12 AM
Remember for YOC I'm including all additional purchases and re-invested dividends in the same stock, not just the initial cost. That's why I call it Yield on Investment.
If you sold there would be commissions as well as taxes on gains. When you buy again there will be a commission and only the hope that the new buy will provide the same growth and ROI after taxes and fees.
Ask any businessman how they evaluate earnings. It's the return on their investment.
As mentioned above, if your yield on investment is high, why would you want to sell, especially if the company keeps increasing the dividend and making your YOC even higher. You'd be increasing your income without having to do any work, just sit back and let it grow.
If all your future investments did the same thing, you'll retire happy with hardly any effort.
If you sold there would be commissions as well as taxes on gains. When you buy again there will be a commission and only the hope that the new buy will provide the same growth and ROI after taxes and fees.
Ask any businessman how they evaluate earnings. It's the return on their investment.
(09-24-2013, 09:58 AM)ChadR Wrote: Placing too much weight on YOC would cause me to never sell my oldest holdings because the % is too high.
As mentioned above, if your yield on investment is high, why would you want to sell, especially if the company keeps increasing the dividend and making your YOC even higher. You'd be increasing your income without having to do any work, just sit back and let it grow.
If all your future investments did the same thing, you'll retire happy with hardly any effort.