10-01-2016, 04:24 PM
Hi
When investing in DGI we should not consider the market value of a stock, we should only consider the dividends and the fact that they are increasing. Agree?
Assuming you are, here is my question:
Let's say I invested 1,000$ and expect to receive 600$ in 5 years (this is an example). After 1 year, the market value of the stock has gone up by 60% so the stock's value is now 1,600$ (+ dividends you got on its way up).
My initial thought would be to grab the profit. 60% in one year? That's great.... but wait a minute, we are not here for the market value, we are here for the dividends. OK, so let's look at it in a different way. I expected to receive 600$ in dividends in 5 years. Instead, I got this amount after 1 year! why won't I use it? so even when I look from dividends point of view, this means "sell"!
Here are my options:
1) Do nothing, I'm here for the dividends and nothing more.
2) Sell everything! I made a good guess, the stock went up for a reason, who knows what will happen next.
3) Sell only the remainder of my initial investment, in this case 600$ and continue with my DGI plan with the 1,000$ left in the stock.
In points 2 and 3 above, I will use the money I got to purchase other DGI stocks.
What do you think?
When investing in DGI we should not consider the market value of a stock, we should only consider the dividends and the fact that they are increasing. Agree?
Assuming you are, here is my question:
Let's say I invested 1,000$ and expect to receive 600$ in 5 years (this is an example). After 1 year, the market value of the stock has gone up by 60% so the stock's value is now 1,600$ (+ dividends you got on its way up).
My initial thought would be to grab the profit. 60% in one year? That's great.... but wait a minute, we are not here for the market value, we are here for the dividends. OK, so let's look at it in a different way. I expected to receive 600$ in dividends in 5 years. Instead, I got this amount after 1 year! why won't I use it? so even when I look from dividends point of view, this means "sell"!
Here are my options:
1) Do nothing, I'm here for the dividends and nothing more.
2) Sell everything! I made a good guess, the stock went up for a reason, who knows what will happen next.
3) Sell only the remainder of my initial investment, in this case 600$ and continue with my DGI plan with the 1,000$ left in the stock.
In points 2 and 3 above, I will use the money I got to purchase other DGI stocks.
What do you think?