06-02-2018, 08:53 AM
(This post was last modified: 06-02-2018, 10:45 AM by cannew.
Edit Reason: added some info
)
Like everything else, look before you leap. Having said that, IMO DG Investing is one of the simplest and safest ways to invest for your future.
What are your goals or objectives? Are you looking to get immediate returns or are you planning for the future? Have you other income sources? What is your timeframe? Have or are you investing in 401k's?
Simply, I like to tell people you are investing to generate a growing income for the future. One can do this by selecting a group of solid\large companies with a long history of paying and growing their dividend. I'd say paying dividends for at least 20 years and growing their dividend consistently (say12 of the last 15 years), or growing their dividend by at least 75% over a 10 yr period. and not having cut their dividend in the past 10 years.
How may companies depends and in the US you have several hundred to choose from, but I'd think 20-30 should be sufficient. One does not need to buy all immediately. Start by complying a list of stocks which meet your criteria. Select companies in different sector, but avoid cyclical stocks. One does not need to own every sector or every company. Avoid companies who's dividend yield is higher than the average of other companies in the same sector, in other words don't chase yield. I prefer companies with yields between 2.5% to 4.5% with div growth of 5% to 8%. Some low yield companies, 1% or above may have higher growth, say 10%, which in the long term may provide better Total Return. Again it depends upon your needs and timeframe.
The last point is to avoid trading, rebalancing or worrying about asset allocation. Try to buy or add to the stocks of your choice when prices drop or meet your own criteria. Again the idea is to hold for the growing income.
Good Luck
ps: We have been retired for many years and only own 12 company stocks in all our accounts. We have no company pension and our dividend income more than exceeds our annual expenses. We hold no ETF's, Funds, Bonds, Preferred's or CD's. I'm not suggesting this is ideal or what others should do, it's what suits us and has met our needs.
As we no longer buy or sell we only record the dividends received and the increases. Even when we were accumulating, we only watched the stocks on our list and added when we could, buying one's which met our criteria. Yes we did buy some because they paid a higher yield, but later regretted straying from our core stocks. DG investing is not a Daily, Weekly or even monthly activity. One basically looks for the time to buy, not sell.
What are your goals or objectives? Are you looking to get immediate returns or are you planning for the future? Have you other income sources? What is your timeframe? Have or are you investing in 401k's?
Simply, I like to tell people you are investing to generate a growing income for the future. One can do this by selecting a group of solid\large companies with a long history of paying and growing their dividend. I'd say paying dividends for at least 20 years and growing their dividend consistently (say12 of the last 15 years), or growing their dividend by at least 75% over a 10 yr period. and not having cut their dividend in the past 10 years.
How may companies depends and in the US you have several hundred to choose from, but I'd think 20-30 should be sufficient. One does not need to buy all immediately. Start by complying a list of stocks which meet your criteria. Select companies in different sector, but avoid cyclical stocks. One does not need to own every sector or every company. Avoid companies who's dividend yield is higher than the average of other companies in the same sector, in other words don't chase yield. I prefer companies with yields between 2.5% to 4.5% with div growth of 5% to 8%. Some low yield companies, 1% or above may have higher growth, say 10%, which in the long term may provide better Total Return. Again it depends upon your needs and timeframe.
The last point is to avoid trading, rebalancing or worrying about asset allocation. Try to buy or add to the stocks of your choice when prices drop or meet your own criteria. Again the idea is to hold for the growing income.
Good Luck
ps: We have been retired for many years and only own 12 company stocks in all our accounts. We have no company pension and our dividend income more than exceeds our annual expenses. We hold no ETF's, Funds, Bonds, Preferred's or CD's. I'm not suggesting this is ideal or what others should do, it's what suits us and has met our needs.
As we no longer buy or sell we only record the dividends received and the increases. Even when we were accumulating, we only watched the stocks on our list and added when we could, buying one's which met our criteria. Yes we did buy some because they paid a higher yield, but later regretted straying from our core stocks. DG investing is not a Daily, Weekly or even monthly activity. One basically looks for the time to buy, not sell.