I’m new to this site, and new to dividend growth investing. I really like the info and strategies posted here so I wanted to introduce myself and see if you all had any advice to help me get started. A little background on myself:
I started investing in March 2009 (lucky timing) when I was 24. I took my tax return of about $1000 and started playing (basically gambling). I guessed at stocks based on “tips” I read online and since that was basically the market bottom, everything I bought went up in value. For a while… The first time I got burned was when I bought etrade (ETFC) based on internet rumors of a buyout. My investment tanked and didn’t sell right away because I let myself get emotional about it. I didn’t want to take a loss so I held it and continued to watch it drop. I eventually sold it for a loss to offset my gains at tax time. That was/is the hardest lesson for me to learn. Don’t get emotional. If you’re wrong, admit it, and move on.
I experimented with day trading, then penny stocks, then swing trading. Day trading wasn’t for me because I’m sure if I divided my time invested by my profit I’d have made about $0.15 an hour… Penny stocks were great for a month. Then I wiped out most of my gains in about a week. I did like swing trading. My strategy was simple. I bought stocks that had dipped on bad news, waited a few days or weeks for it to rebound then sold it. I did that from 2010-2012 and more than doubled my portfolio (without adding much fresh capital).
In 2012 I took a new job that paid better, but I all but stopped monitoring my stocks because I was at work when the market was open and the job took up so much of my time. I kept 3 positions (WEN, SXL, & KMP) and pretty much left it alone. I originally bought these as swing trades, but ended up keeping them for the dividend (and since SXL and WEN pretty much went straight up from when I bought them). In August 2012 I took the rest of the cash out of my account, along with all my savings and bought a 2 family house. I spent the next 10 months fixing it up and sold it a year and a day after I bought it for $91K more than I paid for it. After deducting my expenses, taxes and fees I was left with almost $38K in profit.
I paid off my two cars, leaving me with no debt and began looking for another house to flip. Bargains were hard to find because of how crazy the housing market was here in Massachusetts, but I finally found a great deal and closed on the place in June. During the time I had signed the p&s, but was waiting for the closing I started paying attention to my Scottrade account again.
The big (expensive) projects on the house are mostly done. My savings is all but depleted, but the only big expense I have left is paying off the interest free credit card I put the appliances and kitchen cabinets on (currently has a $5000 balance I have to pay by December when my 0% interest ends). I’m currently adding $100 a week to my Scottrade account and will up that to $200/week after the credit card is paid off.
My hope is to pull equity out of this house to buy an income property, though I may have to flip this one too and then do one more house before I can swing a second. My long term goal is to own my main residence (or a least have a very small mortgage) and start building a portfolio of rental properties and flips. While I’m working toward that goal I’d like to build a dividend growth portfolio. And eventually use the income from stocks and rental properties to live off of and pursue my passions (cars, racing, and writing).
A few months ago I discovered the Dividend Mantra blog (which is what lead me here) and it opened my eyes. I’ve followed his lead by cutting my expenses as much as possible (as reasonably possible for me at least, I’m not as hard core as he is). He recently wrote an article about how life slows down when you have the financial freedom to do what you enjoy. That’s what I want. That is my main goal now. I really enjoy his blog because I feel he and I have a lot of similarities (we both work(ed) in the automotive industry (high stress, long hours), we both enjoy writing, and we both want financial independence).
Link to that post:
http://www.dividendmantra.com/2014/08/slow-down/
My new goal is to slow life down. I’m tired of the rat race and being stressed out about it. I’m only 29, but I started working 2 jobs at 14 (to get around the labor laws) and have been working full time since I was 18. I was able to work my way through college. It took five and a half years, but I have no student loans. And I was able to save up enough to put 5% down on my first house by 27. I currently work 45-55 hours a week at the day job, then work nights and weekends on my house or doing side work. I don’t necessarily have to “retire” early anymore, I just want to work because I want to, not because I have to, and do the things I enjoy.
So on to the portfolio. My strategy/goal is pretty simple:
I want to build a diversified portfolio of stocks that pay a dividend and will continue to grow that dividend.
I want the average yield to be 4%+ (preferably over 5%) so regardless of what the market does I should make a decent return. I’m only 29 so I’m willing to take some riskier investments to raise my overall yield, however I want to build a base of reliable long-term dividend payers.
Capital appreciation. I don’t mind riding out a dip in price as long as there’s a nice dividend coming my way, but I’m greedy! This is where I seem differ from a lot of dividend growth investors. Especially while I’m building my portfolio, I want my stocks to increase in value as well as pay me a dividend. When I’m invested in enough companies, then I will be less concerned about this as I will be able to average down on companies I still like, by adding to existing positions when their price drops.
Based on my current income and amount I’m able to save I’d like to put $1000 into each new position I add until I am comfortable with the level of diversification I have. Then I will consider adding to current holdings. By the end of the year I plan to save at least $1000 a month so I can buy at least one new position each month.
I like to buy good companies that are near their 52 week low with a promising outlook and an attractive entry yield.
I will sell a position if the dividend is cut or I believe there is a better investment to use that capital for.
Currently my portfolio looks like this (sorry the numbers line up so bad, I'm not sure how to post a spreadsheet):
Stock/shares cost current value yield on cost current yield weight
WEN 225 1008 1819.125 4.46 2.47 18.06
SXL 50 853.23 2421 8.56 3.02 24.04
KMP 12 906.6 1186.8 7.36 5.62 11.78
ARR 260 969.8 1092 16.09 14.29 10.84
RGR 20 996.4 1006 3.61 3.58 9.99
CASH 2546.46 25.28
TOTALS 4734.03 10071.385 8.02 5.78
I don’t like holding cash, but I don’t want to rush into an investment either. Part of me is worried about a broad market pullback. I’d like to be able to buy when that happens, but who knows when that will be. I’m always a little gunshy about buying and have missed several great opportunities because of it. This is something I need to work on and what I like about the dividend growth strategy. I don’t need to time the market as long as I’m getting a decent dividend from a good company. Valuation is important, but I can still reach my goals with consistent dividend payments and growth.
I recently read an article about reinvested dividends and timing the market. I can’t find it right now so my horrible summary of that article is 2 people invested in Coke (KO) in the early 90’s. Both reinvested dividends, but one held the stock, while the other sold at the top around 1999 I think, and bought back in at its low years later. The person who timed the market perfectly still made significantly less than the person who held it through the long price drop and continued to receive and reinvest the dividend. While I still don’t want to see a price drop in a stock I own, I feel better knowing that long term I’ll make out because of dividends!
That’s the long way of saying I want to keep buying stocks regardless of what the market is doing. The stocks at the top of my watch list are:
GE currently at $25.64 with a 3.43% yield. I’m looking to buy around $25
MCD currently at $93.79 with a 3.45% yield. I like MCD under $93
T currently at $34.74 with a 5.3% yield. I want in under $34.
TGT currently at $58.20 with a 3.57% yield. I like TGT and I think long term it will come back, but I think there may be a better buy opportunity before things turn around.
FSC currently $9.70 with a 11.34% yield. It’s risky, they have cut their dividend, and their payout ratio is not good, but it seems to trade in a pretty tight range and I think the high yield may be worth the risk as long as I keep a close eye on it. I almost bought in around $9.40 a while back, but missed out. I’m on the fence at its current price. I think I may buy if it dips into the $9.50’s.
PETS currently at $14.01 with a yield of 4.85%. I like PETS at $13.75
I’m thinking about selling $1000 worth of WEN to buy MCD. I’ve had a great run with WEN, but I like MCD better for the long term and it has a higher yield. If I take my original investment out of WEN, then emotionally I can look at it as free money from the profit I made on the stock. That also gets me into MCD and leaves my cash for other purchases.
I’d also like to sell ARR for a less risky REIT. I love the big monthly dividend, but that stock is testing my tolerance for risk.
That was a really long first post. I am really excited to join this forum and to start this dividend growth journey.
I started investing in March 2009 (lucky timing) when I was 24. I took my tax return of about $1000 and started playing (basically gambling). I guessed at stocks based on “tips” I read online and since that was basically the market bottom, everything I bought went up in value. For a while… The first time I got burned was when I bought etrade (ETFC) based on internet rumors of a buyout. My investment tanked and didn’t sell right away because I let myself get emotional about it. I didn’t want to take a loss so I held it and continued to watch it drop. I eventually sold it for a loss to offset my gains at tax time. That was/is the hardest lesson for me to learn. Don’t get emotional. If you’re wrong, admit it, and move on.
I experimented with day trading, then penny stocks, then swing trading. Day trading wasn’t for me because I’m sure if I divided my time invested by my profit I’d have made about $0.15 an hour… Penny stocks were great for a month. Then I wiped out most of my gains in about a week. I did like swing trading. My strategy was simple. I bought stocks that had dipped on bad news, waited a few days or weeks for it to rebound then sold it. I did that from 2010-2012 and more than doubled my portfolio (without adding much fresh capital).
In 2012 I took a new job that paid better, but I all but stopped monitoring my stocks because I was at work when the market was open and the job took up so much of my time. I kept 3 positions (WEN, SXL, & KMP) and pretty much left it alone. I originally bought these as swing trades, but ended up keeping them for the dividend (and since SXL and WEN pretty much went straight up from when I bought them). In August 2012 I took the rest of the cash out of my account, along with all my savings and bought a 2 family house. I spent the next 10 months fixing it up and sold it a year and a day after I bought it for $91K more than I paid for it. After deducting my expenses, taxes and fees I was left with almost $38K in profit.
I paid off my two cars, leaving me with no debt and began looking for another house to flip. Bargains were hard to find because of how crazy the housing market was here in Massachusetts, but I finally found a great deal and closed on the place in June. During the time I had signed the p&s, but was waiting for the closing I started paying attention to my Scottrade account again.
The big (expensive) projects on the house are mostly done. My savings is all but depleted, but the only big expense I have left is paying off the interest free credit card I put the appliances and kitchen cabinets on (currently has a $5000 balance I have to pay by December when my 0% interest ends). I’m currently adding $100 a week to my Scottrade account and will up that to $200/week after the credit card is paid off.
My hope is to pull equity out of this house to buy an income property, though I may have to flip this one too and then do one more house before I can swing a second. My long term goal is to own my main residence (or a least have a very small mortgage) and start building a portfolio of rental properties and flips. While I’m working toward that goal I’d like to build a dividend growth portfolio. And eventually use the income from stocks and rental properties to live off of and pursue my passions (cars, racing, and writing).
A few months ago I discovered the Dividend Mantra blog (which is what lead me here) and it opened my eyes. I’ve followed his lead by cutting my expenses as much as possible (as reasonably possible for me at least, I’m not as hard core as he is). He recently wrote an article about how life slows down when you have the financial freedom to do what you enjoy. That’s what I want. That is my main goal now. I really enjoy his blog because I feel he and I have a lot of similarities (we both work(ed) in the automotive industry (high stress, long hours), we both enjoy writing, and we both want financial independence).
Link to that post:
http://www.dividendmantra.com/2014/08/slow-down/
My new goal is to slow life down. I’m tired of the rat race and being stressed out about it. I’m only 29, but I started working 2 jobs at 14 (to get around the labor laws) and have been working full time since I was 18. I was able to work my way through college. It took five and a half years, but I have no student loans. And I was able to save up enough to put 5% down on my first house by 27. I currently work 45-55 hours a week at the day job, then work nights and weekends on my house or doing side work. I don’t necessarily have to “retire” early anymore, I just want to work because I want to, not because I have to, and do the things I enjoy.
So on to the portfolio. My strategy/goal is pretty simple:
I want to build a diversified portfolio of stocks that pay a dividend and will continue to grow that dividend.
I want the average yield to be 4%+ (preferably over 5%) so regardless of what the market does I should make a decent return. I’m only 29 so I’m willing to take some riskier investments to raise my overall yield, however I want to build a base of reliable long-term dividend payers.
Capital appreciation. I don’t mind riding out a dip in price as long as there’s a nice dividend coming my way, but I’m greedy! This is where I seem differ from a lot of dividend growth investors. Especially while I’m building my portfolio, I want my stocks to increase in value as well as pay me a dividend. When I’m invested in enough companies, then I will be less concerned about this as I will be able to average down on companies I still like, by adding to existing positions when their price drops.
Based on my current income and amount I’m able to save I’d like to put $1000 into each new position I add until I am comfortable with the level of diversification I have. Then I will consider adding to current holdings. By the end of the year I plan to save at least $1000 a month so I can buy at least one new position each month.
I like to buy good companies that are near their 52 week low with a promising outlook and an attractive entry yield.
I will sell a position if the dividend is cut or I believe there is a better investment to use that capital for.
Currently my portfolio looks like this (sorry the numbers line up so bad, I'm not sure how to post a spreadsheet):
Stock/shares cost current value yield on cost current yield weight
WEN 225 1008 1819.125 4.46 2.47 18.06
SXL 50 853.23 2421 8.56 3.02 24.04
KMP 12 906.6 1186.8 7.36 5.62 11.78
ARR 260 969.8 1092 16.09 14.29 10.84
RGR 20 996.4 1006 3.61 3.58 9.99
CASH 2546.46 25.28
TOTALS 4734.03 10071.385 8.02 5.78
I don’t like holding cash, but I don’t want to rush into an investment either. Part of me is worried about a broad market pullback. I’d like to be able to buy when that happens, but who knows when that will be. I’m always a little gunshy about buying and have missed several great opportunities because of it. This is something I need to work on and what I like about the dividend growth strategy. I don’t need to time the market as long as I’m getting a decent dividend from a good company. Valuation is important, but I can still reach my goals with consistent dividend payments and growth.
I recently read an article about reinvested dividends and timing the market. I can’t find it right now so my horrible summary of that article is 2 people invested in Coke (KO) in the early 90’s. Both reinvested dividends, but one held the stock, while the other sold at the top around 1999 I think, and bought back in at its low years later. The person who timed the market perfectly still made significantly less than the person who held it through the long price drop and continued to receive and reinvest the dividend. While I still don’t want to see a price drop in a stock I own, I feel better knowing that long term I’ll make out because of dividends!
That’s the long way of saying I want to keep buying stocks regardless of what the market is doing. The stocks at the top of my watch list are:
GE currently at $25.64 with a 3.43% yield. I’m looking to buy around $25
MCD currently at $93.79 with a 3.45% yield. I like MCD under $93
T currently at $34.74 with a 5.3% yield. I want in under $34.
TGT currently at $58.20 with a 3.57% yield. I like TGT and I think long term it will come back, but I think there may be a better buy opportunity before things turn around.
FSC currently $9.70 with a 11.34% yield. It’s risky, they have cut their dividend, and their payout ratio is not good, but it seems to trade in a pretty tight range and I think the high yield may be worth the risk as long as I keep a close eye on it. I almost bought in around $9.40 a while back, but missed out. I’m on the fence at its current price. I think I may buy if it dips into the $9.50’s.
PETS currently at $14.01 with a yield of 4.85%. I like PETS at $13.75
I’m thinking about selling $1000 worth of WEN to buy MCD. I’ve had a great run with WEN, but I like MCD better for the long term and it has a higher yield. If I take my original investment out of WEN, then emotionally I can look at it as free money from the profit I made on the stock. That also gets me into MCD and leaves my cash for other purchases.
I’d also like to sell ARR for a less risky REIT. I love the big monthly dividend, but that stock is testing my tolerance for risk.
That was a really long first post. I am really excited to join this forum and to start this dividend growth journey.