Help the old guy start a DGI portfolio

[NilesMike]

I would not wait if you like T. The last time the yield was this high was 2010

[fenders53]

That is probably very good advice. I won't be pleased if it slips away. A partial position now could be added too later if it does drop another dollar or so as I expect it may.

[NilesMike]

(09-08-2018, 09:51 PM)NilesMike Wrote: I would not wait if you like T. The last time the yield was this high was 2010

...and poof it's $3 higher.

[fenders53]

I missed T several times with limit day orders.  I was trying to buy it under $32.  I'll blame my brokerage companies for taking a month to transfer my accounts.  We'll see if I get another chance or not.  It is especially volatile around option expiration which is pretty much every Friday.

[fenders53]

I am going to add a modest position in F Ford today. I am certain it's going to be a bumpy ride and not for the faint of heart, but I think the free fall is close to over barring market calamity. I have followed them forever. It's almost certainly a yield trap right now as the DIV is likely to be slashed some next year, but should still remain above average. For those that aren't aware, F pays large special and unexpected dividends when times are good. Insiders paying themselves back for holding? I don't know of course but it happened more than once. Anyway, I don't recommend F to others now but they haven't failed me yet if I buy when the factory is on fire. They had the good sense to self correct prior to the automaker bailout 10 years ago. I don't see F going away. An American icon company. I truly hope the GOV doesn't have to help the industry again but I'm confident they will if necessary.

[EricL]

Not a fan at all of Ford as a stock. It's had flat earnings for 20 years, and no growth prospects in sight. It also has several dividend cuts in its history, making the 7.8% yield pretty questionable. If the company is struggling this much to grow in a good economy, what do you think will happen when we hit the next recession?

[fenders53]

F is speculative for sure. Any automaker is currently risky. GM is sucking wind too. The whole industry is so cyclical and you have to be a fool to not trim positions during good times. TESLA trades at about $300. Do they even have a PE? Ford made more actual profit selling the Model A 90 years ago. I'm just playing Eric. I'll share my F basis and we'll talk about this in two years. F dividend will almost surely be cut in 2019. I'll probably chicken out and just sell puts now to lower my basis even further. I keep my speculative plays at less than 3% total portfolio. As I said I am NOT suggesting anyone follow in my path. But I will be sure to brag if it works out. Fair enough?

[EricL]

(09-13-2018, 12:15 PM)fenders53 Wrote: F is speculative for sure. Any automaker is currently risky.  GM is sucking wind too.  The whole industry is so cyclical and you have to be a fool to not trim positions during good times.  TESLA trades at about $300.  Do they even have a PE?  Ford made more actual profit selling the Model A 90 years ago.    I'm just playing Eric.  I'll share my F basis and we'll talk about this in two years.  F dividend will almost surely be cut in 2019.  I'll probably chicken out and just sell puts now to lower my basis even further.  I keep my speculative plays at less than 3% total portfolio.  As I said I am NOT suggesting anyone follow in my path.  But I will be sure to brag if it works out.  Fair enough?  

Not going to fault anyone for making a spec play or two. Best of luck with the buy, we'll check back in on this in 2020!

[fenders53]

It will be interesting to watch. My only spec play at the moment and confined to about 1% of total port value. Win or lose it won't matter so much in the big picture. I'll learn something along the way and that may be my only gain. We'll see.

[cannew]

(09-13-2018, 02:56 PM)fenders53 Wrote: It will be interesting to watch.  My only spec play at the moment and confined to about 1% of total port value.  Win or lose it won't matter so much in the big picture.  I'll learn something along the way and that may be my only gain.  We'll see.

1. At 56 you have many years left especially as you have pensions you can collect at 62.  By 65 you'll also get SS.
2. You thought process seems off.  Yes, you might want to get out of the growth stocks and into DG stocks, but I would never add FI holdings
3. Having a cash reserve is fine but you don't need a large one.
4. "that might be my only gain", again you don't seem to understand how DG works.  You might not get the big gain as you might if you happened to own a great growth stock, but with DG stocks which pay and grow their dividend will see price gains in line with that growth over time.
5. When we were 65 we started consolidating our holdings till we finally had a concentrated portfolio of only 12 stocks that we felt were quality DG stocks
6. We are mid 70's, I'm 76 and we are 100% DG equities.  We have no pensions, other than CPP (your SS), no bonds, ETF's, Preferreds and REIT's.
7. We monitor our Income Growth each year and are up 9.13% for this year.  It's our income that matters.

[fenders53]

(09-08-2018, 09:51 PM)NilesMike Wrote: I would not wait if you like T. The last time the yield was this high was 2010

(09-15-2018, 10:12 AM)cannew Wrote:

(09-13-2018, 02:56 PM)fenders53 Wrote: It will be interesting to watch.  My only spec play at the moment and confined to about 1% of total port value.  Win or lose it won't matter so much in the big picture.  I'll learn something along the way and that may be my only gain.  We'll see.

1. At 56 you have many years left especially as you have pensions you can collect at 62.  By 65 you'll also get SS.
2. You thought process seems off.  Yes, you might want to get out of the growth stocks and into DG stocks, but I would never add FI holdings
3. Having a cash reserve is fine but you don't need a large one.
4. "that might be my only gain", again you don't seem to understand how DG works.  You might not get the big gain as you might if you happened to own a great growth stock, but with DG stocks which pay and grow their dividend will see price gains in line with that growth over time.
5. When we were 65 we started consolidating our holdings till we finally had a concentrated portfolio of only 12 stocks that we felt were quality DG stocks
6. We are mid 70's, I'm 76 and we are 100% DG equities.  We have no pensions, other than CPP (your SS), no bonds, ETF's, Preferreds and REIT's.
7. We monitor our Income Growth each year and are up 9.13% for this year.  It's our income that matters.

I appreciate the dissenting view, and welcome your further opinion.  I am in an odd situation since it took a month to transfer my assets and now I am in 90%+ cash.  I was 90% equities for 35 years and now I am a little gun shy to dive back in.  I missed the AUG run due to slow transfer.  90% equities is just  dangerous 5 years out from retirement, and late in a bull market run.  But I got by with it. I don't need all my money in six years but I certainly desire some of it.  I've never been so conservative but this seems like a good time to be patient.  Tariff games are coming IMO.  I don't believe China is gong to back down until it hurts both countries.  We'll know soon.   

I'm with you on no bonds.   This seems like such a a foolish time to dive in with Fed interest rate increases all but certain.  I'd be fortunate if I get MM rates playing bonds anytime soon.  

I now have some index funds and ETFs again, but nothing serious.  Hoping for a dip to re-enter but I will average in while I wait.  

I do desire a 12 stock individual DGI stock port soon.   Selling puts almost daily but so far I am not long much of anything.  The premiums slowly erode on 90% of my put positions.  Put premiums far exceed dividends, and the "collateral money" for a covered put collects 2% money market as I wait to be assigned.  I'm inclined to continue this strategy with the downside being a 10% annual  return (that's very conservative), if I am never assigned a stock.  I've had worse years for sure.  Someday soon the market will dip and I will be long a bunch of stocks with great dividends.  I think that is how this ends and I will be surprised if my wait is long.