lucas03 dividend portfolio

[lucas03]

Bought 16 shares of M and 5 shares of XOM today, both already in my portfolio and just decreasing cost basis. Maybe UPS in a week if it continues to go down.

Seeing my portfolio go down from 18% XIRR (for the past 4 years) to 10% in a few days is pretty scary. But this is what I have been waiting for, seeing how my portfolio recovers after a recession.

[lucas03]

I just bought BA, XOM and SKT in the past few days. I also added a limit order for F, also to lower my cost average.

I feel like I should plan how much money I invest and when. Because right now I did buys in a few days which I usually have in the budget for 1 month. Probably brainstorming and coming up with numbers how much I wanna spend in optimistic/nominal/pesimistic scenario for the following 6-12 months.

All my transactions - https://www.digrin.com/portfolio/24-dgi/transactions/

[fenders53]

(03-14-2020, 06:13 AM)lucas03 Wrote: I just bought BA, XOM and SKT in the past few days. I also added a limit order for F, also to lower my cost average.

I feel like I should plan how much money I invest and when. Because right now I did buys in a few days which I usually have in the budget for 1 month. Probably brainstorming and coming up with numbers how much I wanna spend in optimistic/nominal/pesimistic scenario for the following 6-12 months.

All my transactions - https://www.digrin.com/portfolio/24-dgi/transactions/

A little extra investing these next few months could pay off.  This bear market might only last a few months  Typically they average a little over a year  There is nothing typical about our current economic or market situation.  If you are open to advice, down and scared markets are when you should consider buying quality.  I'll caution you not to always chase yield  These are the troubling times when a stressed company is most likely to cut their dividend.  Stocks like SKT and F will still be there when the economy levels out.  You have some blue chips in your port that are also on discount.  Those are the stocks to treat like core positions and buy more shares of them.  

It ls OK to have some low quality speculative stocks in your portfolio, but don't make them your larger positions because they are the most likely to turn into a big anchor on your portfolio for years.  I'm not saying they can't fix their businesses and rise again eventually, but you have better options among your holdings.  Those stocks could be to new highs by the end of the year, and it's highly likely they are by 2021 IMO.

[lucas03]

Thank you for your comment, it really got me thinking I should spend more time reading through balance sheets and business models my companies have. Your comment got me a little bit demotivated, that I am buying shitty stocks and don't know how to change that.

I actually was averaging down on these positions, some of which already suspended dividends.

I also added two features recently to digrin.com, first one I was playing around for some time. It compares my portfolio to SP500 and any stocks/ETF. I need to add more tests here, as it seems like sp500 is beating portfolios too often


And what I think is more useful now (corona), are dividend cuts. I created a list of dividend cuts (though I update it manually, so I will probably miss some dividend cuts, hopefully, users will let me know).

It took expected dividends in dividend calendar in my portfolio from $1326.42 to $1271.33 .
And what I plan to do soon are dividend decreases. That I should be able to automate, making dividend calendar pretty precise in expected dividends

[fenders53]

I really did not mean to demotivate. Trust me I have purchased lot's of low quality stocks and every sharp downturn brings our errors to light. I just don't want you to build on them when you have better options. I learned most of my lasting lessons by enduring gut wrenching down turns. Keep your head up, and buy quality for now. This works out in the end.

You throw up a few ideas and I promise some of us here will sure try to help. We have some balance sheet gurus here. If it makes you feel any better I've been at this a long time and I had a fairly large position in DAL. They had a very good balance sheet, and now they don't. It happens when the economy is suddenly shut down like never before.

Choose good companies with decent dividend yields and it works out in the end as long as you are diversified.

[EricL]

Not to toss more kindling into the fire, but I'd be concerned about CTL too. It's got a junk BB credit rating and has already cut the dividend twice in the last decade. It wouldn't surprise me at all if they cut again in the future. Considering it's your highest dividend payer, that might be something to consider.

At your age just stick to companies with BBB+ or higher credit ratings in non-cyclical industries and you'll do just fine in the long run. Don't be enamored by high yields. You don't need the income now, and they generally offer lower growth and more risk than other stocks.

Focus on the GROWTH in DGI rather than yield. It's not a get-rich-quick method of investing, it takes years for the snowball to grow.

Don't get discouraged though! Now is the time to take some lumps and learn from the school of hard knocks. It's much better to make the mistakes now with a small portfolio so when you have a big one at retirement you know what you are doing by then. =)

[fenders53]

(04-29-2020, 03:11 PM)EricL Wrote: Not to toss more kindling into the fire, but I'd be concerned about CTL too. It's got a junk BB credit rating and has already cut the dividend twice in the last decade. It wouldn't surprise me at all if they cut again in the future. Considering it's your highest dividend payer, that might be something to consider.

At your age just stick to companies with BBB+ or higher credit ratings in non-cyclical industries and you'll do just fine in the long run. Don't be enamored by high yields. You don't need the income now, and they generally offer lower growth and more risk than other stocks.

Focus on the GROWTH in DGI rather than yield. It's not a get-rich-quick method of investing, it takes years for the snowball to grow.

Don't get discouraged though! Now is the time to take some lumps and learn from the school of hard knocks. It's much better to make the mistakes now with a small portfolio so when you have a big one at retirement you know what you are doing by then. =)

I couldn't agree more.  I was a little older than you but I had nobody to help me and the internet was very new.  No kidding I incinerated  over $20K.  Back then that would have bought a new car and a good fishing trip.  My wage was about $10/HR to put that in perspective.  It was a big deal to me and I didn't realize for years it was my own lack of knowledge that caused it.  That was a real bad experience that should have made me quit but it didn't.  I keep my mistakes small now that my port is large.

If I could make a suggestion you need a half dozen core anchor stocks that won't go out of business, and most likely will not only maintain the dividend, but increase it every year.  That might require you to sell some of your current holdings to finance the switch.  There is nothing wrong with holding a few speculative stocks, as long as you know the difference and are OK with the risk of that part of your portfolio.  

"Invest in what you are knowledgeable about or interests you" is a great place to start a portfolio.  You tell Eric and I what interests you and we can help you pick some of your stocks to match your passions.  Computers, aviation, medicine, finance, recreation, whatever it may be....  I bet we can find some companies that will survive and pay you dividends for years.  With the market still down some, 3-4% dividends can be had with safety.  Don't chase the much higher Divs other than a small part of your port you know is speculative.  It's OK to lose a little money on those plays.  It's actually good at your age.  The experience will save you a helluva lot of money 10 years from now when your port is large. 

This game isn't easy.  If it was Eric and I would never make a mistake after all these years.  I know I still make bad decisions, but I won't let a few bad calls wreck my entire portfolio.  It's easily avoidable with a bit of experience.

[lucas03]

Quote:Invest in what you are knowledgeable about or interests you" is a great place to start a portfolio.  You tell Eric and I what interests you and we can help you pick some of your stocks to match your passions.  Computers, aviation, medicine, finance, recreation, whatever it may be....

Sounds good, where do we start?

I didn't wanna focus on one area, as I assume I should be diversified across more sectors. Also I've heard some are cyclic, so I assume if I have more, I always can buy some companies in some sectors if they are down in particular season.

I work in IT, so that would be my area to focus on.

And recently I was thinking of buying a bank. I was looking into JPM and BAC, but they look very similar to me.

[fenders53]

(06-30-2020, 03:46 PM)lucas03 Wrote:

Quote:Invest in what you are knowledgeable about or interests you" is a great place to start a portfolio.  You tell Eric and I what interests you and we can help you pick some of your stocks to match your passions.  Computers, aviation, medicine, finance, recreation, whatever it may be....

Sounds good, where do we start?

I didn't wanna focus on one area, as I assume I should be diversified across more sectors. Also I've heard some are cyclic, so I assume if I have more, I always can buy some companies in some sectors if they are down in particular season.

I work in IT, so that would be my area to focus on.

And recently I was thinking of buying a bank. I was looking into JPM and BAC, but they look very similar to me.

I'm sure a few here will help you but step one is not disappearing for months or we are wasting out time.  I;ll drop a few bullets and wait for your followup. 

Do stay diversified.  I'm not a techie but others here have some insight.  You shuld own a tech stock because that is your expertise.  I would study a few tech stocks hard, and hope for a dip.  Or buy one share of a rock steady blue chip like MSFT soon.  Someday you may get a chance to add some cheaper shares.  CSCO seems to be safe enough tech that isn't overvalued and has a solid Div.  CSCO is not going to run to the sky though.  

I don't recall your current port but you might throw it up and we can suggest a few to dump and re-allocate.    

A bank is not a terrible idea.  Div cuts are very possible if interest rates remain ultra-low, and that is likely.  Definitely stick with quality.  JPM and BAC are quality.  The low share price for BAC might work best for you now.

Go easy on the spec stocks right now.  Many of them are likely to get smoked some month soon and that is a motivation killer for a newish investor.  A little spec is OK if you have a rational thesis why they survive a tough economy.

[rayray]

Another thing, other then what fenders said, would be make sure you have a solid plan that you're sure you can stick with for the long term. Flip flopping game plans, and or panicking and selling at the wrong times can be devastating for years.

If you're looking for banks check out the top 5 or 6 Canadian banks, they've been hit pretty good but have been solid dividend payers for decades. I own the top 5 (TD/RY/CM/BNS/BMO) recently added to TD and BNS


I also like BAM under 30, not a bank but a really interesting company

[lucas03]

Quote:I'm sure a few here will help you but step one is not disappearing for months or we are wasting out time.

sorry, wanted omre time to think about your replies + a bit more work in these corona times. Should be better in the future

Quote:I don't recall your current port but you might throw it up and we can suggest a few to dump and re-allocate.  

It's in first post, this is my DGI portfolio. Comparing that to SP500 index, I think my last buys were bad -> by buying index I would be better off. my plan was to only buy stocks.  My strategy is to buy stocks monthly for 20 years and then live off it. Buy selling, it comes with extra effort like including it to taxes -> I was thinking I would focus on buying now and start selling in the future, as I get more experience/knowledge.

Quote:Many of them are likely to get smoked some month soon and that is a motivation killer for a newish investor

As my first buy was in Dec 2015, when I was still in school, and I am buying stocks monthly since then, hopefully motivation/quiting is not a risk for me

Quote:If you're looking for banks check out the top 5 or 6 Canadian banks

I have some BNS, usually I try to dollar cost average when dip is significant. e.g.

[fenders53]

It's been over two months. I'm not that patient lol. I was going to wait until September to reply buy here goes lol. Just teasing and I had confused your port with another member's that is very spec filled. I like at least 80% of your port just fine for the long term. You only have a few dogs I would lose. You probably know which ones?

I think your tech idea is fine. It's what you know and will stay abreast of. I'd find a couple you like very long-term and add a couple shares. Nothing tech that is obviously high quality is anything remotely like cheap. You'll get your chance to add more shares later. BNS is fine as well IMO. It's my opinion banks will struggle for the foreseeable future but things can change in a few quarters. No signs of 2020 settling down soon.