DGI For The DIY

[fenders53]

Nice work Eric. Your adjustments seem very rational. I thought it would be tougher to hit your 10% goal this year but you got it done. Glad to hear you and the wife recovered from Covid. My daughter contracted it and it was pretty rough for about five days. Still hoping to avoid it myself.

[EricL]

Took me about 6 days to feel better, and my wife is finally feeling better after about two weeks.

Fortunately our kids never had anything but mild symptoms, we're hopeful it stays that way.

Definitely not a fun thing to go through, but we were fortunate to not have any complications.

[ken-do-nim]

Hi Eric, glad your family is recovering.

I'm just catching up on your DGI blog, and I'm a bit surprised your dividend portfolio doesn't have any of the high dividend producing REITs like NLY or ORC. Have you ever thought about adding them?

[fenders53]

(10-18-2020, 07:49 AM)ken-do-nim Wrote: Hi Eric, glad your family is recovering.

I'm just catching up on your DGI blog, and I'm a bit surprised your dividend portfolio doesn't have any of the high dividend producing REITs like NLY or ORC.  Have you ever thought about adding them?

Eric will answer for himself of course, but high current dividend yield vs long-term dividend growth are different strategies/goals.  You can't leave out his long term cap gains that will likely be VERY substantial over 30 years.  Some of them already are.

Anyway this port is fun to watch.  10% annual increase is no small achievement.  I've been a little skeptical of it long term, but the good news if he misses by half he is still doing fine.

[EricL]

(10-18-2020, 07:49 AM)ken-do-nim Wrote: Hi Eric, glad your family is recovering.

I'm just catching up on your DGI blog, and I'm a bit surprised your dividend portfolio doesn't have any of the high dividend producing REITs like NLY or ORC.  Have you ever thought about adding them?

Sorry I didn't respond earlier, just noticed your post.

I don't invest in REITs like NLY or ORC because neither are dividend growth stocks. They both produce income, but do so at the expense of capital appreciation, and both have paid declining dividends over their histories.

NLY is paying roughly the same dividend it did in 2005, and ORC is paying less than half of what it did in 2014.

Look at the long-term charts for both of them. You are losing money despite getting paid a double-digit dividend yield.

   

   

I invest in companies with the intention of holding for decades, so I want to buy companies that are growing both earnings and dividend payouts to me. I focus more on the growth of the dividend than the current dividend.

[EricL]

The final two October payouts hit the account yesterday, and I ended October with 20.4% income growth over 2019's monthly total.

   

[EricL]

The latest issue of Dividend Growth Digest documents my 20% dividend growth in October, shares a pic from my recent hunting trip, and gives my thoughts on recent dividend increases from CMI, V, and ABBV.

Enjoy!

[fenders53]

Congrats on exceeding your goal. I'm sure it wasn't the original plan to be forced to flip stocks around in this port, but things happen and flexibility seems to be paying off.

[EricL]

My quarterly portfolio update was posted on Seeking Alpha this morning.

DGI For The DIY: Q3 Dividend Portfolio Update

Enjoy!

[fenders53]

Enjoy the updates as always. As I have mentioned many times I thought 2020 would be extra challenging to hit your income growth goal, but you made it and I'm pleased you did. 2021 isn't likely to be easy either based on the number of holding projected to grow dividends at a low rate. You know that of course. As negative as that probably sounded, I enjoy watching you pursue the goal. I think goal setting is VERY important and I always set them for my ports. I won some and I lost some, but goal setting made my portfolios successful over the decades, even if the goal was adjusted at some point. I am not suggesting you throw in the towel. Not at all. If this port grew income at only half your goal for a few years it wouldn't be a failure.

[EricL]

Thanks for the words of encouragement Fenders. I had my doubts at times whether I'd make it, but a strong December should push me over the top.

It can be discouraging at times when you see the tech sector go up 10% a week while some of the dividend stocks seem to tread water. But the market goes in cycles, so I suspect at some point that will shift back the other way again. Keep reminding myself that long-term S&P returns are only 6.1% over the last 20 years, so double-digit gains aren't anything to be ashamed of for long-term investing.

[fenders53]

(12-21-2020, 03:47 PM)EricL Wrote: Thanks for the words of encouragement Fenders. I had my doubts at times whether I'd make it, but a strong December should push me over the top.

It can be discouraging at times when you see the tech sector go up 10% a week while some of the dividend stocks seem to tread water. But the market goes in cycles, so I suspect at some point that will shift back the other way again. Keep reminding myself that long-term S&P returns are only 6.1% over the last 20 years, so double-digit gains aren't anything to be ashamed of for long-term investing.

Trends will come and go as far as capital appreciation is concerned.  The longterm 10% income growth part will be the trick.  The only way I know of to ensure that over time is fast growth companies that pay a lowish div.  Whether that is a good idea or not will vary over time but mostly I think it's not a bad path to pursue.  You own good companies and  the total return will work out well enough in the end.  You have a good mix that includes high div stocks that can't possible hold up their end of the income growth deal.  But they already pay a yield on cost Div other stocks will take a decade or more to to approach.  My port is a mix like this.