2022 planning

[fenders53]

SOFI program sounds good.

One of my attractions to WEC is their charging station projects. XOM is going to drag their feet and end up acquiring firms that know what they are doing. They have the resources to catch up with the new oil boom. It could be challenging to pay the huge dividend, oil exploration and EV build out. They want EV to go away but it's wishful thinking at this point. They don't impress me anymore. They will be right back in trouble if the oil rally isn't long.

[bankerboy]

I agree with Fenders, good market run left for a bit but in about 6 months the “go away in May” might be a real 2022 strategy!


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[fenders53]

(11-22-2021, 02:05 PM)bankerboy Wrote: I agree with Fenders, good market run left for a bit but in about 6 months the “go away in May” might be a real 2022 strategy!


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Hard to tell when the music stops.  TINA is stronger than I thought.  A lot of the frequent forum posters have run to cash repeatedly and they are back in a month with no reward for their fear.  I've been too cashy the whole year.  I'll be pleasantly surprised if we make it until May.  I expect the market will hand out free haircuts to those who won't trim their MOMO by early 2022.  Doesn't mean the market is crashing soon though.  We'll see what the market does with interest rates when the FED stops helping.  Powell now has more freedom to do what he should have last summer.  No idea if he actually will.

[bankerboy]

Anyone wanna share their top 20 holdings and what will pop in 2022? Going to be a much slower growth year but financials and energy will do in IMO.


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[fenders53]

(12-09-2021, 05:21 PM)bankerboy Wrote: Anyone wanna share their top 20 holdings and what will pop in 2022? Going to be a much slower growth year but financials and energy will do in IMO.


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RayRay has a top ten holdings thread he always jump starts first of the year that gets good participation, but you can sure start a similar thread anytime you like.  My plan is to not have 20 tickers that qualify as large holdings by then.  We'll see.  

[Scooterd]

I have already made my portfolio adjustments for the next few years (overweights for those that tend to perform historically better / underweights for those that tend to lag) in a mid cycle phase of the business economic cycle. Given the mid cycle phase is typically the longest phase (roughly three-and-a-half years on average) of the full business economic cycle - moving into 2022 I will be concentrating on just increasing share count for those individual portfolio investments that provide miss-priced opportunities periodically throughout the upcoming year when the market permits.

[cemanuel]

My 2022 Planning is really a two-parter, maybe 2.5. Some of it isn't dividend-specific but I'll toss it all in and you folks can let me know if I'm out of bounds.

The big change is retirement. End of the year is when I don't work any longer but I have two months' vacation time which has me receiving full paychecks through February and a smaller on in March. It also gives me the earned income for a $7k Roth contribution. Right now I plan to toss in $500/mo starting in January - I have until 4/15/23. But I could put in more if there's a nice dip.

In my taxable account it will be figuring out how to manage things to fund my not working any more. I manage dividends by quarter and right now am thinking of doing quarterly transfers from my investment to my local bank account. Trims of AAPL and GOOGL to make up my dividend shortfall (about 20% short) will be offset by cash. I have a while to decide - which stock has more room to run? Though one share of Alphabet per quarter would be well over 50% of what I need. If the market pulls back I can use cash. The only other decision is what to do with T though obviously I could make a move in another company if conditions warrant.

I'm managing both the Roth and IRA - once I roll it over - as Total Return Accounts. I expect that most companies I buy will still pay a dividend but more will be low-yielding. I have at least MO to sell from the Roth, target price $50. Not sure on BMY. I like it better than the market.

The IRA is interesting. It's in MFs right now. Once I do the rollover (can start after February 19, full will have to wait until April) my plan is for about 20% to be in funds, mostly index ETFs. I am keeping one Fidelity Fund, maybe two. At least FSMEX. I like medical devices/tech as an investment sector but I have decided the fund can do a better job. I also have FOCPX, a high growth fund that has done very well. Other than those two it will be the usual suspects - SPY, IVV, QQQ, ATVI. The rest will be in stocks. If after about 3 years the funds are outperforming my stocks I should go to all funds and save time. The reverse is also true. I have been able to beat the S&P - by a little, not spectacularly - since I started. If I'm worth a darn I should be able to do better selecting companies for total return. Unless I suck at picking those.

I am contemplating making a list next March - a "20 best companies to own" list. I would put about $10k into each of these, regardless of price, to get me started and build positions in size based on price going forward. I'm not sure I'll do it - I have always used target prices with dividend-payers. But I may.

I shouldn't need to touch the IRAs until the IRS makes me; 13 years. I tell everyone this is my chance to invest like a young person. Quality is always important but I think the longer a person will be in the market, the less important purchase price is. I'll be more active trading in these accounts than in my Taxable but never expect to be what anyone would call a trader. I could also look at options. I used to do those trading grain all the time. Been a while and it's different with stocks. If nothing else, there's no physical product.

At some point Roth conversions are a possibility and there is likely to be a point where I start thinking of giving. But not my first year.

And not investing but at some point not long after retiring I'll re-do my will. I have one but it's 20 years old.

[ken-do-nim]

There's an argument to be made that trimming growth stocks will net a higher retirement return than living off of dividends, but psychologically I find it hard to sell beloved stocks myself, never mind on a down day. I still have over 10 years, but I've always assumed that when I retire, everything in my portfolio that doesn't yield at least 1.5% will go bye-bye in one big sell-off and get converted to dividend payers. I expect I will aim for a yield around 5%. That said, I'm in a learning process about what's a value stock, and what's a value trap stock. I think I've gotten into and out of AT&T 3-4 times in the past 2 years, and at this point I don't see myself going back. I'd much rather put my money into say RQI even though it is less well known, though admittedly an event like the 2007-2008 financial crisis scares me.

[fenders53]

Plans are great but we had a saying in the Army........... Semper Gumby, (always be flexible). Life doesn't follow our rules sometimes.

Unless you have an enormous amount of resources, at some point the market throws a curve. A backup plan is good, and an inflexible decision is not required today. Stressing about it won't enhance your retirement years. My retirement is somewhat unique in the modern day. My pensions are generous but there will be a two year bridge before I get SSA. I intend to pay myself quarterly and an extra draw at tax time. Target drawdown will be 4% annually. If the market has a crazy good year perhaps 6%. Never less than 3% if I actually need the income.


Here is my order of hierarchy to draw income from my IRA port.

1. My conservative option income strategy yields about $4K+ a month when the market is sideways or up trending. $2K is doable in a rough market. It would be best if I cease this completely for months in the event of a true crash. I am going to plan on it for 2 quarter draws per year. 3+ has been more accurate the past few years. It could be good for all my income some years. No way to know.4

2. Dividend income. I will count on it for 1 to 1 1/2 quarter draws per year. It falls way short of totaling sustaining my income needs. Too much of my money selling options because the yield is 2-3 times more than a good dividend stock.

3. Cash bucket. I have a couple of years of cash if stock Armageddon comes. I'd prefer to leave it alone but the world won't end if I raid it for $5K now and then.

4. Selling shares. Nobody wants to do that but the truth is if you are heavy into growth stocks that run hard then replenish the cash bucket. I won't forget to nibble some shares back if the market gets whacked, and at some point it surely will.

5. If the above starts to fail for years, then I guess I work a part-time job a few months a year and adjust the budget for the next year. Wouldn't wreck my life. I know how to retire again. I don't see that as a recurring problem but we never know for sure.

I am very comfortable with the above plan because it is flexible. Worst case I could ditch the option selling scheme and just go DGI and accept far less monthly income. It would be less complicated, but after literally thousands of trades, I've put in my time and I'm not giving up on that easily.

[cemanuel]

(12-10-2021, 03:24 PM)ken-do-nim Wrote: There's an argument to be made that trimming growth stocks will net a higher retirement return than living off of dividends, but psychologically I find it hard to sell beloved stocks myself, never mind on a down day.   I still have over 10 years, but I've always assumed that when I retire, everything in my portfolio that doesn't yield at least 1.5% will go bye-bye in one big sell-off and get converted to dividend payers.  I expect I will aim for a yield around 5%.  That said, I'm in a learning process about what's a value stock, and what's a value trap stock.  I think I've gotten into and out of AT&T 3-4 times in the past 2 years, and at this point I don't see myself going back.  I'd much rather put my money into say RQI even though it is less well known, though admittedly an event like the 2007-2008 financial crisis scares me.

Keep in mind I haven't done it yet - over two months before I can even start. I could revert back to how I've been doing things all along. One item I forgot to mention is wanting to have all of the 403b invested within 3-6 months after the rollover but I am concerned if there's a sector trading weak during that period and I buy too much in it. I got pretty heavy in pharma and HC in early 2019 when it was trading so cheap. Not enough to be a major issue; I think 28% at its peak. But I didn't have the type of capital I'm tossing in all at once with the rollover. OTOH, as it's a tax-advantaged account maybe that doesn't matter and I can rotate out over time. But I'm still going to watch for it. FYI, I don't do much sector investing with, say, a target of X% in this or that. But I do pay attention and don't want to get overly out of whack.

Then again, there was a guy on SA. His username was OnlyApple (I think) and he said he lived true to the handle. Hard to tell him he was wrong. But I could never do that.

[rnsmth]

I am going to need to reconsider my goals for 2022. The initial goal was a 10% increase in dividend/distribution growth over 2021's.

We have had some really nice dividend increases for next year already - TD, CM, WEC, ENB, O, TU and now NIE.

We are getting a special dividend from EOG that will be paid in 2021.

We are getting a special dividend from NIE that will be paid in January.

With no further dividend increases (and there will be a bunch) and with no dividend reinvestments (and there will be a bunch) our dividend/distribution income projection for 2022 is already 8.2% higher than our 2021 income.

That projection comes from the SSD forward 12 month estimate, and has added to it the special dividend from NIE.

Holy cow boys and girls, holy cow.

[rnsmth]

Plans for 2022.

I have been thinking for some time about how to translate my objective of increasing my mid-yield, average to fast dividend growth positions into concrete action going forward.

2021 has been the year of SCHD for us. That is now our second largest position, and it is certainly a mid-yield, fast dividend growth position. I would not mind adding to it, but I have three other positions that I have decided I want to build some in 2022: D, LMT and EOG.

D and LMT feel like old friends, I have owned them before and I own them again. EOG is new. All three are mid-yield, average to fast dividend growers, all three are underweight, and all three are in the undervalued to fair value range. My thinking now is that I will focus on building those three with our accumulated dividends in 2022.

Things could change, but that is what I am thinking now. Those could be good places to put some of our fat dividends from higher yield positions (actually, from all our other positions).