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[EricL]

Any particular reason you are avoiding utility stocks?

[Be Here Now]

(11-23-2014, 10:37 PM)EricL Wrote: Any particular reason you are avoiding utility stocks?

Anemic dividend growers for the most part. I am willing to risk an ETN to get double their current yield.

[EricL]

(11-23-2014, 11:15 PM)Be Here Now Wrote:

(11-23-2014, 10:37 PM)EricL Wrote: Any particular reason you are avoiding utility stocks?

Anemic dividend growers for the most part. I am willing to risk an ETN to get double their current yield.

Gotcha.

[ChadR]

Is having HDLV the reason you are avoiding T?

[Be Here Now]

(11-24-2014, 03:16 PM)ChadR Wrote: Is having HDLV the reason you are avoiding T?

Yes, and VZ as well.

[ChadR]

OK. By not wanting to lose income from the portfolio, wouldn't you be better off having more positions instead of 15? Losing 1/15th of you income my be hard to handle. It's the reason that I have as many different positions as I do. Losing 2% of my income once I'm retired wouldn't cause me have to go back to work.

[Be Here Now]

(11-24-2014, 03:22 PM)ChadR Wrote: OK. By not wanting to lose income from the portfolio, wouldn't you be better off having more positions instead of 15? Losing 1/15th of you income my be hard to handle. It's the reason that I have as many different positions as I do. Losing 2% of my income once I'm retired wouldn't cause me have to go back to work.

It is a balancing act. Losing 1/15 of this portfolio's income would not be a hardship. Once it is invested its value will be less than half of my total stock investments, and my existing investments are yielding 7% combined.

I built this list to be my highest conviction high-ish yielders. There are lots of other names I could put in this account, i.e. MCD, BAX, LXP, PG, CL, JNJ, PEP, KO, LMT, but none of them have what for me is the right combination of high-ish yield and quality.

You might notice that there are a lot of equity REITs. I am trying to become a rent collector, i.e. a landlord, once removed. I think this is a good way to collect reliable income and not need to cash out part of my portfolio to meet living expenses. My use of leverage is part of the landlord theme.

[Be Here Now]

I am thinking about adding CVX to this list. If the current E&P selloff pushes the yield up to 4% I will be even more interested. In the mean time I have not actually bought any of these. Most valuations seem excessive.

[Be Here Now]

I made many changes to this portfolio and have now committed a majority of the funds. This is the actual portfolio:

Symbol : Yield : Portfolio Weight

CMO 10.50% 1.60%
CSG 6.44% 2.61%
CVX 4.07% 4.14%
DLR 5.16% 3.26%
DVYL 7.38% 2.28%
EMR 3.38% 4.97%
EPR 5.98% 2.81%
GIS 3.11% 5.41%
HCN 4.24% 3.97%
HCP 5.14% 3.27%
HDLV 8.01% 2.10%
HTA 4.12% 4.09%
HTGC 9.10% 1.85%
KMI 4.31% 3.90%
LTC 4.43% 3.80%
LXP 6.77% 2.49%
MAIN 6.80% 2.47%
MCD 3.55% 4.74%
MLPL 11.95% 1.41%
MO 4.06% 4.14%
O 4.38% 3.84%
OHI 5.21% 3.23%
PEP 2.74% 6.14%
PG 3.12% 5.39%
PM 5.18% 3.25%
STAG 5.73% 2.94%
T 5.67% 2.96%
VTR 4.32% 3.90%
WPC 5.53% 3.04%

This is a total of 29 positions. Each position contributes 3.45% of the total income. 3 of these are 2x leveraged ETNs: DVYL, HDLV, MLPL.

Equal income portfolio weighting gives a current yield of 4.88%. Each position contributes 0.17% of the yield. The weighted dividend growth rates are:

1 year: 5.43%
3 year: 7.33%
5 year: 6.40%

chowder number: 11.28

[hendi_alex]

Lots of exposure to REITs and other interest rate sensitives in front of a rising rate cycle. Lot of yield chasing. Hope that strategy doesn't bite you. Rising rate concerns have me at the mid range weighting for such positions. I'll increase the weighting after the first rate increase or two.

[Be Here Now]

(04-10-2015, 06:09 PM)hendi_alex Wrote: Hope that strategy doesn't bite you.

Me too!

The positions are yield producers. I am not looking for capital gains. My strategy with this portfolio is to collect rents, thus the many REITs. As a rent collector, I am not concerned with market noise. I am not very good at market timing or interest rate forecasting, so I look for what I consider to be fair- or under-valuation, then make a buy.

[hendi_alex]

To me the main problem/headwind lies in financing costs. As those costs increase, REITs will lose margin and cash flow. IMO that aspect is not noise. My approach will be to slowly accumulate over varios cycles. There is no compelling reason to go full pool during what is the most favorable part of the cycle, a time when yields are historically low on the strongest REITs.