10-14-2015, 09:52 PM
(This post was last modified: 10-14-2015, 10:09 PM by Dividend Watcher.)
OldTimer, nice list you have there.
I don't necessarily see a problem with GE. I recently swapped out GE for an EMR/ETN combo. You can see my reasoning here about midway down the page. Since then GE has sped up shedding some financial products & businesses it held. See here and here for further developments, tidbits and starters. One thing GE has in its pocket is all the data it has collected over the years. I used to be amazed at how their engineers could balance a turbine rotor bigger than my house with the most rudimentary of equipment. This rotor used to operate above 4 critical speeds which meant the shaft got quite twisted when up to operating speed. For more information, see this document. This article talks about the IoT collection of this data but GE has tons of it on file already. If they can perform, this is worth a ton of business.
KMI & CMI are cyclical just like the oils and to a lesser extent industrials but, with that diversification, it shouldn't be too much of a hassle unless you need every last penny of the income this portfolio spits out. CMI has a pretty low payout ratio and Mr. Kinder has been pretty shrewd managing his empire.
Are you planning to buy all at once or are you purchasing in stages? I suspect we'll have some more volatility like we've experienced the last couple months at least until the end of the year so you may be able to boost your yield a tad when you find some weakness.
I was a little surprised by only 1 utility, ED, in the list. Not that you have to load up on utes.
As to BNS. I own it and think its global diversification is a plus in its favor. However you not only have the USD/CAD exchange rate to deal with but also the CAD and South American currencies it has major stakes in. Despite that they've kept up the dividend increases. I also hold some RY and BMO in our portfolios and looking to add TD to the wife's portfolio once I have the cash to designate to it. Our own Roadmap2Retire had a series about Canadian banks on SeekingAlpha. He could point you to them.
The only caution I have is that the price and dividend amount will vary with the exchange rate. I'm way underwater on BNS and BMO because I bought them when the dollar and loonie were close to par. Now we are back to the average long-term exchange rate again so I expect them to fluctuate up and down from here. Over a decade, everything will average out so I'm not too worried about it. Since they manage to either freeze the dividend when times are tough or keep increasing 1x to 2x per year, the dividends I receive haven't taken as much of a hit as one would think. I just keep reinvesting the dividend to lower my average cost and boost the YOC.
Here's a graph of the exchange rate for the last 25 years:
Hope you get in at decent prices and have a long and healthy retirement. I'm not that far behind you.
I don't necessarily see a problem with GE. I recently swapped out GE for an EMR/ETN combo. You can see my reasoning here about midway down the page. Since then GE has sped up shedding some financial products & businesses it held. See here and here for further developments, tidbits and starters. One thing GE has in its pocket is all the data it has collected over the years. I used to be amazed at how their engineers could balance a turbine rotor bigger than my house with the most rudimentary of equipment. This rotor used to operate above 4 critical speeds which meant the shaft got quite twisted when up to operating speed. For more information, see this document. This article talks about the IoT collection of this data but GE has tons of it on file already. If they can perform, this is worth a ton of business.
KMI & CMI are cyclical just like the oils and to a lesser extent industrials but, with that diversification, it shouldn't be too much of a hassle unless you need every last penny of the income this portfolio spits out. CMI has a pretty low payout ratio and Mr. Kinder has been pretty shrewd managing his empire.
Are you planning to buy all at once or are you purchasing in stages? I suspect we'll have some more volatility like we've experienced the last couple months at least until the end of the year so you may be able to boost your yield a tad when you find some weakness.
I was a little surprised by only 1 utility, ED, in the list. Not that you have to load up on utes.
As to BNS. I own it and think its global diversification is a plus in its favor. However you not only have the USD/CAD exchange rate to deal with but also the CAD and South American currencies it has major stakes in. Despite that they've kept up the dividend increases. I also hold some RY and BMO in our portfolios and looking to add TD to the wife's portfolio once I have the cash to designate to it. Our own Roadmap2Retire had a series about Canadian banks on SeekingAlpha. He could point you to them.
The only caution I have is that the price and dividend amount will vary with the exchange rate. I'm way underwater on BNS and BMO because I bought them when the dollar and loonie were close to par. Now we are back to the average long-term exchange rate again so I expect them to fluctuate up and down from here. Over a decade, everything will average out so I'm not too worried about it. Since they manage to either freeze the dividend when times are tough or keep increasing 1x to 2x per year, the dividends I receive haven't taken as much of a hit as one would think. I just keep reinvesting the dividend to lower my average cost and boost the YOC.
Here's a graph of the exchange rate for the last 25 years:
Hope you get in at decent prices and have a long and healthy retirement. I'm not that far behind you.
=====
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan