12-21-2015, 07:21 AM
(12-20-2015, 06:41 AM)Caversham Wrote: Another lesson I learned after reading about people losing 25%+ of their income overnight is: portfolio position sizing. I only started DGI earlier this year, and so far I've been determining portfolio position size based upon the amount of capital invested in a company. In the future, I plan to base portfolio position size on the amount of income a company generates, and not the amount of capital invested.
Good point, Caversham.
I look at both but didn't have anything in my investment plan specific to income source diversification. When Encso (ESV) cut the dividend earlier in the year, the income stream in my wife's portfolio still went up over the year because of all the other players. However, she's still building the portfolio. If we were relying on every penny of that income stream in the distribution phase, it would have been a bigger concern.
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“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