My "value" portfolio

[ken-do-nim]

Good morning all,

Well we've talked a lot recently about my growth strategy with the triple-leveraged funds, but today I'd like to showcase the polar opposite of those in my portfolio, the value stocks.  These are all the stocks/funds with 5%+ dividends, and any growth I get out of them is a bonus.  The last column shows their modest price increases recently. Surprisingly, NLY is the only one slightly down on the year.  Horizon Technology Finance Corp in particular is growing nicely for a dividend payer (when I first started buying it, it was over 8%).



I might only keep these for a year or two while my monthly budget is tight.  But as long as they are not eroding either in price or dividend payout, I like the flexibility they give me.  If my budget needs it, I pull the cash out of the account.  If it doesn't, I can take the pooled dividends and invest in something pure growth or dividend growth.

[fenders53]

There are times when a majority of our forum posts would give the impression we are a bunch of day and swing traders, but to my knowledge most of us still hold a significant income side to our portfolio. Some of those yields are sky high, but as you said you can watch them. I wouldn't be at all surprised if the price fades on some of them eventually, but it is usually gradual enough to allow for a calm exit. When the overall market gets slammed I tend to pick a few of this type fund. You can usually grab some super yields and get some price appreciation that often evades them for years. I am now out of mine after about a year, but that exit may well have been early.

[ken-do-nim]

And I just added Brookfield Real Assets Income Closed Fund (RA) to the family; yield 11.17% and year-to-date growth from $17.74 to $21.37.

[stockguru]

(04-07-2021, 07:36 AM)ken-do-nim Wrote: Good morning all,

Well we've talked a lot recently about my growth strategy with the triple-leveraged funds, but today I'd like to showcase the polar opposite of those in my portfolio, the value stocks.  These are all the stocks/funds with 5%+ dividends, and any growth I get out of them is a bonus.  The last column shows their modest price increases recently.  Surprisingly, NLY is the only one slightly down on the year.  Horizon Technology Finance Corp in particular is growing nicely for a dividend payer (when I first started buying it, it was over 8%).



I might only keep these for a year or two while my monthly budget is tight.  But as long as they are not eroding either in price or dividend payout, I like the flexibility they give me.  If my budget needs it, I pull the cash out of the account.  If it doesn't, I can take the pooled dividends and invest in something pure growth or dividend growth.

Too many of the same type of stocks. All these monthly dividend names have run up and your buying near or at the top. My question is why buy 7-8 of the same like stocks. Might be be better to buy 3 and limit your risk.  I own PCI that $16.10. T, RIO, PCI, NLY ok. The rest maybe buy an O, STAG, LTC ?? These companies have a good history. 

I own MAIN and that one has run up way to much as well. In fact all these monthly dividend stocks have all run way too far 

What happens if all these correct back to their normal trading levels? Then you stuck and would have to collect the dividend for 3 years just to break even 

Anyway just something to keep in mind. I hope they all go up another 20% for you

[fenders53]

(04-07-2021, 03:04 PM)stockguru Wrote:

(04-07-2021, 07:36 AM)ken-do-nim Wrote: Good morning all,

Well we've talked a lot recently about my growth strategy with the triple-leveraged funds, but today I'd like to showcase the polar opposite of those in my portfolio, the value stocks.  These are all the stocks/funds with 5%+ dividends, and any growth I get out of them is a bonus.  The last column shows their modest price increases recently.  Surprisingly, NLY is the only one slightly down on the year.  Horizon Technology Finance Corp in particular is growing nicely for a dividend payer (when I first started buying it, it was over 8%).



I might only keep these for a year or two while my monthly budget is tight.  But as long as they are not eroding either in price or dividend payout, I like the flexibility they give me.  If my budget needs it, I pull the cash out of the account.  If it doesn't, I can take the pooled dividends and invest in something pure growth or dividend growth.

Too many of the same type of stocks. All these monthly dividend names have run up and your buying near or at the top. My question is why buy 7-8 of the same like stocks. Might be be better to buy 3 and limit your risk.  I own PCI that $16.10. T, RIO, PCI, NLY ok. The rest maybe buy an O, STAG, LTC ?? These companies have a good history. 

I own MAIN and that one has run up way to much as well. In fact all these monthly dividend stocks have all run way too far 

What happens if all these correct back to their normal trading levels? Then you stuck and would have to collect the dividend for 3 years just to break even 

Anyway just something to keep in mind. I hope they all go up another 20% for you

I'm not sure why Ken even wants to keep taking theses beatings lol.  I'd cut the list in half just because it would be easier to keep an eye on them, but diversification from a single fund blowing up has some merit.  Mostly they melt down together when it hits the fan though.  There are indeed a lot of high quality funds that yield big if you catch them on a reasonable dip.  I grab RQI and ARCC every time they get hit because I know they are very well run and will work through the minefield.  20% + return with dividends and see ya til next time.  I see zero need to buy anything but proven performers.  Some are just better at not crossing the line in search of yield.  The extra 3% yield is meanigless because you a will give it back in a year or so.  Sadly they out perform my boring DGI stocks over the years but I don't own them half the time so I guess that makes the risk similar.  You can buy the very best high yielders and ride out the dips but I don't choose to.

He put astericks on "value".  It's not value, just high yield. It's a completely separate category but Ken knows that.

[ken-do-nim]

I don't mind the beatings, lol. There's a method to my madness. I do have experience with these products. I had 25K+ in NLY for a while, and I enjoyed it while it traded in a nice band from $10-$12. When it dipped into the 9s, I sold it.

For now I like the diversification. Part of this is a learning exercise for me. And these products all have very different chart histories.

ORC - King of the roost yield-wise, also the one I trust the least. It's basically been going down since Feb 2017 when it was at $12, now it's at $6.
OXLC - Prior to the "blip" (been watching too much Marvel TV), it stayed right around $10. Now it's in the mid 6s and still climbing.
RA - It used to trade around $22, now back almost to that. With a yield over 11%, if it just stays around where it is, that's fine.
NLY - I'm hoping it climbs back to $10
PCI - A steady climber before the blip, I'm hoping it keeps climbing now.
PFL - It has managed to climb back to $12 where it used to trade at. So yes, it may not go any higher, but the yield is almost 9% so it's fine
HRZN - If you look at the 10 year chart, it kind of makes a bowl. It has been on the rise for a while now.
HTGC - Yeah, it's definitely buying at the top. Hoping it can stay there. This one historically has reached this high then started down. Gulp.
T - I'm hoping with HBO Max now it can finally start climbing.
RIO - An actual DGI stock with almost a 6% div? Seems too good to be true. The 5 year chart looks great; going to Max shows it got killed in the 2008 drop.

Now let's look at your suggestions.
O - The max chart is wonderful; the 5 year chart looks choppy. The 1 year chart shows it trading in a narrow band, which it just rose above. 4.33% div so it's not in the same class as the others so far.
STAG - Interesting. At its 5 year high. Lots of hills & valleys in that chart. 4.20% dividend so again, not in the same class.
LTC - Another riser looking to get back to what it traded at before the blip. 5.24% dividend so it's interesting.

I don't see any of these as any better than say PCI, whose dividend blows them out of the water.

RQI - Looks a lot like LTC but with a slightly better dividend
ARCC - 8.38%, now that's my kind of stock

Time will tell! I doubt I'll stay in any of these for more than 2 years. Once my monthly budget is under control with a few more years of raises under my belt, I'll probably move these funds into growth equities. But I do like the idea that I can take a portion of my portfolio and dedicate it to providing me supplemental income whenever I choose; makes me feel like I set my own salary.

[fenders53]

You will have time to pick your favorites for the future. With RQI and ARCC I like to keep a small position and jump in hard on a real dip. That doesn't happen unless the market is getting killed and management doesn't set themselves up to go down with the ship so I am not fearful.

And I guess I do see some merit to holding a few too many now. At retirement time you need large positions to make real income and you have time to cull the list to the highest quality.

[ken-do-nim]

(04-07-2021, 10:29 PM)fenders53 Wrote: You will have time to pick your favorites for the future.  With RQI and ARCC I like to keep a small position and jump in hard on a real dip.  That doesn't happen unless the  market is getting killed and management doesn't set themselves up to go down with the ship so I am not fearful.

And I guess I do see some merit to holding a few too many now.  At retirement time you need large positions to make real  income and you have time to cull the list to the highest quality.

Yeah it's kind of like a "retirement preview".  It will be very interesting to see which ones turn out to stay so great.  I've been through both NLY and ORC reduced in price and lowering the dividend to match the new price.  

Anyway, thanks to that part of my portfolio, my overall yield is hovering at around 2% in the taxable account, which is about where I want it.

[fenders53]

A look back to 2020 is helpful. Mercifully brief but a sharp 30% market pull back complete with a serious bond market scare. The high yielders get beat up if they are pushing their luck on leverage, offering credit to high risk clients etc. The well managed ones with a solid history bounce back. As Guru pointed out it's not fun waiting years to get your capital back in dividends.

[ken-do-nim]

I made a promise to update this post, so here we go!

Here are my current 7%+ payers...

Monthly payers
QYLD (11.36%) - Relatively new to the portfolio, he's been a model citizen so far. Dividend varies between .187 and .233 per share
OXLC (11.25%) - Half a year in, I'm very happy with him. Dividend constant at 0.0675 since June 2020.
RYLD (11.19%) - Also new, and doing fine. Dividend varies between .227 and .251
RA (10.70%) - The most stable one on this list. Dividend at .199 per share for at least the last 3 years (all the page I'm on shows)
NUSI (7.43%) - Also new, and I like that the dividend is trending upwards. Each of the last 3 months was higher than before.
JEPI (7.41%) - Another uneven payer, dividend varies between .257 and .374, which is quite a lot.
HRZN (7.07%) - Steady payer at 0.10 since 2016. Also has some moderate price growth

1/4/7/10 month payers
IVR (11.76%) - Very new, and I'm watching to see what it does. Dividend has increased from 0.02 to 0.05 to 0.08 to 0.09 twice in the last 5 quarters since the covid meltdown.
FSK (11.27%) - Very new, and I'm hopeful it will be a star. Dividend recently raised from 0.60 to 0.65, and the 6/16/2020 dividend raised from 0.19 to 0.60. It could be going places!
CIM (8.81%) - Also very new, and the dividend recently raised from 0.30 to 0.33.

2/5/8/11 month payers
HTGC (7.64%) - My star! Dividend has gone from 0.32 to 0.34 to 0.37 to 0.39 twice in the last 5 quarters.

3/6/9/12 month payers
ARCC (8.11%) - Another rock like RA, the dividend was recently raised to 0.41 from 0.40.

[fenders53]

Dumped 66% of the original list from five months ago? Sell any of them without a capital loss that wiped out most or all of the income?

Anyway this is how we learn. It's good you track performance.

[ken-do-nim]

(09-09-2021, 01:05 PM)fenders53 Wrote: Dumped 66% of the original list from five months ago?  Sell any of them without a capital loss that wiped out most or all of the income?

Anyway this is how we learn.  It's good you track performance.

Oh absolutely; it was 'cast a wide net' and see what sticks.  A few like PCI and PFL today were very small losses; I sold them because they had become superfluous and the money was better moved into DGI.  At least that's the hope lol.