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DGI For The DIY
You just made it lol. Don't go to any trouble calculating it but where would you have been if you moved nothing and just sucked on the Div cuts? 7-8%? I know I would have done something very similar to you had I set that goal.
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Thinking about making a big change to my approach with the portfolio and was wondering your thoughts.

I've automatically reinvested dividends back into companies that paid them since starting the portfolio in 2013. However, when I did that there were monthly cash contributions coming into the account and there was an $8.95 commission per trade. When my company was acquired in 2017, cash contributions to the IRA stopped, but I've continued with the dividend reinvestment.

In the past few years, the only way to rebalance or buy new stocks is to sell or trim other positions. This has caused me to sell a few winners to free up capital, only to see them continue higher. I've made some good moves as well, but it seems lately everything I've trimmed has done better than what I bought with the proceeds.

With zero commissions, I can pool dividends and use them to add to underweight or new positions at zero cost. This will take away adding to all stocks over time through reinvestment, but also frees me up to be fairly active with trades and will help keep me from selling off existing positions.

I think most of the hesitation comes from making a change after seven years and having to come up with a new way to report results. No longer reinvesting back into the company that pays it muddles up the total return picture and tracking the real results for each position. It will have a negative impact on returns for some stocks because I will no longer be adding to them but probably fits my personality better because it will let me make monthly buys on what I want.

Thoughts?
My website: DGI For The DIY
Also on: Facebook - Twitter - Seeking Alpha
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Go for it. I was only reinvest the dividends into the payers when I was paying commissions. Once it went to $0 commissions, I turned them all off. You'll still be tracking whether or not you get the 10% growth for the overall portfolio. While individual stocks most likely won't hit the 10% per year, the overall portfolio should still hit it. And now you won't have to trim positions just because you find a new stock that you want to add.
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No matter what you do, use DEC 31 as a closeout point for the rule change and future tracking. I would definitely pool my dividends. The justification for DRP is now in the past. I stopped dripping quite some time ago. You have decent income now and it be fun to pick where to put the next share.

Don't beat yourself up for rimming your winners. You are viewing it through bull market glasses. What if you had trimmed a stock like BA just before they started crashing jets, or tech stocks before a hard tech correction?. I would stick to my general rules. Div cutters no longer fit the criteria. You could trim slow growers too but that cuts back on some growthier stocks and the CAP appreciation you've benefitted more from than income growth.

Just have fun, whatever you decide. Build something that won't get crushed in a protracted stagnant economy.
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(01-29-2021, 07:07 PM)fenders53 Wrote: No matter what you do, use DEC 31 as a closeout point for the rule change and future tracking. I would definitely pool my dividends. The justification for DRP is now in the past. I stopped dripping quite some time ago. You have decent income now and it be fun to pick where to put the next share.

Don't beat yourself up for rimming your winners. You are viewing it through bull market glasses. What if you had trimmed a stock like BA just before they started crashing jets, or tech stocks before a hard tech correction?. I would stick to my general rules. Div cutters no longer fit the criteria. You could trim slow growers too but that cuts back on some growthier stocks and the CAP appreciation you've benefitted more from than income growth.

Just have fun, whatever you decide. Build something that won't get crushed in a protracted stagnant economy.

I'm thinking I will let my last two dividends for January reinvest, and then make the switch on Monday. I can then modify the spreadsheet so that going forward I will have another column after my price returns for dividends paid, which can then be used to calculate total return for each position.

From this point forward I plan to hold all the current positions in the portfolio, and then make monthly or bi-monthly adds to bring some of smaller positions up in size, and also to perhaps add some names like APD, AMT, NKE, SHW, TSCO, MED, LHX, etc. that I've watched or own in other accounts but haven't been able to add here.

While I still strongly believe the DRIP is a good way to build long-term wealth, I prefer to be more active and this allows me to do that while also leaving my existing positions alone to grow. No more trimming to rebalance, just let them grow where they may. I've sold off what's turned out to be 36 shares of AAPL and 8 shares of MSFT in the spirit of rebalancing, and that's turned out to be a mistake.
My website: DGI For The DIY
Also on: Facebook - Twitter - Seeking Alpha
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(01-30-2021, 11:46 AM)EricL Wrote:
(01-29-2021, 07:07 PM)fenders53 Wrote: No matter what you do, use DEC 31 as a closeout point for the rule change and future tracking.  I would definitely pool my dividends. The justification for DRP is now in the past.  I stopped dripping quite some time ago.  You have decent income now and it be fun to pick where to put the next share.  

Don't beat yourself up for rimming your winners.  You are viewing it through bull market glasses.  What if you had trimmed a stock like BA just before they started crashing jets, or tech stocks before a hard tech correction?.  I would stick to my general rules.  Div cutters no longer fit the criteria.  You could trim slow growers too but that cuts back on some growthier stocks and the CAP appreciation you've benefitted more from than income growth.    

Just have fun, whatever you decide.  Build something that won't get crushed in a protracted stagnant economy.

I'm thinking I will let my last two dividends for January reinvest, and then make the switch on Monday. I can then modify the spreadsheet so that going forward I will have another column after my price returns for dividends paid, which can then be used to calculate total return for each position.

From this point forward I plan to hold all the current positions in the portfolio, and then make monthly or bi-monthly adds to bring some of smaller positions up in size, and also to perhaps add some names like APD, AMT, NKE, SHW, TSCO, MED, LHX, etc. that I've watched or own in other accounts but haven't been able to add here.

While I still strongly believe the DRIP is a good way to build long-term wealth, I prefer to be more active and this allows me to do that while also leaving my existing positions alone to grow. No more trimming to rebalance, just let them grow where they may. I've sold off what's turned out to be 36 shares of AAPL and 8 shares of MSFT in the spirit of rebalancing, and that's turned out to be a mistake.
In the spirit of debating things for no other reason other than our entertainment....  if the market got hit and AAPL or MSFT had pulled back 25% more than whatever you flipped into, would you then be prescient today?  Not really IMO.  We all look in the rearview mirror but don't dwell on it.  I know you are a long term guy but today you seem to be dwelling on 2020, about the craziest year ever.  You are going to DRP into something, so I see no advantage to auto dripping.  You hold a lot of positions for the size of this port.  Most every year there may be one that is heading down a wrong path.  Holding is generally good, and never selling is not good.  You are talented enough at this to direct where the new purchase lands, and you will be right often enough to make a meaningful difference in return over the next 10 years.  Auto-investing in mediocre made sense when commissions were in play.  I'd rather buy a full share of a great stock that dipped this month because the sector happens to be out of favor.  

And active is fun.  It does fit your personality and desire to research new opportunities..
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I too am just realizing the freedom of $0 commission.  I like your idea of turning off the dividend reinvestment and deciding for yourself where to allocate the funds.  What I've been doing is buying 1 share of any stock I'm interested in.  I think it's better than a Watch list to have an actual connection to the stock at hand.  Then when I'm in a position to add more income to the portfolio, I can choose to bring one of those 1 share assets up to a real investment or not.
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I do that as well. It does cause me to pay close attention. It's difficult for me to add to a stock that launches after initial purchase but owning a few shares of a company that runs 20% in a few months surely isn't the worst problem an investor will experience. I recently started a new growth port and that happened immediately. If you own enough stocks like Eric does, there will almost always be a few flailing and he has the skills to identify one worthy of another share. With mechanical DRP you knowingly buying high. It looks ok enough during a protracted bull run. It's a game of inches and adding that share with a better entry yield matters if you do it often.
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Here's my end of year update for the portfolio on Seeking Alpha.

DGI For The DIY: 2020 Dividend Portfolio Review

Enjoy!
My website: DGI For The DIY
Also on: Facebook - Twitter - Seeking Alpha
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I just skimmed it and I'll give it a close read later, but looks really interesting so far. I especially like how you've plotted out the plan through 2044, when dividend income reaches $26k (which would be amazing!). Gotta figure $26k dividends + say $24k social security + say $25k drawn from retirement accounts = $75k which is hopefully enough to retire with depending on lifestyle. Congrats on reaching your goal amount in each of the first 4 years!

Also it's great that you have the entire portfolio posted so I can study it.
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