Research & monitoring: where do you find the time?

[Robert_NL]

I'm working on my dividend growth portfolio for three years now and in those years I moved from being a student to working a full-time job (40 hours a week). I now wonder where people find the time to do proper research, read blogs and news and monitor their positions (in the portfolio)? I'm having trouble with doing proper research and monitoring my positions in the evening hours. I (can) spent about 1 hour per day on my dividend investing journey and I feel this is way to little.

I currently have 17 positions to monitor and I know some have over 30 positions to check, but where do these people get the time from to monitor them AND do research on new companies? How do you monitor your positions? I subscribed for e-mail alerts on my positions on seeking alpha to get earnings figures and important announcements and I try to read the management discussion in the annual report once a year, is this enough?

I seriously wonder how people with over 30 positions do this

[earthtodan]

Hi Robert,
It sounds like you have pretty good time management skills simply because you can say how many hours per day you spend on DGI research. For me, I have no idea. I've spent far too much time learning about it over the last year as sort of a ramp-up period, and it distracted me quite a bit from my job. Now things are heating up at work and I'll probably be working more than 40 hours for the rest of the year; however, I'm ramping down into a "maintenance period" where I can put DGI research on a trickle. Here are my tips for that:

- At least half the articles on Seeking Alpha are from authors who are not worth your time. They are easy to recognize because they are prolific, and the content is thinly researched and formulaic. Learn to ignore them.

- Identify blue chips that truly make you SWAN and turn off notifications for them if you use the SA app, plus those that generate new articles every hour. For example I consider most news flashes related to JNJ and GE to be ignorable, they aren't going to change my opinion on these companies. Also consider not paying attention to the earnings numbers from these companies.

- When researching new companies, use Finviz.com as your quick screener, and learn which numbers to look for in their big matrix. Use dividata.com for graphs of dividend history. I've filtered out new ideas in less than 1 minute using these tools.

Personally I must have close to a hundred tickers on my watch list, but I've learned to filter out most of the noise.

Dan

[cannew]

Robert:

Since you are just beginning your DG portfolio (three years is not a lot of time), I'd suggest you concentrate on about 10 to 12 solid dividend growth companies. Selecting those should be fairly easy and you may already hold many of them. I'd much rather hold 12 great stocks than add 20 or more so-so stocks just to diversify into various sectors.

Once you've got a sizable position in the 10 or 12 and have more time, experience and money, then you may wish to expand your list. You won't go wrong by just buying great DG stocks, adding to them and holding.

As Dan says don't get caught up in what the so-called experts have to say.

[Kerim]

Great advice in this thread so far. I'd just add to be patient with all of it, Robert. Many of us are in a similar boat. Between my job and family, I'm surprised I find time for it at all. But it is truly cumulative, so as your knowledge and experience base grows, it gets easier and easier to just add incrementally. Eventually, you'll get comfortable enough with the tracking and monitoring system that you settle on that it will not be burdensome.

I monitor about 30 stocks at the moment. Each one takes quite a bit of time to get launched, but once that work is done, updating it every now and again isn't that hard or time-consuming. And of course some I monitor much more frequently / closely than others. I've got all the JNJ I'm going to have for a good long time (except for reinvestment). So I spend very little time on it.

All that said, I'm sure that I've missed some good opportunities because I haven't had the time to spend researching or developing a strategy. But, such is life.

I've said several times that if I didn't have the responsibilities of a family or job, I might be a pure value investor instead of a dividend growth guy. But I think DG is a forgiving strategy that doesn't require nearly the effort or knowledge that some other strategies do.

Anyway, hang in there and take it a bit at a time. With an hour a day, you can manage more than you'd think.

[Robert_NL]

(07-06-2014, 12:26 PM)earthtodan Wrote: Hi Robert,
It sounds like you have pretty good time management skills simply because you can say how many hours per day you spend on DGI research. For me, I have no idea. I've spent far too much time learning about it over the last year as sort of a ramp-up period, and it distracted me quite a bit from my job. Now things are heating up at work and I'll probably be working more than 40 hours for the rest of the year; however, I'm ramping down into a "maintenance period" where I can put DGI research on a trickle. Here are my tips for that:

- At least half the articles on Seeking Alpha are from authors who are not worth your time. They are easy to recognize because they are prolific, and the content is thinly researched and formulaic. Learn to ignore them.

- Identify blue chips that truly make you SWAN and turn off notifications for them if you use the SA app, plus those that generate new articles every hour. For example I consider most news flashes related to JNJ and GE to be ignorable, they aren't going to change my opinion on these companies. Also consider not paying attention to the earnings numbers from these companies.

- When researching new companies, use Finviz.com as your quick screener, and learn which numbers to look for in their big matrix. Use dividata.com for graphs of dividend history. I've filtered out new ideas in less than 1 minute using these tools.

Personally I must have close to a hundred tickers on my watch list, but I've learned to filter out most of the noise.

Dan

I learned in my student time that I have to set clear amounts of time to specific tasks otherwise I won't be doing them. So I force myself to take at least one hour to study (dividend) growth investing by reading blog posts, reading books (so far I have read The Intelligent Investor, The single best investment, Rich dad poor dad, Shareholder letters of Warren Buffett, Ultimate Dividend Playbook and some more) and screening for stocks. I regularly exceed the one hour because I really like to invest and learn about business and companies.

- Good tip on disabling notifications on the Seeking Alpha app because it sometimes does distract me! I always wondered if I really need those notifications, but I just needed the push from someone to turn them off .

- I will now focus more on the blue-chips because I got somewhat distracted by low yield high growth companies as Starbucks and Mastercard, but I need more stability and more reliable dividend growers.

- I already use Finviz.com as my main screener and I really like it!

Thanks for your answer.

(07-06-2014, 12:36 PM)cannew Wrote: Robert:

Since you are just beginning your DG portfolio (three years is not a lot of time), I'd suggest you concentrate on about 10 to 12 solid dividend growth companies. Selecting those should be fairly easy and you may already hold many of them. I'd much rather hold 12 great stocks than add 20 or more so-so stocks just to diversify into various sectors.

Once you've got a sizable position in the 10 or 12 and have more time, experience and money, then you may wish to expand your list. You won't go wrong by just buying great DG stocks, adding to them and holding.

As Dan says don't get caught up in what the so-called experts have to say.

I was really thinking about cutting back on the companies I currently own and go back to about 12 companies diversified over different industries because it makes researching and monitoring easier. I just find it very hard to sell some of my positions because they have treated me right . Will think twice about it now though...

(07-06-2014, 01:41 PM)Kerim Wrote: Great advice in this thread so far. I'd just add to be patient with all of it, Robert. Many of us are in a similar boat. Between my job and family, I'm surprised I find time for it at all. But it is truly cumulative, so as your knowledge and experience base grows, it gets easier and easier to just add incrementally. Eventually, you'll get comfortable enough with the tracking and monitoring system that you settle on that it will not be burdensome.

I monitor about 30 stocks at the moment. Each one takes quite a bit of time to get launched, but once that work is done, updating it every now and again isn't that hard or time-consuming. And of course some I monitor much more frequently / closely than others. I've got all the JNJ I'm going to have for a good long time (except for reinvestment). So I spend very little time on it.

All that said, I'm sure that I've missed some good opportunities because I haven't had the time to spend researching or developing a strategy. But, such is life.

I've said several times that if I didn't have the responsibilities of a family or job, I might be a pure value investor instead of a dividend growth guy. But I think DG is a forgiving strategy that doesn't require nearly the effort or knowledge that some other strategies do.

Anyway, hang in there and take it a bit at a time. With an hour a day, you can manage more than you'd think.

I have no family at this moment nor a relation (I'm just 23 years), so that doesn't need time from me yet . How do you monitor your positions? What do you check for on the 30 you own?

[cannew]

(07-06-2014, 11:36 AM)Robert_NL Wrote: I currently have 17 positions to monitor and I know some have over 30 positions to check, but where do these people get the time from to monitor them AND do research on new companies? How do you monitor your positions?

Here's a quote from my Mentor.

"When they are at least fairly priced (we use a stocks long term dividend average as a guide), I purchase certain common stocks with a long record of dividend growth and hold them for years, waiting for the dividend and the yield to grow. In the long run, yield provides most of the return. I also use yield, mainly, to determine value.
Some general ideas on the essence of dividend growth investing: You must believe it produces superior returns. You must stay on track. You can't waiver. You must buy only common stocks and only common stocks that pay a dividends. And further, only common stocks with a good dividend growth record. Load up on them when they are fairly priced…certainly not all at once. Valuation of the stock at the time you buy is most important. How do you know if they are fairly priced? I use a couple of value measures: yield, Graham's price and the cyclically adjusted (ten-year) price to earnings ratio. It's the growing income you are after (not high yield) so you do not have to eat into capital when you retire. Mutual funds do not produce much income: they eat into your capital to pay you. It's the long term income your assets produce that is important. You do not want a fixed income, do you? Motivation: Once you've owned a dividend growth stock for a decade or so, you will most likely be beating the market with you income alone. You must be brave to take the first step. Once your portfolio is set up, it pretty well runs itself…benign neglect.
Look at dividend growth investing this way. You will end up receiving much more than the original yield (dividend/price). As the dollar amount of your dividend increases over the years, you can say you are earning an increasing dividend yield on your original invested capital (higher dividend/ original price)".

I've followed his advice for years and I'm very satisfied with the returns and income growth over the years. Currently I only hold 21 stocks and will cut at least two at some point. I monitor the companies dividend, dividend growth and payout ratio, that's it. Over the past three years I've only made 5 trades and three were to buy. I'm waiting and hoping for a correction to buy more of what I already own.

[Robandcindy2]

If you are inclined to purchase a subscription to Morningstar you can load your portfolio into their website and receive a portfolio update daily which carries important news stories about each position. Quarterly you will receive in PDF format a detailed M* analysis of your portfolio.

If you don't subscribe to to any services, newsletters, etc. the M* basic membership is worth it.

Full disclosure: I have both a M* and M* Dividend Investor subscriptions. Very informative.

Cheers,

Rob

[Dividend Watcher]

I can spend several hours analyzing a company before I invest. Once I think I know how they operate and earn their money, it doesn't take much time after that.

One method I use is to watch how far the stock is moving vs. the market. If the market overall, and I've found the S&P 500 and DJIA pretty much track each other, is up/down 1/4% and a company on my watchlist is moving up/down a couple percent, then I dig into why. Most of the time it's just an over-reaction to something by the traders (earnings beat or miss, perhaps) but sometimes it's a material change in the company. Let's face it, most dividend growth companies are pretty well-known names if you've been around the market for any length of time. You shouldn't be jumping in and out of a stock position for a couple quarters of earnings surprises or disappointments.

[Robert_NL]

(07-06-2014, 04:37 PM)cannew Wrote:

(07-06-2014, 11:36 AM)Robert_NL Wrote: I currently have 17 positions to monitor and I know some have over 30 positions to check, but where do these people get the time from to monitor them AND do research on new companies? How do you monitor your positions?

Here's a quote from my Mentor.

"When they are at least fairly priced (we use a stocks long term dividend average as a guide), I purchase certain common stocks with a long record of dividend growth and hold them for years, waiting for the dividend and the yield to grow. In the long run, yield provides most of the return. I also use yield, mainly, to determine value.
Some general ideas on the essence of dividend growth investing: You must believe it produces superior returns. You must stay on track. You can't waiver. You must buy only common stocks and only common stocks that pay a dividends. And further, only common stocks with a good dividend growth record. Load up on them when they are fairly priced…certainly not all at once. Valuation of the stock at the time you buy is most important. How do you know if they are fairly priced? I use a couple of value measures: yield, Graham's price and the cyclically adjusted (ten-year) price to earnings ratio. It's the growing income you are after (not high yield) so you do not have to eat into capital when you retire. Mutual funds do not produce much income: they eat into your capital to pay you. It's the long term income your assets produce that is important. You do not want a fixed income, do you? Motivation: Once you've owned a dividend growth stock for a decade or so, you will most likely be beating the market with you income alone. You must be brave to take the first step. Once your portfolio is set up, it pretty well runs itself…benign neglect.
Look at dividend growth investing this way. You will end up receiving much more than the original yield (dividend/price). As the dollar amount of your dividend increases over the years, you can say you are earning an increasing dividend yield on your original invested capital (higher dividend/ original price)".

I've followed his advice for years and I'm very satisfied with the returns and income growth over the years. Currently I only hold 21 stocks and will cut at least two at some point. I monitor the companies dividend, dividend growth and payout ratio, that's it. Over the past three years I've only made 5 trades and three were to buy. I'm waiting and hoping for a correction to buy more of what I already own.

You sound like a smart person, just as your mentor! I currently use past 10 year P/E, 10 year dividend yield, 5 year price to free cash flow and PEG to determine 'fair value' of a company. I don't care to much if I pay $1 or $5 'too much' for it's stock because I think it doesn't really matter that much for my horizon (20+ years).

(07-07-2014, 05:24 PM)Robandcindy2 Wrote: If you are inclined to purchase a subscription to Morningstar you can load your portfolio into their website and receive a portfolio update daily which carries important news stories about each position. Quarterly you will receive in PDF format a detailed M* analysis of your portfolio.

If you don't subscribe to to any services, newsletters, etc. the M* basic membership is worth it.

Full disclosure: I have both a M* and M* Dividend Investor subscriptions. Very informative.

Cheers,

Rob

I really like Morningstar and I regularly use them for quick fact checking on companies. I did read some issues of the M* Dividend Investor subscriptions and I liked the monthly issues. But I think both services (M* premium and M* Dividend Investor) are to costly for me. I rather spend the $380 per year for both subscriptions on dividend stocks than to subscribe to a online service.

(07-08-2014, 02:23 AM)Dividend Watcher Wrote: I can spend several hours analyzing a company before I invest. Once I think I know how they operate and earn their money, it doesn't take much time after that.

One method I use is to watch how far the stock is moving vs. the market. If the market overall, and I've found the S&P 500 and DJIA pretty much track each other, is up/down 1/4% and a company on my watchlist is moving up/down a couple percent, then I dig into why. Most of the time it's just an over-reaction to something by the traders (earnings beat or miss, perhaps) but sometimes it's a material change in the company. Let's face it, most dividend growth companies are pretty well-known names if you've been around the market for any length of time. You shouldn't be jumping in and out of a stock position for a couple quarters of earnings surprises or disappointments.

I don't care much if one of my holdings suddenly jumps in price or goes down, although I like to see the reasoning why (just as you do). I have only sold some speculative stocks the last three years and put all that money in to a small-cap ETF, just for the capital appreciation. I never sold any of my dividend stocks as I don't like to cut money trees .

[cannew]

(07-08-2014, 01:56 PM)Robert_NL Wrote: I currently use past 10 year P/E, 10 year dividend yield, 5 year price to free cash flow and PEG to determine 'fair value' of a company. I don't care to much if I pay $1 or $5 'too much' for it's stock because I think it doesn't really matter that much for my horizon (20+ years).

Even given a 20+ time frame I'd still like to pick up a 1/4% or more of yield. With each dividend increase that 1/4% will make a difference in the long term.

[Robert_NL]

So, now that earning season is fully ongoing, how do you guys process the information from your holdings? Do you read 10-Q's as their filled? Do you store financial information in a file?

[cannew]

(07-19-2014, 03:49 AM)Robert_NL Wrote: So, now that earning season is fully ongoing, how do you guys process the information from your holdings? Do you read 10-Q's as their filled? Do you store financial information in a file?

With each quarter I record the Div Paid and the % increase (if any), the amount received, and the re-investments of the dividends when they occur.

If it was the end of the year I record the annual dividends, % Increase over previous year and the Average Increase over the years.

I would only do more if there was concern about the dividend or if the dividend did not increase for the year (that I did not expect).