06-27-2019, 10:50 AM
(06-27-2019, 10:43 AM)fenders53 Wrote:(06-27-2019, 09:34 AM)Otter Wrote:(06-27-2019, 09:21 AM)Ron Ricco Wrote: I just counted, and as far as individual stocks, I am at about 50. I have them all set up in Yahoo to see the news each day, but except for a few I don’t really feel there is that much to manage. Since they are all aristocrats or at least close to it, I tend to look at it more from the standpoint of is there some core reason why the dividend may be cut in the future?
As an example, KO or maybe MO. With consumer sentiment changing on soft drinks, smoking etc, it does concern me whether they would continue to pay in my retirement years. On the other hand, they are diversified and will probably continue to do so, but it still gives me pause and I will continue to watch them closely.
Other stocks that get beat up by “trade war” news (pick your issue) but have survived recessions and depressions, I tend to just let them “drip away.”
I follow a similar strategy, and tend to buy dividend growth stocks that are beat down at the moment. Over time, the diversification turns into its own private mutual fund, with no fees. With the risk that spread out, a dividend cut or two won't be the end of the world.
There are a number of current stars in the portfolio that were complete dogs in the eyes of investors just a few years back (CSCO, CLX, DEO, DOV, GWW, TROW, and VFC all spring to mind). I'm buying stuff now that was too expensive in the past (LOW, MMM).
I own too many stocks to effectively track them, but it isn't a problem because the risk is so spread out. The portfolio income keeps going up nicely each year, so there's that.
Here's hoping the bull market makes all of us look very wise in the end. As long as we stay diversified and sufficiently invested in equities I think it works out. I sleep better with some cash because I do think the market will stumble to a better valuation some year soon. That's not how I rolled the first 25yrs for sure.
I am going to do a little less bottom fishing though. To some degree I've missed the bus feeding high div plays while the healthier stocks ran higher. It's tough for me to not look for what appear to be big sales.
I am comforted by the fact that, over pretty much any long-term timescale you look at since we have had markets, the valuation line goes up as time progresses. There are dips, troughs, depressions, bear markets, etc., but the overall history of markets is one ultra-long bull. If that trend changes, I hope you have enough canned goods and ammo in your shelter, because your equity holdings will be the least of your concerns.
I haven't ever seen a cogent argument against diversified buy and hold that makes sense within the context of historical norms. Sure, the historical norms could change and Lord Humungus could be bringing the horde over the hill to steal my compound's gasoline, but the only thing I'll be using the Wall Street Journal for at that point is kindling, if I still have any copies left.