Dividend Investors Unite!

[TomW]

I was wondering if I was alone as a dividend investor as a retirement income strategy? This puts one squarely in the territory of REITS, CanRoys, Closed End Funds, Telcos and Energy; but many of these equities have been delivering for years despite persistent rumors of their imminent demise. It seems only reasonable to look for returns in the teens plus some capital appreciation in spite of the judgements of the 24-year-old financial experts one sees at the lunches who suggest that any reasonable return is too risky for old folks and you should give them your money to put into an annuity paying 3% return and drawing down your principal at 4% (plus management fees.) Bah!

[Lucko]

You are not alone, but many seniors can't stomach risk. But, no risk, no reward. It may well be that long term some reits may drop in price, but I feel the returns will still beat banks and annuities. I find that I do better on my own then I ever did having some one else pulling the strings and commissions.

[784caroline]

In addition to your suggetsions there are a number of others that offer decent dividends.......ETFs such as DVY, Preferred stock such as PGF, The Villages Tax Free Munis District 9 offered in todays paper ( These are NOT the ones under IRS scruitiny), or Blackrock Resources and Commodities trust under symbol BCX.

There are many more and I agree ... stay away from annunities or products that guarantee you will not lose money.

[rjm1cc]

I think dividend paying is a good way to go. However as the amount of the dividend increases the risk increases so stick with good companies and investments you understand.

[Snowbirdtobe]

I just sold dd up 30% and mwe up 60% in under a year.
They both had a great yield before the stock price jump.
They were up so much the yield fell and I'm waiting for a pullback.
I'm looking at some of the telcos.

[tpop1]

Sounds like potential for a club...I'd join!!!!

[l2ridehd]

I to like dividend stocks. There is a pretty good news letter on the subject called "The Dividend Machine" Some of their recommendations include:

Johnson & Johnson JNJ
Altria MO
Coca-Cola KO
Abbott Laboratories ABT
Philip Morris Intl. PM
Wal-Mart Stores WMT
Automatic Data Processing ADP
McDonald’s MCD
Lockheed Martin LMT
Berkshire Hathaway BRK.B
Kraft KFT
Microsoft MSFT
Intel Corp INTC
Visa, Inc V
Bristol-Myers Squibb* BMY
Cisco Systems CSCO

I own 5 of these stocks and all have made very positive capital gains and provided a decent dividend.

I just bought Cisco which should provides an excellent growth plus a small dividend. And where do you find any company sitting on 40 billion in cash. That alone equals $7 in every share value.

Also be interested in an investment club focused on dividend stocks.

[RiteLucky]

I'd love to be in an investment club too. I'll be moving there very soon and I do all my own investing. I agree with being in some dividend paying stocks/ETFs and keep a few in the IRA portion of my portfolio.

[SoHumble]

I like RSO

[brostholder]

My dividend investments are what fund my retirement. I have been heavily invested in pipeline stocks for a number of years. As MLP's (master limitede partnerships) they have been paying me 8% TAX FREE in addition to their capital appreciation. I am also in a number of REITS and a few foreign utilities. I also think this is a great idea for a club.

[TomW]

A key metric for me is the payout ratio. I like to see sufficient earnings to support the dividend. I like REITs but feel I have to monitor their earnings very closely. I am also a fan of RSO and it is cycling toward the lower end of its price range now.

[Pturner]

TomW, we also like dividend stocks. An investment club focusing on dividend returns-- count me in!

I2ride, thanks for the newsletter tip.

[JohnN]

sign me up for the club too,
I'm mostly a novice, but this is interesting

[brostholder]

I bet that some of the folks from the local fidelity office or the other local brokerage firms would love to come speak at our future club meetings.

[l2ridehd]

I do agree you need to monitor the cash flow of dividend stocks very close. GM is a prime example. They used to borrow money to continue the dividend payment. And yet people still loved the stock because of it's dividend. How dumb is that. The company was going broke and was still paying a dividend. Watch the cash flow so you know where the money is coming from to pay the dividend.

[Boomer]

I think dividend paying is a good way to go. However as the amount of the dividend increases the risk increases so stick with good companies and investments you understand.

Good morning, rjm1cc,

That's classic investment advice that can so often get lost in the razzle-dazzle of the spiels and the spins out there, everywhere. Warren Buffett agrees. "Understand what you own," says he.

I have shamelessly confessed here on TOTV, in the past, more than once, about that bubble-dancing I did back in the 90's. I learned. The only credit I can give myself after that one is that I did not bet the whole farm, just the butter and egg money. But I sure did learn. Experience is the best teacher. That's for sure. But I was young (sigh) and still highly employable.


I to like dividend stocks. There is a pretty good news letter on the subject called "The Dividend Machine" Some of their recommendations include:

Johnson & Johnson JNJ
Altria MO
Coca-Cola KO
Abbott Laboratories ABT
Philip Morris Intl. PM
Wal-Mart Stores WMT
Automatic Data Processing ADP
McDonald’s MCD
Lockheed Martin LMT
Berkshire Hathaway BRK.B
Kraft KFT
Microsoft MSFT
Intel Corp INTC
Visa, Inc V
Bristol-Myers Squibb* BMY
Cisco Systems CSCO

I own 5 of these stocks and all have made very positive capital gains and provided a decent dividend.

I just bought Cisco which should provides an excellent growth plus a small dividend. And where do you find any company sitting on 40 billion in cash. That alone equals $7 in every share value.

Also be interested in an investment club focused on dividend stocks.

Hi l2,

I own two on that list. Although I have been doing the old approach/avoidance routine with MO for a long, long time. That dividend is tempting. I am still mad at myself for missing MCD at its low.

I actually woke up long enough to take a little profit on a couple of utilities recently.

Euphemistically speaking, I have to think we could be nearing some (ahem) buying opportunities. There are some things that I like that are too close to those 52-week highs right now to suit me.

I wish I had some BRK -- 'A' would be really nice. Then I could go to the meetings. (sigh)

Warren Buffett once said to his shareholders, "Lethargy bordering on sloth remains the cornerstone of our investment style." -- I can relate to that.

Three-toed Boomer

[batman911]

I own MO, PM and KFT. The latter two due to spin offs from MO. I orginally bought Philip Morris in the early 80s when I quit smoking. Electric utilities are, IMHO, one of the safest dividend paying stocks. They can always just raise the rates if they need more money. Electric utilities are a good long term investment if you do not plan to sell and will be satisfied with a 5% dividend. Higher inflation can easily spoil that party if bond rates climb above that 5%.

[aljetmet]

Surprised that AT&T, Verizon and Reynolds weren't on the list.
Interesting that Cisco, Microsoft and Intel were categorized as dividend stocks. I owned Intel for a long time but not for it's dividend...

[Shimpy]

Count me in on the ground floor for an investment club. I checked and was supprised that the college in TV offers no courses. I just got back into the market after exiting at a very good time. I'm concentrating on dividend stocks. I've always in the past used mutual funds. I'm still going to use mutual funds, but have really enjoyed trading and so far so good.

[Carla B]

Although it is not limited to "dividend investing" I'm sure the "Investment Education Club" established last year would explore this subject if someone would present it. The group is always looking for ideas for discussion. It already has a venue (Seabreeze Rec Center), and a time slot (2nd and 4th Thursdays at 3:30 p.m.)

[Snowbirdtobe]

KMP CEO Rich Kinder is on Cramer tonight. I just saw the interview. He talks about the function of an MLP and returns. You can see the rebroadcast on CNBC tonight at 11 or download the program from iTunes later tonight.

[Shimpy]

Although it is not limited to "dividend investing" I'm sure the "Investment Education Club" established last year would explore this subject if someone would present it. The group is always looking for ideas for discussion. It already has a venue (Seabreeze Rec Center), and a time slot (2nd and 4th Thursdays at 3:30 p.m.)

The "Investment Education Club" has dividend investing subject coming up in July.

[Dan =^..^=]

I enjoy reading the Seeking Alpha investment web site.

They also have a section devoted to Investing for Income: http://seekingalpha.com/dashboard/investing_income

[Boomer]

I enjoy reading the Seeking Alpha investment web site.

They also have a section devoted to Investing for Income: http://seekingalpha.com/dashboard/investing_income


I like Seeking Alpha, too. I do not subscribe, nor do I read it every day, but I pick up on some of the articles when they are listed under a stock I am looking up on Yahoo or wherever.

I also like The Motley Fool and read it in the same way. Lately though, so many of Fool's articles get all bogged down in some elaborate formula. Most of those formulas start to make me feel like my head is being pinched in a vise. So now, mostly, I like Seeking Alpha's articles best. Not so many formulas.

Besides, Buffett said, "Beware of geeks bearing formulas."

Boomer

[bmascelli]

I've been writing short term covered calls on quality good paying dividend stocks for some tme now. If you manage your position carefully you can usually collect your next quarterly dividend and at the same time collect your call premium leading to an even greater return.

[Boomer]

The "Investment Education Club" has dividend investing subject coming up in July.

I love the idea of an investment club called the "Investment Education Club." We were in TV for a short time last winter and I attended one of the meetings. I would have attended more of them, but we had to return home much sooner than we had planned. If I were there now, I would certainly not have missed the one on dividends......oh well......maybe next time.

I don't know if investment psychology will ever come up as a topic for your meeting, but if any of you have an interest in the psychology of investing -- like I do, you might like a book that was recently published. I just started reading it. The author is Louann Lofton who works for Motley Fool. The book is Warren Buffett Invests Like A Girl. It's fun to read.

On a very serious note -- not fun to read at all -- I just finished an article in the August issue of Money magazine titled "Keep the Sharks at Bay." It is part 3 of a series "Protecting Your Parents." It says that seniors lost nearly 3 billion dollars, last year, to financial predators. The article is excellent but really sad.

I hope you do not feel like I came in here and gave everybody homework. The book is a suggested reading if investment psychology is an interest. The article in this month's Money -- well.......that one oughta be required reading for everybody. Warning: It is scary as hell.

Boomer

[HelenLCSW]

Your yield is based on your purchase price so your yield didn't fall

[aljetmet]

I calculate yield on current valuation. You can always sell and reinvest and possibly improve your overall yield. The moral of the story is to constantly review your portfolio. You may think you have great returns on historical purchase price when there are better yields and investments out there....

[brostholder]

This economy and stock market are going to make me lose what hair I have left. As I have posted previously, I invest in a range of dividend paying stocks. Most are mlp's but I have a number of other "non-pipeline" stocks as well. While these investments have stood up very well even through the crash of 2008, it is difficult to watch the volatility that is going on today. I realize that as long as the companies I have stock in do not cut their dividends, then the day to day gyrations of the market do not effect my income at all. But these last 6 months make me wish that I was wealthy enough to pull all my money from the market and live on safer investments. Who can guess where we are headed now after Bernanke's statements yesterday?

[cybermuda]

a bit strange that no-one has admitted to making any losses

in a zero-sum game, with all of TV making out like bandits, there must be others out there really hurting

[Snowbirdtobe]

If you take the dates of the past posts and look at the stock price at that date you can calculate the profit or loss.
I still like DD and MWE and bought both back after I sold them as indicated in my past post.
I recently added GE which I bought for 14.85 on 9/12. It pays 4%.

Everyone in TV is a winner.

[Raen Dear]

What do you all think about mutual funds that invest in dividend stocks such as Vanguard Dividend Growth and probably Gabelli? I am thinking about a small investment, not a major move.

[aljetmet]

I purchased DVY (ISHARES TR DOW JONES SELECT DIVID INDEX FD) on 12/31/10 and it's down 1.8% as of yesterday. Not bad compared to other growth/blend mutual funds I own.
I do not reinvest dividends or cap gains. I like to accumulate the cash and then decide what to do.

Just recently purchased ELi Lilly currently paying 5.3%. I am a big fan of dividend paying stocks.

[railroadman]

I purchased DVY (ISHARES TR DOW JONES SELECT DIVID INDEX FD) on 12/31/10 and it's down 1.8% as of yesterday. Not bad compared to other growth/blend mutual funds I own.
I do not reinvest dividends or cap gains. I like to accumulate the cash and then decide what to do.

Just recently purchased ELi Lilly currently paying 5.3%. I am a big fan of dividend paying stocks.

Another great Utility Stock is DUKE POWER. Paying 5.10%, very safe and low risk.

[aljetmet]

I know! But I own EPD, KMP and PAA. I owned Lilly about 30 years ago. They took over a small company I owned. I sold the stock to buy a dish washer:D

[rjm1cc]

What do you all think about mutual funds that invest in dividend stocks such as Vanguard Dividend Growth and probably Gabelli? I am thinking about a small investment, not a major move.

A dividend paying mutual fund or ETF fund is a good idea if it fits your needs. You should be looking for a flow of income, if the value of the investment goes up or down that should not change your need for income and you would not be selling. Your goal should be that the dividends paid increase over the years and hopefully keep up with inflation.

[brostholder]

I've been writing short term covered calls on quality good paying dividend stocks for some tme now. If you manage your position carefully you can usually collect your next quarterly dividend and at the same time collect your call premium leading to an even greater return.
I sure wish I knew how to do that. You would be a great speaker at the club!

[rjm1cc]

I sure wish I knew how to do that. You would be a great speaker at the club!
e\E*Trade has a lot of educational material that covers options. Also look for references to the market guys. I assume other online firms have similar info.

Try https://us.etrade.com/e/t/irc/stockanalysis?videoed=SA-BAS-V-4&coid=C_HP_MOD2_WhatToConsider_3min_Default#

[brostholder]

e\E*Trade has a lot of educational material that covers options. Also look for references to the market guys. I assume other online firms have similar info.

Try https://us.etrade.com/e/t/irc/stockanalysis?videoed=SA-BAS-V-4&coid=C_HP_MOD2_WhatToConsider_3min_Default#
thanks!!

[Raen Dear]

A dividend paying mutual fund or ETF fund is a good idea if it fits your needs. You should be looking for a flow of income, if the value of the investment goes up or down that should not change your need for income and you would not be selling. Your goal should be that the dividends paid increase over the years and hopefully keep up with inflation.
I am looking at increasing income in the future. Right now my income is fine but my resources are a pension plus social security and, while they are supposed to go up, I'm not convinced they will be adequate. So I am looking to lock in some future income. Is this the way to do it?

[batman911]

Keep in mind, along with higher income comes higher risk. You need to ask yourself "Can I afford to lose it all?" The experts recommend you only go high risk with money you can afford to lose.

[rjm1cc]

I am looking at increasing income in the future. Right now my income is fine but my resources are a pension plus social security and, while they are supposed to go up, I'm not convinced they will be adequate. So I am looking to lock in some future income. Is this the way to do it?
Don't think anyone knows the answer to that one. At this point I would say dividend paying stocks is probably the only option for my situation. Yours could be different.
I have seen a few financial planners recommend the purchase of an immediate annuities when your resources may not be adequate to meet your income needs. The idea is you purchase the annuity x years into retirement because inflation has reduced the value of your pension and your assets would have to be invested in high risk investments to earn enough income. This could be something to consider down the road. I do not think you would want to buy an annuity until interest rates increased. Annuities can be expensive so be sure to shop (try Vanguard and Fidelity to start) around and maybe hire a fee only financial planner.

[Snowbirdtobe]

Bought more T today (10/10) at $28.85. Pays 6%.

[jtr3907]

What is "T"?

Thanks.

[aljetmet]

AT&T, my favorite.

[railroadman]

AT&T, my favorite.

Dividend.com has AT&T and VZ in their top 20, best ranked
stocks. I have the VZ shares, with a dividend of 5.4%

[TomW]

Also consider MO and PHT for a dividend portfolio.

[Shimpy]

Dividend.com has AT&T and VZ in their top 20, best ranked
stocks. I have the VZ shares, with a dividend of 5.4%

I've got them both. I have several times bought T when it goes way down to a point below what my average cost per share is and bought some more. This lowers my average cost per share and makes the dividend more attractive.

[RayinPenn]

1. Never, I say never invest more than 12% of your funds in any single stock. Trust me on this no stock is immune to a disaster. I don't care if it has done fabulously for you - it is a weak link.
2. Use dividend mutual funds to diversify your risk. Including interntionall dividend funds.
3. If you like utilities be warty of electric companys with nuclear power. Anyone really know how to dispose of an old reactor or fuel? if you still must- remember rule number 1. Yes I know there are some great cos w/nuclear (just think unlimited operational risk)
4. If you are running to the Internet every day to check your stock prices - find a new hobby. The market gyrates with every politicians sneeze. Even if you are 70 invest like you are in for the long haul. I have seen several crashes in my life and watched my friend panic pull out and lose their shirts. Had they rode it out well they woul be fine.
5. If you are worried about inflation (and you should be) and you have fixed instruments. If you can move some money to the market.
6. Understand the business you are buying and look for firms with established track records.

[l2ridehd]

Good advise Ray. I would add one more thing. No one and I really mean no one beats the market long term. It is not possible. Everyone of us can claim we did for 3 years or a few maybe 5 years, but anyone who tells you they are ahead of the market long term is telling a lie or is an inside trader. Even Peter Lynch who did it for several years running will tell you he got out because he could not continue to beat the market.

If you believe the above, the only investment that makes any sense is the lowest cost mutual fund that is a total market index fund. I do everything possible to match the total market in low cost index funds. I use only Vanguard (lowest ER) index funds. Total stock market, Total International and Total Emerging markets and Total Bond. And yes I to play trying to beat the market with dividend stocks and a couple ETF's. But for the major part of my investments I use index funds and try to map to the world markets.

I also have an IPS (investment policy statement) that has a few triggers to move in and out when things go way down or way up, but I stick to my AA (asset allocation) re-balance at certain trigger points, and stick to my plan.

And once more, no one beats the market long term. It has been proven many many times.

[justjim]

My Financial Advisor believes dividend stocks are the way to go. However, there are some that want to raise taxes by increasing the tax you will pay on your dividends. Wonder who?

[rubicon]

For those of you enjoying your dividend paying stocks be prepared for the beginning of a long drop unless the party in power renews the tax cuts. Today stocks trading at $100 and paying a $10 dividend return $8.50 after tax (15% tax.) On January 01, 2013 the dividend rate will rise some 43.4% because the 2001 Bush tax expires and in addition ObamaCare adds an additional 3.88% on all forms of investment income So come Jan 1 investors won't keep $8.50 but rather 43.4% less or $5.66 meaning a stock yield will move from 8.50% to 5.66% Experts predict investment returns will be lowered by 30%. That will teach us 1%. Oh I am a 99% Hmmmmmmmmmm

[weeder01]

Agree on Verison being on the list would also include EPD enterprise products partners and check out GABUX Gabelli utility fund. It pays $.07 per share per month and shares trade at $5.75 (14.6% div)

[rjm1cc]

My Financial Advisor believes dividend stocks are the way to go. However, there are some that want to raise taxes by increasing the tax you will pay on your dividends. Wonder who?

Those that like to spend.

[Shimpy]

Those that like to spend.

And there was the promise that those making less then $250,000 wouldn't see one penny increase in taxes.