The market is down fairly big this morning after being up big yesterday. My Spidey sense tells me that increase in volatility usually occurs prior to a correction of some sort. As we all know the market has grinded higher and is way overdue for said correction. It is my humble opinion that those days are soon upon us.
In my dividend growth portfolio I will hold and reinvest all dividends through the correction. This is so even though many such as PG, JNJ, KMB, LOW and WMT have had excessive run ups. I believe excessive trading and trying to time the markets is bad for a long term portfolio. If the stocks tank, my dividends will buy more shares. I want to tell stories like some of the old timers: "I bought $10,000 of Coca-Cola 30 years ago, reinvested my dividends and now it's worth (insert some ungodly some of money here) and my annual income exceeds my initial investment. That's what I'm talkin' 'bout.
Aside from dividend growth I am still staying in the game with some put selling. I am only using about 30% of my cash to trade and I am only selling out of the money puts on blue chip, dividend growth stocks. Presently I have trades going in XOM, MSFT, FCX and LO. I want to have money to invest/trade the correction. I don't see many good dividend growth buy and hold opportunities at this time but I'm watching closely.
Wednesday, March 27, 2013
Thursday, March 21, 2013
Morning Thoughts...
The market is down a bit this morning. In my humble opinion we are looking at a short term top. I expect a healthy correction will be coming soon. The question becomes will this correction create "fat pitch" type opportunities. That remains to be seen but with QE3 in full swing I have my doubts.
I believe we are going to see situational opportunities. In other words, certain stocks or sectors will get hit harder than others. If a blue chip stock I trade/invest in is pushed to the lower end of it's trading channel or it's yield inflates to a greater than average percentage I will look to pull the trigger.
Of course, I will be looking at trading/investing in stocks that raise their dividend with special focus on stocks set to raise their dividend with their next announcement. Stocks I am looking closely at investing in now include most prominently Ensco, UPS and OHI with Chevron close behind. By investing I mean long term buy and hold, by trading I mean selling out of the money puts. Thank you.
I believe we are going to see situational opportunities. In other words, certain stocks or sectors will get hit harder than others. If a blue chip stock I trade/invest in is pushed to the lower end of it's trading channel or it's yield inflates to a greater than average percentage I will look to pull the trigger.
Of course, I will be looking at trading/investing in stocks that raise their dividend with special focus on stocks set to raise their dividend with their next announcement. Stocks I am looking closely at investing in now include most prominently Ensco, UPS and OHI with Chevron close behind. By investing I mean long term buy and hold, by trading I mean selling out of the money puts. Thank you.
Wednesday, March 20, 2013
Morning Thoughts
The market continues to climb. That's great for our buy and hold dividend growth portfolio and great for our put selling trades in MSFT, FCX, LO and XOM. It's not so great for entering new positions.
I say this because it took me many years to put into practice buy low and sell high. In my humble opinion, patience is paramount in being a good investor. I anticipate that the little guy investor will start pouring money into the market now so they don't miss the gains. As usual they will probably be too late. They will buy high with greed and sell low on fear.
With the continued weakness of the U.S. Postal Service I am looking to enter into a position in UPS or FedEx. Today FedEx is down big with a weak earnings report and guidance. They are losing in Europe. UPS is stronger in Europe due to a recent acquisition. UPS also pays a nearly 3% dividend which is rising. As such, I am watching closely to enter into a long term buy and hold dividend growth investment in UPS.
Other long term buy and holds on my wish list are Chevron, Deere, Becton-Dickinson and Omega Healthcare Investors, a REIT. I only purchase REIT's in our Roth IRA so we're not taxed on the income.
Like a lot of investors I'm waiting for a pullback. In the meantime I have put selling trades on four positions, albeit, with 75% of my trading account sitting in cash. I'm watching and waiting.
I say this because it took me many years to put into practice buy low and sell high. In my humble opinion, patience is paramount in being a good investor. I anticipate that the little guy investor will start pouring money into the market now so they don't miss the gains. As usual they will probably be too late. They will buy high with greed and sell low on fear.
With the continued weakness of the U.S. Postal Service I am looking to enter into a position in UPS or FedEx. Today FedEx is down big with a weak earnings report and guidance. They are losing in Europe. UPS is stronger in Europe due to a recent acquisition. UPS also pays a nearly 3% dividend which is rising. As such, I am watching closely to enter into a long term buy and hold dividend growth investment in UPS.
Other long term buy and holds on my wish list are Chevron, Deere, Becton-Dickinson and Omega Healthcare Investors, a REIT. I only purchase REIT's in our Roth IRA so we're not taxed on the income.
Like a lot of investors I'm waiting for a pullback. In the meantime I have put selling trades on four positions, albeit, with 75% of my trading account sitting in cash. I'm watching and waiting.
Tuesday, March 19, 2013
Are Traditional Dividend Payout Ratio's Accurate?
Please click here to read an excellent article on how dividend payout ratio's are calculated. This writer further points out how they can be misleading. Finally the author suggests a better way to calculate the ability of a company to safely pay and increase their dividend.
I was closely looking at Chevron but this article gave me pause.
I was closely looking at Chevron but this article gave me pause.
Monday, March 18, 2013
Sold XOM Naked Puts
Today I sold the May 82.5 puts on Exxon Mobil. XOM is due for a dividend increase before this expiration. If the stock were to fall to 82.5 the yield, with dividend increase, would be close to 3%. If it hits that point I'm happy to own this stock at that price, long term, buy and hold.
Back of napkin returns if XOM puts expire worthless is 4.7% return on maintenance.
I've nibbled at a few put sells including LO, FCX and MSFT. All are doing well, however, I'm well aware that a correction may/should be coming.
Back of napkin returns if XOM puts expire worthless is 4.7% return on maintenance.
I've nibbled at a few put sells including LO, FCX and MSFT. All are doing well, however, I'm well aware that a correction may/should be coming.
Friday, March 8, 2013
Current Retirement Portfolio
Altria Group
AT&T
Coca-Cola
Conoco-Phillips
Exxon Mobil
Johnson & Johnson
Intel
Kimberly-Clark
Lowe's
McDonald's
Microsoft
PepsiCo
Phillip Morris
Phillips 66
Proctor & Gamble
Prospect Capital
Raytheon
Realty Income Corp
Wal-Mart
We have bought them in roughly equal increments. All have rising dividends. Realty Income and Prospect Capital pay monthly dividends. We reinvest dividends back into the stock from which the dividend came.
AT&T
Coca-Cola
Conoco-Phillips
Exxon Mobil
Johnson & Johnson
Intel
Kimberly-Clark
Lowe's
McDonald's
Microsoft
PepsiCo
Phillip Morris
Phillips 66
Proctor & Gamble
Prospect Capital
Raytheon
Realty Income Corp
Wal-Mart
We have bought them in roughly equal increments. All have rising dividends. Realty Income and Prospect Capital pay monthly dividends. We reinvest dividends back into the stock from which the dividend came.
New Position in Wife's IRA (PSEC)
Yesterday I bought Prospect Capital (PSEC) in my wife's Roth IRA. PSEC is a business development company. It currently pays .1101/share per month. This is a yield of over 11%.
I do not look at this issue as a certain buy and hold and I will be monitoring it closely. It has been hard to find undervalued investments in this QE fueled market rally.
I have been nibbling at put selling with successful OTM trades on Apple, Intel, GE and Altria. I presently have two trades going with YUM and FCX which are going well.
It seems kind of strange to be in a market that just keeps rising. The lack of fear for such an extended period without a correction is not something I've seen in quite a long time.
I do not look at this issue as a certain buy and hold and I will be monitoring it closely. It has been hard to find undervalued investments in this QE fueled market rally.
I have been nibbling at put selling with successful OTM trades on Apple, Intel, GE and Altria. I presently have two trades going with YUM and FCX which are going well.
It seems kind of strange to be in a market that just keeps rising. The lack of fear for such an extended period without a correction is not something I've seen in quite a long time.
Wednesday, March 6, 2013
New Stock in Dividend Growth Portfolio
Today my wife and I bought Raytheon (RTN), the defense contractor. It has international exposure, a low payout ratio, high dividend growth and is set to raise it's dividend next quarter.
I look at this investment as a buy and hold issue. It also diversifies our portfolio a bit and adds additional international exposure as well.
We will reinvest all dividends back into the company. Let the compounding begin!
I look at this investment as a buy and hold issue. It also diversifies our portfolio a bit and adds additional international exposure as well.
We will reinvest all dividends back into the company. Let the compounding begin!
BDC's, mREIT's and CEF's?
I've been doing a lot of reading lately about these type of investments. They offer very high yields. What attracts me to some is the monthly income stream. I am looking at PSEC and ARR right now. Also, DX a high quality mREIT, is a Dividend Challenger but since I've been watching it, it has gone up nearly 10%.
I've been looking at these because the market keeps grinding up and up thereby making it difficult to find undervalued entry points in dividend growth stocks. These are not the type of equities though that one can just buy and hold with minimum oversight.
I'm thinking of pulling the trigger on Raytheon (set to raise dividend soon, low payout ratio, high dividend growth rate) as a dividend growth addition to our portfolio but also have some other money to invest. I'm debating whether to wait for a drop and enter into a dividend growth stock position or to give one of these other issues like PSEC a whirl.
It's been a long time since fear has taken over the market and provided good buying opportunities. Should we be patient and wait or try out a high yield issue? Do you think Helicopter Ben's QE will continue to send the market higher? What do you all think?
I've been looking at these because the market keeps grinding up and up thereby making it difficult to find undervalued entry points in dividend growth stocks. These are not the type of equities though that one can just buy and hold with minimum oversight.
I'm thinking of pulling the trigger on Raytheon (set to raise dividend soon, low payout ratio, high dividend growth rate) as a dividend growth addition to our portfolio but also have some other money to invest. I'm debating whether to wait for a drop and enter into a dividend growth stock position or to give one of these other issues like PSEC a whirl.
It's been a long time since fear has taken over the market and provided good buying opportunities. Should we be patient and wait or try out a high yield issue? Do you think Helicopter Ben's QE will continue to send the market higher? What do you all think?
Saturday, March 2, 2013
My Dividend Growth Stock Portfolio
I love selling puts but my wife and I also have a portfolio of dividend growth stocks which we hope will provide the income we need for retirement without having to liquidate the principal. Our portfolio as of today contains the following stocks:
Johnson & Johnson
Intel
AT&T
Realty Income Corp
Phillip Morris
Exxon Mobil
Microsoft
Proctor & Gamble
Coca-Cola
McDonald's
Altria Group
Conono-Phillips
Phillips 66 (spun off from Conoco)
Wal-Mart
Kimberly Clark
Pepsico
Lowe's
For the purpose of diversification I will probably add a financial dividend growth stock like Aflac and a utility like Southern Company. Are you all aware of the the Dividend Champions, Challengers and Contenders list? Google it, it's awesome.
Johnson & Johnson
Intel
AT&T
Realty Income Corp
Phillip Morris
Exxon Mobil
Microsoft
Proctor & Gamble
Coca-Cola
McDonald's
Altria Group
Conono-Phillips
Phillips 66 (spun off from Conoco)
Wal-Mart
Kimberly Clark
Pepsico
Lowe's
For the purpose of diversification I will probably add a financial dividend growth stock like Aflac and a utility like Southern Company. Are you all aware of the the Dividend Champions, Challengers and Contenders list? Google it, it's awesome.
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