Anyone Else Only Buying Dividend Stocks?

[Retired To Win]

... OP - you simply had an asset allocation that was too high in equities. AA needs to be set to prevent emotions from causing one to sell low.

That is way easier said than done. There is a whole subset of psychology termed behavioral finance that studies how our deepset and ingrained fight-or-flee INSTINCT wrecks havoc with the best laid asset allocation plans.

My approach totally solves that problem for me by keeping me focused on the dividend.

In my mind, the value of a stock is in its dividend, not its market price. So now I don't freak out when the market price of any of my stocks drops. As long as I can determine that the dividend (which ranges from 6% up to 10% plus) will continue to be paid, I do not concern myself. The dividend is my mental defense line against stress and anxiety. Against pulling the sell trigger based on nothing but herd-driven market panic.

I just keep collecting those high dividends.

This investing mindset works for me. But I am not a financial advisor and I am not saying this will work for you. So, has an asset allocation strategy kept you from pulling the sell trigger on sudden or deep price drops?

[cardtrick]

That is way easier said than done. There is a whole subset of psychology termed behavioral finance that studies how our deepset and ingrained fight-or-flee INSTINCT wrecks havoc with the best laid asset allocation plans.

My approach totally solves that problem for me by keeping me focused on the dividend.

In my mind, the value of a stock is in its dividend, not its market price. So now I don't freak out when the market price of any of my stocks drops. As long as I can determine that the dividend (which ranges from 6% up to 10% plus) will continue to be paid, I do not concern myself. The dividend is my mental defense line against stress and anxiety. Against pulling the sell trigger based on nothing but herd-driven market panic.

I just keep collecting those high dividends.

This investing mindset works for me. But I am not a financial advisor and I am not saying this will work for you. So, has an asset allocation strategy kept you from pulling the sell trigger on sudden or deep price drops?

And how exactly do you determine that a company will pay out dividends in the future? It's been easy for the past 5 years, because almost everyone has been increasing dividends. Futures dividends are just as unpredictable as stock prices, IMO.

[jpham540]

My core portfolio is index funds, but I just started building my dividend portfolio this year after reading some blog and books about it. I'm also hoping to earn some monthly passive income. I will still keep my index funds, hopefully one day it can dish out some major passive income so I can retire early.

[corn18]

As part of a well balanced breakfast, I like dividend stocks. I opened an IRA for my wife and I and just buy dividend stocks in them. So far I just have O which returns a nice 4.5% dividend and has also gone up 7% in stock price. So that's a win, win. Plan to add some more later this year. Maybe some PG, KO, JNJ, XOM, MCD or PEP. All long term solid dividend payers. Not in the 10% class (more like 2.5% to 4%), but still better than any savings or CD rates. And since these are long term investments, then time should allow them the stock price to rise as well. We'll see.

I'm a lot more comfortable doing this than investing in bond funds. Bond funds scare me for some reason. Maybe I don't understand the real risk and how to analyze how much risk a particular bond fund is carrying. That scares me.

Tom

[feh]

As part of a well balanced breakfast, I like dividend stocks. I opened an IRA for my wife and I and just buy dividend stocks in them. So far I just have O which returns a nice 4.5% dividend and has also gone up 7% in stock price. So that's a win, win. Plan to add some more later this year. Maybe some PG, KO, JNJ, XOM, MCD or PEP. All long term solid dividend payers. Not in the 10% class (more like 2.5% to 4%), but still better than any savings or CD rates. And since these are long term investments, then time should allow them the stock price to rise as well. We'll see.

I'm a lot more comfortable doing this than investing in bond funds. Bond funds scare me for some reason. Maybe I don't understand the real risk and how to analyze how much risk a particular bond fund is carrying. That scares me.

Tom

I suggest you do some reading Tom - individual stocks are much, much riskier than bond funds.

[corn18]

I suggest you do some reading Tom - individual stocks are much, much riskier than bond funds.

Why is that?

[feh]

Why is that?

Are you asking why individual stocks are more risky than bond funds? If so, that's why I suggested you do some reading; this is an investing tenet.

[corn18]

Are you asking why individual stocks are more risky than bond funds? If so, that's why I suggested you do some reading; this is an investing tenet.

I will do that.

[moneysma]

Glad you were able to find something that worked for you. For me, I just invest in a diversified portfolio of low cost mutual funds and ETFs. I invest on a monthly basis and ignore what the market is doing on a day-to-day basis since it has little effect on me. I am of the belief that you buy and hold for the long term.

So far, it's been working great for me.

[Retired To Win]

I suggest you do some reading Tom - individual stocks are much, much riskier than bond funds.

Very true. But the opportunity for profit is also much much greater than with bond funds. I mean, what is a bond fund returning nowadays? The average dividend yield of my 20-stock portfolio is 8%. Not to mention the more-than-occassional profitable stock sale.

How I describe my investing approach should tell you a lot: High-Yield, High-Risk Investing. (You can't really have one without the other.)

[rennigade]

Ever hear the saying..."if a cross fit person does a cross fit workout and doesnt tell someone about it...did it actually happen?" The reason being is that people who use cross fit as exercise are obsessed with talking about their workouts. Same can be said for runners...especially those marathon runners.

I feel the same way about OP...if they post to a thread and leave out the part about their savings blog...did it actually happen?

[Tabs]

lol crossfit

[corn18]

Ever hear the saying..."if a cross fit person does a cross fit workout and doesnt tell someone about it...did it actually happen?" The reason being is that people who use cross fit as exercise are obsessed with talking about their workouts. Same can be said for runners...especially those marathon runners.

I feel the same way about OP...if they post to a thread and leave out the part about their savings blog...did it actually happen?

^This. An annoying aspect of these fora to be sure. Sometimes it seems the only reason they reply is to reference their blog.

[rennigade]

lol...post #25...Last edited by Retired To Win : Yesterday at 10:38 AM.

I like how they took the part out about referring users to their blog in the main body on the message. Nice work.


Moderators...users here should be unable to persuade people to click on their blogs. Links in the signature are one thing...thats fine. But when you have members saying stuff like "so and so is a great investment...I go into much more detail in my blog, etc etc." That needs to stop. Whatever needs to be said should be said in the posts here at savingadvice. Maybe those users could take the extra 15 seconds and copy/paste what they said in their blog to here. Simple as that.

[doingitallwrong]

I don't get it. If you don't like what the OP posts (and you clearly don't, as you seem to complain every time you respond to one of his threads), just don't read his posts.

You do realize the blog in question is here at SA, right?

I agree that posts saying "hey, I have this great investment, go read my blog for more information" is inappropriate. In this case, the question was about investing in dividend stocks. The OP's process for choosing those dividend stocks, when to sell them, etc., is related but not relevant to that discussion. A side note -- "I've been investing in dividend stocks and doing well. (If you're interested in the specifics of my plan, details are in my blog.) Is anyone else investing in dividend stocks?" -- seems perfectly appropriate to me. The blog post itself is quite long and since it's not necessary information for the discussion itself, copying/pasting it here would seem out of place.