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rated:
Lol, while I'm all for avoiding taxes when possible, I'm not sure I'd completely avoid something with a 10% dividend just because I knew I'd have to pay some of that back in cap gains. Next you'll try to say that wealthy New Yorkers actually did move away to avoid paying NY taxes.

rated:
psychtobe said:   Why would I want dividend paying stocks? I have to pay *taxes* on dem nasty things!

Not in a Roth IRA, 401K, Keogh, etc.
Not if it is return on cap set up.

Besides, paying 20% div tax on >4% is better than pay "almost no taxes" on 0.001% interest rate at savings bank, or your tax rate for 2% 20-yr treasury bill, etc.

rated:
and compared to non-dividend paying stocks?

a dividend stock based approach to investing does not have a higher return beyond the value premium, which can be obtained more tax efficiently without the dividends.

rated:
TravelerMSY said:   Why is there interest in the explicit yield rather than the earnings yield of the underlying business? BRK.A for example grows book value 10-12% per year, but pays no dividend. Assuming long-term gains, the taxation would be the same if you just sold a few shares each year rather than receiving a dividend.

Or are you guys trying to look for low-vol dividend stocks as a replacement for fixed-income?


Ummm, do you own BRK.A???

rated:
psychtobe said:   and compared to non-dividend paying stocks?

a dividend stock based approach to investing does not have a higher return beyond the value premium, which can be obtained more tax efficiently without the dividends.


I think that for most people, the appeal of dividend stocks is having something come in monthly/quarterly/etc., similar to an income. Nobody likes selling shares of stocks, even if the end result is the same (more $ in the account to pay for groceries/rent). I think there's nothing wrong with some dividend plays and some traditional value plays (sp500 index, total bond, etc).

rated:
mrpresidentusa said:   
Thanks for covered call plan!


By the way, just for fun and grins, here is the analysis for TWC.

Fri price: 86.39
Jan 2014 $87.50 call: 5.15
Dividends expected before Jan 2014 call expiration:

2/26/2013, 5/2013, 8/2013, 11/2013: 0.65 each

So net investment: $86.39-$5.15 = $81.24
Total expected return: 87.50-81.24+0.65*4 = $8.86

% return: Around 11% for 11 month investment. And note that you got a downside protection while doing this.

If you want to goose your return, you would sell the Jan 14 $90 strike price option - more appreciation. If you want more safety, go for $85 strike option.

Disclosure: As I mentioned in my earlier post, I own TWC. The purpose of my post here is that you will all go and buy TWC so that it will somehow mysteriously make me rich even though by selling my covered call, I have pretty much locked the most amount of money that I can make on this stock.

rated:
depreshun said:   I like MO, DUK, EQT, COP, EQM, PM and Schwab's SCHD dividend ETF.

EQT dropped its quartertly dividend to $0.03 from $0.88.

rated:
INB or GLY

rated:
mrpresidentusa said:   prastogi said:   chedv said:   LNCO - Holds Linn Enegy (LINE) without the hassle of a K1.

second this one - buy on dips - good divi


LINE and LNCO dropped quickly last week, but then announced a buyout which replenished their source for their high dividend! The stock shot right back up!


http://seekingalpha.com/article/1220681-7-53-dividend-payer-linn...

rated:
PrincipalMember said:   mrpresidentusa said:   
Thanks for covered call plan!


By the way, just for fun and grins, here is the analysis for TWC.

Fri price: 86.39
Jan 2014 $87.50 call: 5.15
Dividends expected before Jan 2014 call expiration:

2/26/2013, 5/2013, 8/2013, 11/2013: 0.65 each

So net investment: $86.39-$5.15 = $81.24
Total expected return: 87.50-81.24+0.65*4 = $8.86

% return: Around 11% for 11 month investment. And note that you got a downside protection while doing this.

If you want to goose your return, you would sell the Jan 14 $90 strike price option - more appreciation. If you want more safety, go for $85 strike option.

Disclosure: As I mentioned in my earlier post, I own TWC. The purpose of my post here is that you will all go and buy TWC so that it will somehow mysteriously make me rich even though by selling my covered call, I have pretty much locked the most amount of money that I can make on this stock.


Do you worry about EPS announcement dates causing substantial movements (either direction) way before the options expir date? Would you rather pick just one quarter away options? Or even just the front month option?

rated:
mickcris said:   depreshun said:   I like MO, DUK, EQT, COP, EQM, PM and Schwab's SCHD dividend ETF.

EQT dropped its quartertly dividend to $0.03 from $0.88.




Sorry... I have EQM not EQT (Not even sure why I listed them in my original list. Probably due to EQM's name. I do know EQT is their parent company.).... Do you think EQM will follow suit? It has been on a steady upward climb for me lately.

rated:
mrpresidentusa said:   

Do you worry about EPS announcement dates causing substantial movements (either direction) way before the options expir date? Would you rather pick just one quarter away options? Or even just the front month option?


Well to start with, we already picked something that was down 10-12% from the peak and that typically happens due to bad/flat earnings. What you expect is that things improve over a year versus more yo-yo stuff on a quarterly basis. It is hard to time stuff to EPS date if you are going for long term options. But as you probably saw from TWC example, I was not expecting much from the appreciation in order to hit my 11%.

Being a year out does several things for me:

(1) Gives me a big enough premium up front and hence more capability to absorb the bad news
(2) Reduces commissions/spreads impact
(3) If stock exercised early for dividend, I only lose 1 of 4 dividends instead of 1 of 1 dividend,
(4) Depends upon how much energy you want to invest in the market. I really have a large sum that I am investing - so options expiring every 3 months creates problems in finding good replacement stocks when the option is excercised in 3 months. So this way, I can make a transaction and sit tight for almost a year (except when I have to intervene for a couple of the securities). [Theoretically, the short term options (if called), have a very high rate of return - but then your investment focus has shifted from saftey+gain to speculation.
(5) Somewhere near the June timeframe, I will start going for 1.5 year calls (Jan 2015). All principles as above + focus on making the gains to be taxed at long term rates.

rated:
Bought into TEF while the dividend was on shaky ground. Hanging around until it returns later this year.

Fan of: INTC, COP, T. VOD, MSFT, BP

rated:
NET1 said:   Bought into TEF while the dividend was on shaky ground. Hanging around until it returns later this year.

Fan of: INTC, COP, T. VOD, MSFT, BP


I own INTC, COP, T, VOD, and BP. Owned TEF about two years ago but sold it. Owned MSFT months ago, but lost it as calls got assigned. May buy back in at some point.

rated:
depreshun said:   mickcris said:   depreshun said:   I like MO, DUK, EQT, COP, EQM, PM and Schwab's SCHD dividend ETF.

EQT dropped its quartertly dividend to $0.03 from $0.88.




Sorry... I have EQM not EQT (Not even sure why I listed them in my original list. Probably due to EQM's name. I do know EQT is their parent company.).... Do you think EQM will follow suit? It has been on a steady upward climb for me lately.


Dont know if EQM will follow. I hope the EQT decrease is only temporary as I own some. I could not find any info as to why the did it, only that they did.

I screwed up the number in the previous post. it was 22c quarterly (88c yearly).

rated:
mickcris said:   depreshun said:   mickcris said:   depreshun said:   I like MO, DUK, EQT, COP, EQM, PM and Schwab's SCHD dividend ETF.

EQT dropped its quartertly dividend to $0.03 from $0.88.




Sorry... I have EQM not EQT (Not even sure why I listed them in my original list. Probably due to EQM's name. I do know EQT is their parent company.).... Do you think EQM will follow suit? It has been on a steady upward climb for me lately.


Dont know if EQM will follow. I hope the EQT decrease is only temporary as I own some. I could not find any info as to why the did it, only that they did.

I screwed up the number in the previous post. it was 22c quarterly (88c yearly).




I read somewhere that part of the spinning off of EQM was so EQT could focus on growth. If I find a reference I will post it.

rated:
I like the idea of monthly dividend to give flexability and keep things more liquid if needed without losing the dividend. ARR and PSEC have both been mentioned, still an OK time to jump in those? Looking to just play a little right now, maybe in at $2k each.

rated:
cooldude9919 said:   I like the idea of monthly dividend to give flexability and keep things more liquid if needed without losing the dividend. ARR and PSEC have both been mentioned, still an OK time to jump in those? Looking to just play a little right now, maybe in at $2k each.

Timing the market can be difficult. Nobody can give you the correct answer. Tomorrow the stocks could shoot up meaning you should buy today. Tomorrow the stocks could fall rock a rock, meaning you should have wanted. There is no way to know for sure.

Monthly dividend payers are one strategy, but limit you to a handful of companies. Another strategy is dividend laddering, where you invest in company A that pays dividends in january, april, july, october,invest in company B that pays in february, may, august, november, and company C that pays in march, june, september, and december, so that every month you are always getting a dividend payment. The dividend ladder approach allows you to invest in many more companies.

rated:
Got 100 shares of agnc at 31.60 with the drop due to new shares. Seems to always bounce back up after this, so with the dividend comming up next month, seems like a decent entry point?

rated:
PSEC has been killing it for me

rated:
psychtobe said:   Why would I want dividend paying stocks? I have to pay *taxes* on dem nasty things!

Yes but not in a Roth IRA, a Coverdell ISA, etc.

I have:
TWO, a REIT (17.57%)
PETDX a REIT mutual fund (17.58%)
PGHZX, a high-yield mutual fund (7.45%)
VZ (4.44%)
WIN (11.92%)
JNJ (6.27%)
PFE (6.03)


and several other medical companies like BMY, Teva, AMGN that pay low to mid 2% in addition to share price increases.

My question would be why WOULDN"T you pay high-dividend yeilding stocks and mutual funds in tax-sheltered accounts.

rated:
ls20 said:   PSEC has been killing it for me

this just got downgraded on Monday.

Second Opinion Weekly - PROSPECT CAPITAL (PSEC)
Exchange: NMS
Close as of week ending
02/22/2013


Opinion
NEUTRAL FROM LONG

Date Opinion Formed
2/25/2013
Price Opinion Formed
11.23

Score
-2
C-Rate
0.0
DOWNGRADED

Recommendation
Stock shows Mildly Deteriorating Conditions. SCORE = -2
If you are long, hold current position. Do not initiate new position.
Stock is Not a Short Sell Candidate.

Comment
Moving Average Convergence/Divergence (MACD) indicates a Bearish Trend.
Chart pattern indicates a Possible Trend Reversal.
Relative Strength is Bearish.
Up/Down volume pattern indicates that the stock is under Distribution.
The 50 day Moving Average is rising which is Bullish.
The 200 day Moving Average is rising which is Bullish.
Price is under Support of 11.44 which is Bearish.

rated:
What are the thoughts of KRFT? Shouldn't they be considered part of this discussion?

rated:
I like closed end funds that pay dividends. A closed end fund is similar to a mutual fund, but issues only a fixed number of shares, which trade on the market and can go up or down independent of the net asset value. A good number of them trade at a discount to the NAV, so essentially you are getting asserts for free.

Check out Adams Express ADX. Has paid a regular dividend since 1929, has extremely low expenses, and its board has declared it's intention to pay a consistent 6% or higher dividend.

rated:
bigdinkel said:   What are the thoughts of KRFT? Shouldn't they be considered part of this discussion?

Yes. It is on my watch list.

rated:
This is $.02 advice on investment.

First, decide your life style;
Full time vs part time vs no time...

If you don't do it full time, buy ETF(ie. SPY or DIY or QQQ...) when there is a CRUSH and everyone is panic.

If you do it full time, my only advice is
NOT making money is much better than losing money.
Making some money is much better than NOT making money or losing money.
Making lots of money is much better than making some money or NOT making money or losing money.
Don't worry about tax until you make money(DO file loss, so you can claim deduction in the future.)

rated:
Dividend stocks are nice - but just like every stock in the world -- you need to buy at a good price. Otherwise your stocks will under perform. As a class, and speaking in general terms, a stock that pays dividends is going to be less risky than a stock that pays none. I tend to favor dividend payers simply because it weeds out shaky businesses with shaky cash flows that are built on hype and lies. To pay a dividend, you need cash, which means you are making real money -- not just reporting accounting (phantom) profits.

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.

rated:
b16899 said:   This is $.02 advice on investment.

First, decide your life style;
Full time vs part time vs no time...

If you don't do it full time, buy ETF(ie. SPY or DIY or QQQ...) when there is a CRUSH and everyone is panic.

If you do it full time, my only advice is
NOT making money is much better than losing money.
Making some money is much better than NOT making money or losing money.
Making lots of money is much better than making some money or NOT making money or losing money.
Don't worry about tax until you make money(DO file loss, so you can claim deduction in the future.)


ETFs certainly have their uses (watch the expense ratios, though).

For many of us, buying individual stocks is both fun and profitable. Fun because you get to own a small part if a company you might be familiar with or already a customer of. Profitable because some dividend stocks still treat their shareholders like owners and focus on treating them real well. Look for companies where the CEO owns a lot of stock in the company yet collects little or no salary. You know the CEOs interest is aligned with the stockholders in a company like that.

rated:
whodini said:   

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.


Why is it so important to beat the S&P 500? Some people keep money in Ally bank - 100% safety and only guaranteed to give you less than 1% - well below the S&P average by a huge %. And there is a wide range of things that you can do between the 1% and the S&P return while dialing the risk/reward to your preference.

And why do you have beat it on a consistent basis? By the way, the Converse is true too - even S&P 500 can't beat "keep the money in the ally bank" on a consistent basis. So given that S&P 500 can't beat Ally Bank on a consistent basis, keeping money in Ally Bank must be a better strategy!

rated:
PrincipalMember said:   whodini said:   

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.


Why is it so important to beat the S&P 500? Some people keep money in Ally bank - 100% safety and only guaranteed to give you less than 1% - well below the S&P average by a huge %. And there is a wide range of things that you can do between the 1% and the S&P return while dialing the risk/reward to your preference.

And why do you have beat it on a consistent basis? By the way, the Converse is true too - even S&P 500 can't beat "keep the money in the ally bank" on a consistent basis. So given that S&P 500 can't beat Ally Bank on a consistent basis, keeping money in Ally Bank must be a better strategy!


The reason it's important to beat the S&P 500 is because there's no point in owning individual stocks if you can't beat the S&P. If you can't beat it, you're just better off buying an index fund and letting it ride.

rated:
PrincipalMember said:   whodini said:   

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.


Why is it so important to beat the S&P 500? Some people keep money in Ally bank - 100% safety and only guaranteed to give you less than 1% - well below the S&P average by a huge %. And there is a wide range of things that you can do between the 1% and the S&P return while dialing the risk/reward to your preference.

And why do you have beat it on a consistent basis? By the way, the Converse is true too - even S&P 500 can't beat "keep the money in the ally bank" on a consistent basis. So given that S&P 500 can't beat Ally Bank on a consistent basis, keeping money in Ally Bank must be a better strategy!


double post

rated:
cooldude9919 said:   Got 100 shares of agnc at 31.60 with the drop due to new shares. Seems to always bounce back up after this, so with the dividend comming up next month, seems like a decent entry point?

My thinking as well.

rated:
b16899 said:   This is $.02 advice on investment.

First, decide your life style;
Full time vs part time vs no time...

If you don't do it full time, buy ETF(ie. SPY or DIY or QQQ...) when there is a CRUSH and everyone is panic.

If you do it full time, my only advice is
NOT making money is much better than losing money.
Making some money is much better than NOT making money or losing money.
Making lots of money is much better than making some money or NOT making money or losing money.
Don't worry about tax until you make money(DO file loss, so you can claim deduction in the future.)


great idea,
....if you know for how long people are going to continue to panic

rated:
What do you guys think of convertible preferred bank yields? I read about the 5% Wells Fargo and 6% Bank of America yield in this article.
http://www.forbes.com/sites/investor/2013/02/13/7-reliable-incom...

Sounds safe for good yield but I'm not sure about the drawbacks.

I am liking AGNC as well. O, Gov and HCN Reits are what I'm currently tracking.

rated:
SaulHudson said:   TravelerMSY said:   Why is there interest in the explicit yield rather than the earnings yield of the underlying business? BRK.A for example grows book value 10-12% per year, but pays no dividend. Assuming long-term gains, the taxation would be the same if you just sold a few shares each year rather than receiving a dividend.

Or are you guys trying to look for low-vol dividend stocks as a replacement for fixed-income?


Ummm, do you own BRK.A???


BRK.B

rated:
SaulHudson said:   PrincipalMember said:   whodini said:   

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.


Why is it so important to beat the S&P 500? Some people keep money in Ally bank - 100% safety and only guaranteed to give you less than 1% - well below the S&P average by a huge %. And there is a wide range of things that you can do between the 1% and the S&P return while dialing the risk/reward to your preference.

And why do you have beat it on a consistent basis? By the way, the Converse is true too - even S&P 500 can't beat "keep the money in the ally bank" on a consistent basis. So given that S&P 500 can't beat Ally Bank on a consistent basis, keeping money in Ally Bank must be a better strategy!


The reason it's important to beat the S&P 500 is because there's no point in owning individual stocks if you can't beat the S&P. If you can't beat it, you're just better off buying an index fund and letting it ride.


You missed the whole point that I was trying to make about "preservation of principal". As an example, somebody can buy an S&P index fund and buy puts on the S&P. That strategy could lead to lower gains than S&P when the S&P is going up but that is fine with people who are trying to preserve the principal. You have a lot to learn about "managing risk" / calls / puts.

rated:
PrincipalMember said:   SaulHudson said:   PrincipalMember said:   whodini said:   

That said - it's quite difficult to beat the S&P 500 Index on a consistent basis-- whatever strategy one follows --- adjusted for risk.


Why is it so important to beat the S&P 500? Some people keep money in Ally bank - 100% safety and only guaranteed to give you less than 1% - well below the S&P average by a huge %. And there is a wide range of things that you can do between the 1% and the S&P return while dialing the risk/reward to your preference.

And why do you have beat it on a consistent basis? By the way, the Converse is true too - even S&P 500 can't beat "keep the money in the ally bank" on a consistent basis. So given that S&P 500 can't beat Ally Bank on a consistent basis, keeping money in Ally Bank must be a better strategy!


The reason it's important to beat the S&P 500 is because there's no point in owning individual stocks if you can't beat the S&P. If you can't beat it, you're just better off buying an index fund and letting it ride.


You missed the whole point that I was trying to make about "preservation of principal". As an example, somebody can buy an S&P index fund and buy puts on the S&P. That strategy could lead to lower gains than S&P when the S&P is going up but that is fine with people who are trying to preserve the principal. You have a lot to learn about "managing risk" / calls / puts.


I have a lot to learn about risk/calls/puts??? All I did was answer a generic question about why people want to beat the S&P. I agree there are tons of risk/reward options between 0 and S&P. I didn't comment on any of those.

rated:
TravelerMSY said:   SaulHudson said:   TravelerMSY said:   Why is there interest in the explicit yield rather than the earnings yield of the underlying business? BRK.A for example grows book value 10-12% per year, but pays no dividend. Assuming long-term gains, the taxation would be the same if you just sold a few shares each year rather than receiving a dividend.

Or are you guys trying to look for low-vol dividend stocks as a replacement for fixed-income?


Ummm, do you own BRK.A???


BRK.B


I have BRK.B on my watch list. The only thing that keeps me from buying it is that I'm worried the stock is going to take a huge hit (justified or not) when Buffett dies. He is 82 and Munger is 89. For now, I just watch the stuff he buys and follow along.

rated:
I'm lightening up the load on it. He's so big now it's hard to generate outsized returns anymore.

Might be a good play to buy it cheap on the news of his death.

rated:
TravelerMSY said:   I'm lightening up the load on it. He's so big now it's hard to generate outsized returns anymore.

Might be a good play to buy it cheap on the news of his death.


That is the other thing that keeps me from away BRK.B too. Forgot to mention that one. It is a real problem going forward for them. They're too big to succeed.

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