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Individual stock dividend investing

So, my good buddies.  I'm curious.  I've been in the 2X leveraged ETN, SDYL, since last year, whenever I sold all of my individual mostly divey growth stocks and bought the note based upon SDY, which is the ETF invested in the 20 year divey aristrocrats within the total stock market index, the S&P1500, above a minimum market cap.  I also moved from an all stock portfolio to roughly 60/40, where my 'bond' allocation was 50/50 PCI and PFFL.  PFFL, in turn, is the UBS note based upon a 50/50 allocation to the two preferred stock ETFs, PGH and PFF.  My fourth portfolio pillar was MRRL, the UBS note based upon MREIT land, where the biggest component of the index is Annaly Capital, NLY.

Fast forward to today.  Most of the UBS leveraged ETNs have triggered a mandatory redemption, including one that I hold, MRRL.  PFFL, trading fairly close to its Indicative Value of $25, pinged against the mandatory redemption trigger, $5/unit, on Wednesday and has since recovered back to $10.  PCI dropped from $25 to $15 this month.  SDYL is down from $100 to $50.  I won't know until mid April how April distributions will compare to last April.

So, how have your portfolios done this year?  I see some of my former individual holdings down 50% or more YTD.  I see Boeing down below $100/share.  I see NLY trading at an all time low, below $6, yielding 19%, declaring its regular divey on Monday, going ex-div at the end of March.  I see BXMT, Blackstone, and ATAX, America First Family, down 50%, with no announced divey cuts, hence divey yields doubled.  SDY itself is down 25% YTD, about the same as SPY, while SDYL is down 50%, as expected.

Have your individual holdings gone down, YTD, as markets in general?  What about your PFDs?  I'm just curious.

(BTW, the 'new' MLPQ suffered the same fate as the 'late' MLPL.  Luckily, I haven't been in MLPs since going to my leveraged notes last year.  I guess we now have to 'suffer' 2X blathering from certain posters, going forward!) 8-))

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Re: Individual stock dividend investing


@ElLobo wrote:

1. I also moved from an all stock portfolio to roughly 60/40, where my 'bond' allocation was 50/50 PCI and PFFL. 

2. I won't know until mid April how April distributions will compare to last April.

3. I see BXMT, Blackstone, and ATAX, America First Family, down 50%, with no announced divey cuts, hence divey yields doubled.

4. I guess we now have to 'suffer' 2X blathering from certain posters, going forward!) 8-))


Just some comments regarding the above...

1.  I won't speak to PFFL, but PCI is levered and behaves more like equity.  Consequently, one has to appreciate that your portfolio performs as if it held much more equity than a traditional 60/40 (I know because I  own PCI).

2.  Regardless of the stated distribution, it CAN change at any time, and one has to hope that the figure the company chooses is actually justified, but they may ultimately do whatever they want with it.

3. "Divey yields" doubled if you were buying it TODAY.  PLUS, see 2) above.  All that means is that you have less capital at risk, and the figure they chose (perhaps arbitrarily) requires that investment to actually GENERATE that increased yield in order to break even.  You aren't being gifted, you are being given a task to accomplish.

4. If by "blathering" you mean the warnings given to YOU about the chances you were taking with your actions, and your irresponsible encouragement of others to do the same, said warnings now shown to be both valid and timely, then yes, you're probably going to be reminded of those unfortunate occurrences.

There's nothing wrong with investing in things which distribute income.  The problem lies in the stuff YOU post; which is misleading at best.

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Explorer ○○○

Re: Individual stock dividend investing

Regarding #4 - I sincerely hope the board doesn't go down that road no matter how richly deserved. One B/B is nauseous enough and already way more than I can stand and I really wish she/he/it would go away.

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Re: Individual stock dividend investing

"1. I won't speak to PFFL, but PCI is levered and behaves more like equity. Consequently, one has to appreciate that your portfolio performs as if it held much more equity than a traditional 60/40 (I know because I own PCI)."

Both are leveraged.  PFFL behaves like equity because it is equity, preferred stock, which most treat as debt in their asset allocation.

"and your irresponsible encouragement of others to do the same,"

I never encouraged ANYONE to do what I do.  I explain what I do and why. Nothing more nothing less.  I don't mislead.  Still, I'm curious as to how others on the D&I forum fared this month.

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Re: Individual stock dividend investing


@stormy wrote:

Regarding #4 - I sincerely hope the board doesn't go down that road no matter how richly deserved. One B/B is nauseous enough and already way more than I can stand and I really wish she/he/it would go away.


Methinks we are talking about the same trolls!  8-))

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Explorer ○○

Re: Individual stock dividend investing

I really do not know how I am doing?

So far in 2020 I have bought DUK two times. T three times, CNP 3 times,WTR once, CAH once, PCI 2 times, PDI 3 times,JPM once, WRK  once and KMI once. Did Roth conversion on $1000 cash, 

100 shares HON, all EMR and MMM. All of this and its not end of march yet!!

Crew thinning 30 acres of timber at this time so more money coming. May get my pastor to hold it for me so I will not put it in stock market! :)  On other hand might be safer to put it in saving account with having two to sign to get it out! :) :)

Got lots of bourbon  and T. paper so ready for anything. :)

Copie

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Valued Contributor

Re: Individual stock dividend investing


@ElLobo wrote:

(BTW, the 'new' MLPQ suffered the same fate as the 'late' MLPL.  Luckily, I haven't been in MLPs since going to my leveraged notes last year.  I guess we now have to 'suffer' 2X blathering from certain posters, going forward!) 8-))


 

 I find it interesting that back in 2015 when I and another poster tried to warn you about using 2X products in a retirement portfolio you referred to the warnings as blathering. That year MLPL, the recommendation you brought to the I&D forum went from $75 to $12 and was mandatorily redeemed. Many members suffered big % losses in a matter of months.

 Even after that experience, you posted you had invested in another 2X ETN MLPQ, no longer available since it also closed down.locking in losses for investors.

 Again you post you bought another 2X ETN which just recently went bust, MRRL.

 What you considered blatherings would have been very beneficial information for you to heed. Not sure if any of your 2X products will survive but my advice remains the same..........Stay away from 2X ETNs, especially in a retirement portfolio!

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Re: Individual stock dividend investing

          copie - your the man, you always do it right. It’s really that simple. Southern Comfort for me. Sometimes Johnny Walker Blue. Raised to plan for the worst and hope for the best so we have enough TP also. The kids are already using both sides. Who’s laughing now.

           El - in a 10 year bull market I took profits from plenty of irrationally valued stocks and stashed them along with excess CEF yield. No crying from me.

           As an aside novel viruses usually subside in about 3 months as is evidenced already in several countries most notably China. We should be able to see the light by July.

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Explorer ○○○

Re: Individual stock dividend investing

The last I looked my total PF was down about 20% but may be worse today.

I recently cashed 1 of 2 CDs from Ally that I've had for 2 years paying 2%. Recent buys include 100sh UTX @ $72.20 on 3/19(which believe or not I sold 100sh on 3/2 @ $131.50)

Bought XOM twice. Once @ $52.25(oops) and once @ $34.20. 200sh of WFC @ $26.87. 200sh XLC @ $50.76(poor div but you gotta mix it up a little)

I had some limit orders in for KMI(taxable & IRA) and they may have filled yesterday. I still have a little cash left to play with. 

As far as being a troll to ElLobo and his ETNs I'll say this. I've had my ass handed to me more than a few times in individual stocks over the years but it's never been 25% of my portfolio.(MRRL) You mentioned me in another post and said that you new what you were doing in regards to ETNs. If that's true then I should think that with your extraordinary math skills you should easily be able to figure out how much your last payment is going to be and how much you "redemption" will be by simply reading the prospectus(which I'm sure you did).

"the peasants were unhappy with their redemption"

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Explorer ○

Re: Individual stock dividend investing

This is the ultimate test for the dividend investor.

1. Can you ignore the loss in paper net worth and focus on the fact your income (dividend) did not change?

2. Can you be brave and buy good companies with solid outlooks and long term dividend prospects when they are on sale (i.e KO paying near 4%)?

3. Can you emerge from this with a higher income than when it started?

If you answer yes to all three than you are a Dividend Income Investor.  Congratulations. 

 

 

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Re: Individual stock dividend investing


@GreenMnt1 wrote:

This is the ultimate test for the dividend investor.

1. Can you ignore the loss in paper net worth and focus on the fact your income (dividend) did not change?

2. Can you be brave and buy good companies with solid outlooks and long term dividend prospects when they are on sale (i.e KO paying near 4%)?

3. Can you emerge from this with a higher income than when it started?

If you answer yes to all three than you are a Dividend Income Investor.  Congratulations. 

 

 The way I am looking at it, with the current prices on stocks like KO, PFE, MMM and others, it may be possible to be both a dividend and a growth investor. Perhaps the best of both worlds.

Look at all the hedge fund guys who were the smartest guy in the room...until they weren't. Reminds me of all the guys driving around in leased BMW SUVs and are 30 days away from bankruptcy, while I am driving an 11 year old Ford, that I bought used.

 

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Re: Individual stock dividend investing

I'm with ya brother.  Also bought PFE yesterday.

 

 

 

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Re: Individual stock dividend investing

"As far as being a troll to ElLobo and his ETNs I'll say this."

Twasn't you I was talking about, fish!  8-))

"I've had my ass handed to me more than a few times in individual stocks over the years but it's never been 25% of my portfolio."

Hence this thread!  Several regulars hold all individual divey stock portfolios, 20 to 50 individual holdings, as I recall.  How much did your total portfolio STOCK value tank YTD?  Up through last year, my portfolio typically held 20-25 individual high yield stocks, as I've posted for 2 decades now  Whenever I went to 2 stock, 1 preferred stock, and one bond high yield ETNs, my portfolio became way more diversified, although concentrated in high yield sectors.

"You mentioned me in another post and said that you new what you were doing in regards to ETNs. . . . . ."

Don't start trolling me, fish.  This thread isn't about what I do/did, it's about other divey growth investors recent experiences.  Lessons learned, IOW.  Ifn you really want my views on 2X leveraged ETNs and how they function, please start a new thread!  8-)

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Explorer ○○

Re: Individual stock dividend investing

I learned a lot from my mother. She always said do not use 4 letter words, Bond and sell are the two worst (IMO) words to use!  :)

When I buy one of my so called income stocks I buy it with the ideal of the dividend being cut in half. Stock I am adding now: CNP  yielding over 9%. Ele. and gas ulit. If they hold at present amount it will be alright and if they cut it less then half then I can live with that. 4.5% is not bad with what CD's and bonds are giving.

My old plan is same. Buy small amounts each month on way down, at the bottom and on way back up. 2007-2009  scared me a lot more then now and I used the same old plan. You cut and bail hay in dry weather not when it raining. IMO its time to bail some hay! :)

Copie

Copie

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Re: Individual stock dividend investing


@copie wrote:

I learned a lot from my mother. She always said do not use 4 letter words, Bond and sell are the two worst (IMO) words to use!  :)

When I buy one of my so called income stocks I buy it with the ideal of the dividend being cut in half. Stock I am adding now: CNP  yielding over 9%. Ele. and gas ulit. If they hold at present amount it will be alright and if they cut it less then half then I can live with that. 4.5% is not bad with what CD's and bonds are giving.

My old plan is same. Buy small amounts each month on way down, at the bottom and on way back up. 2007-2009  scared me a lot more then now and I used the same old plan. You cut and bail hay in dry weather not when it raining. IMO its time to bail some hay! :)

Copie

Copie


I wouldn't label myself a "divie investor", but I try and be flexible and I could not agree more at this time particularly. I agree with every single point. Though hay makes me sneeze!

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Re: Individual stock dividend investing


@DrVenture wrote:

@GreenMnt1 wrote:

This is the ultimate test for the dividend investor.

1. Can you ignore the loss in paper net worth and focus on the fact your income (dividend) did not change?

2. Can you be brave and buy good companies with solid outlooks and long term dividend prospects when they are on sale (i.e KO paying near 4%)?

3. Can you emerge from this with a higher income than when it started?

If you answer yes to all three than you are a Dividend Income Investor.  Congratulations. 

 

 The way I am looking at it, with the current prices on stocks like KO, PFE, MMM and others, it may be possible to be both a dividend and a growth investor. Perhaps the best of both worlds.

Look at all the hedge fund guys who were the smartest guy in the room...until they weren't. Reminds me of all the guys driving around in leased BMW SUVs and are 30 days away from bankruptcy, while I am driving an 11 year old Ford, that I bought used.

 


It's very easy to be a divey growth investor, going forward.  This post is about how divey growth investors, especially retirees, fared so far this year?  Hindsight is way more than 20/20!  8-))

At the beginning of 2019, 15 months ago, Boeing was considered a pillar of corporate America, responsible, according to some estimates, for 0.5% of our GDP.  They had a new plane coming out, the B737MAX, which they 'developed'  in an almost record cost and schedule manner by tweeking the design of the 737, which the company had sold over 10,000 multi-million dollar price tag planes over the last few decades.

The company has been in business for over a century and lived through troubled times.  The first one moving back to Seattle turned the lights back on.  Although not a high yield long term divey growth stock, their 2.2% divey was solid, 0.75% more than the efficient market.  I never held it, even whenever working for the company.  Too much risk.

Two unfortunate plane crashes and a virus later, this 8 year divey aristrocrat suspended their divey yesterday, their stock has tanked 71% YTD and is expected to tank, again, on Monday.  My 2X leveraged divey growth ETN, SDYL, is down 'only' 60% YTD.  I'll find out in about 3 weeks whether its normal 5.6% distribution will be cut.  I expect so, given what I know about how ETNs work.  The question is by how much.  SDYL doesn't hold BA.  It holds only 20 year aristrocrats above a certain minimum market cap.

The cut shouldn't happen in April, BTW.  April's distribution is already baked into the cake, representing diveys earned by the note THIS month.  But we'll see.

So let's assume that, because of the way 2X leveraged ETNs work, the distribution itself is cut 50% whenever the note price goes down 50% (the underlying index goes down 25%), all as a result of the monthly resetting of the leverage.  In my case, my total portfolio cash flow was a bit over twice what I withdrew and spent, so, going forward, my 2X leveraged portfolio should still generate a bit more cash flow than what I need to cover my retirement withdrawals.

My retirement 'Plan B' is to cut back my retirement withdawals a bit to a level no more than the portfolio cash flow, going forward.  My 'Plan C' is to start spending down my capital.  Whenever the market comes roaring back, I should be able to spend some of that total return.  My 'Plan AA' is to start saving up my excess seed corn for rainy days, and bottom fishing, going forward.  That is the one thing I regret not doing, against the sound advice of the Duckster, Bruce, many moons and threads here ago!

SO, in terms of THIS thread, I'm wondering if the individual stock investors on THIS forum saw the STOCK portion of their portfolios tank this year..  My guess is a definite yes.  The question is whether it's more, or less, than 50%, or twice the efficient market average.  I don't care about the bond, or cash, portions, or your total portfolio values, just your stocks.

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Re: Individual stock dividend investing

@ElLobo 

Right, I did digress. Wasn't sure what the past had to do with this, to be fair. I bought much of my dividend stocks as far back as 35 years ago. I actually have a tranche of T that evolved from a $600 basis in 1981. I bought more dividend stocks in 2000 and another batch in 2008/2009 and I bought some on 2/11/2016. I remember, because it turned out to be the absolute bottom of that minor "correction". But, it only made up about 8% of my total portfolio, until last week. I have now more than doubled it.

In my case, the answer to your question, is "no regerts", like the tattoo!

In specific terms my original dividend portfolio is down about 25% YTD. A no-brainer though, the cap gains would have killed me had I sold.

And the 10-yr annual return on that portfolio is likely well over 10%, as most those issues were bought at highly opportune moments. I have HD in there that I bought at $22.

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Re: Individual stock dividend investing

If your question was how are we doing......

So far in 2020 I have had no dividend cuts, and am on track to make 7% more income this year than last year.  Of course this can change if dividends are cut in any of my holdings. 

My rule is no individual stock greater than 2% of my portfolio, no ETF/Fund greater than 5%. 

I'm sure the paper value of my portfolio value is down double digits but as noted that's not something I pay attention to very much (see my note above).  

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Re: Individual stock dividend investing


@GreenMnt1 wrote:

If your question was how are we doing......

So far in 2020 I have had no dividend cuts, and am on track to make 7% more income this year than last year.  Of course this can change if dividends are cut in any of my holdings. 

My rule is no individual stock greater than 2% of my portfolio, no ETF/Fund greater than 5%. 

I'm sure the paper value of my portfolio value is down double digits but as noted that's not something I pay attention to very much (see my note above).  


That's typical for us divey growth investors.  I am mainly curious if typical individual stock portfolios tanked more, or less, than the  25% market tank so far this year.  My 2X leveraged ETN portfolio did, as I expected!  Kinda like a 'cross check'.  Up to last year, I held 20-25 individual high yield stocks, plus a few of the 2X leveraged ETNs, with a 5% and 10% allocation limit.

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Re: Individual stock dividend investing

WELL, YUM, EMR and ALL really pulled down my average, as one might've expected.

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