Welcome to the forum for Dividend Growth Investing discussion on Seeking Alpha. A new article is posted every two weeks as a space for sharing of ideas, discussing concepts, and digging deeper on DGI. All previous blogs are listed in chronological succession on the main chat page.
As promised and with your valued feedback, we are publishing a new version of the article with some changes to make it more engaging. The structure of the article will now include a response from one of you in the community regarding your thoughts on DGI.
If you’d like to share your DGI thoughts with us in future editions, you can email us at [email protected] and let us know. We’ll be looking at continuing to do this moving forward.
For a reminder, you can find our moderation guidelines for this space in our profile. And please share your thoughts below to continue the discussion and learning on DGI.
Featured Comments From Last Edition
wildpitcher had a great question for the group last week in their comment:
Portfolio income = (Current Portfolio Yield) times (Current Portfolio Value)
Is there a particular portfolio yield that you seek in your dividend growth investing? If so, do you have any guidelines for stocks in your portfolio to allow you to meet that overall portfolio yield? If no yield target, what do you do instead?
In my case, I don’t have a particular yield target, but I find that I tend to gravitate to current portfolio yields of 3% to 3.5%. I own individual stocks (not funds) that have yields from zero to over 11%, and my overall portfolio yield is currently 3.17% per SSD. When I make portfolio adjustments, they tend to be incremental, with the result that I tend to stay in that 3%-3.5% band.
How so you do it?
Dave
We’d invite folks to share their thoughts further on this question, and we wanted to highlight Bill L. Bolton’s response from last time as well. Here’s what Bill had to say:
Great discussion starter! My portfolio is based on meeting the income goal that I considered “enough” at the end of 2017. The reason that I believed this to be enough is that I knew from my experience that this income should grow organically at a CAGR of 6%. Through the end of 2023 the actual CAGR was 10.55% – handily beating inflation.
I break the portfolio (comprised of 3 tIRAs) into the following categories and here are the ‘targeted’ percentages of each category and the current yield of that category:
Growth – 13.5% of portfolio – 0.11% current yield
Growth and Income – 21% of portfolio – 0.76% current yield
DGI – 59% of portfolio – 3.68% current yield
Hi-yield – 5.5% of portfolio – 11.68% current yield
Cash (MM) – 1.0% of portfolio – 5.16% current yield
The overall current yield is 2.17%
My wife has RMDs and takes the RMD amount calculated by Fidelity. I don’t have RMDs until 2026 but take a little under 3% from my two accounts currently. I bumped it up a bit to this level a couple months ago to flatten out what my taxes will look like when I do have to take the RMD amounts. Not all of the distributions are getting spent so part has been reinvested in our taxable accounts. I have a business-related tax loss carryforward that ‘helps’ (wow – ironic and I don’t suggest this as a strategy) if I want to sell winners in the taxable accounts. I am buying some of my tried and true (my view) growth stocks in the taxable accounts when they appear to be a value and will later trim a bit in the IRAs. Long term this will keep my RMDs at a level that encounters less taxation.
Most of the tickers remain the same month over month, but I will trim and add based on positions that are well over or well under target size and appear to be of over or undervalued using FastGraphs. The above categorization was implemented about 3 years ago and is doing the job of growing income while keeping pace with SPY.
More on Dividend Growth Investing:
The Cash Trap & Why It Matters When the Fed started hiking rates in 2022, something really interesting happened. Even short-term governments “suddenly” yielded 5%. This makes sense, as the Fed funds rate is a benchmark for short-term interest rates in the United States. Also, investors use bonds to bet on the Fed’s next move, which is why the short-term yield is currently below the Fed funds rate.
In this article I will share my dividend investing strategy, which I aim to devise over next 10 year period in order to achieve a portfolio that generates $50,000 of annual dividend income. Next week I turn 30, and the overall objective is to have a stable, predictable and tangible source of income by the time when I become a 40 year old.
Have you ever heard of the 90/90/90 rule? Essentially, the rule says that 90% of new traders lose 90% of their starting capital within the first 90 days. While it is unknown who came up with this rule, it explains perfectly why Wall Street makes so much money, as most traders are simply providers of liquidity – nothing more, nothing less.
More than three years ago, New Fortress Energy (NFE) acquired Golar LNG Partners in a $1.9 billion transaction that likely saved the debt-laden partnership from a potential bankruptcy filing. Shortly after closing, the partnership decided to delist its 8.75% Series A Cumulative Redeemable Preferred Units (OTC:GMLPF) from Nasdaq.
Broadly speaking, there are 3 things that might impact the profit you make on the house:
1. The appreciation of all houses in your neighborhood. Some places will appreciate at a faster pace than others. Homes in Rockford, Illinois are up 16% year over year. In Raleigh, North Carolina, they are down 2.6% year over year. Over time, this has a big impact.
2. The equity you can infuse into the house: If you build an extension and put in sweat equity for improvements with a greater than 100% ROI, then you can infuse value into the property.
3. The discount to market value you pay when you purchase the house.
Seeking Alpha’s Disclosure
Past performance does not guarantee future results. Content is provided for information purposes only and does not constitute investing advice. Any views or opinions expressed do not reflect those of Seeking Alpha as a whole. Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.
Read the full article here