Wednesday, April 23, 2014

BOOSTED DIVIDEND INCOME NEARLY 30% FOR SECOND QUARTER!

I’ve found one of the problems with sticking to any investment
plan is to avoid distractions.  In my case, I’m always coming
across stocks I think would be great investments and am
tempted to take positions in some of these stocks, but it doesn’t
fit with my current plan.

My plan was to pick 20 dividend paying investments, with a
mix of individual stocks and mutual funds, some quarterly
payers and some monthly payers.  This part of the plan I’ve
completed.  Now I’m in the phase where I’m increasing shares
in each of my holdings through additional cash investments
and re-invested dividends.  The only reason for me to open a
position in a stock not included in my current portfolio would
be if I decided to sell one of my current holdings.  This could
happen if future dividends were endangered for some reason
or if the stock or fund begins what I judge to be an unrelenting
decline for whatever reason.  Then I would sell the shares and
look for a replacement.

My current strategy has been working extremely well, so it’s
not the time to stray from the plan.  While it’s good to be
flexible in investing, if you don’t have a plan, you just end up
spinning your wheels, becoming a trader instead of an investor.
While being a trader is not bad, unless you’re very good at it,
you’re not likely to make much money.  I prefer those dividend
payments rolling in every month over trying to figure out the
next big gain in stocks.  That’s what my plan is all about and
I’ve rededicated myself to stick with the plan.

All that being said, I realized I could boost returns by opening
a position in AOD which increases monthly cash flow by 4%,
beating my 20% goal for the second quarter.  To stick to the
plan and keep my holdings at 20, I’ve decided to sell GE and
re-invest the proceeds in PSEC.  I’m currently sitting on a nice
capital gain from GE which is held in my IRA account, so
selling the shares and re-investing in PSEC, which I also hold
in my IRA account, will not create an immediate taxable event.
I’ll collect the unrealized gains from GE and boost monthly
dividend income an additional 7% per month.  Since 2 of my
mutual funds have GE stock as part of their top ten holdings,
I’ll continue to benefit from future growth in what I believe to
be a great company.  I’ll reduce redundancy in investments,
collect on unrealized gains and boost dividend income.  With
other moves I’ve made in March and April, I’ve boosted
dividend income nearly 30% during the second quarter and I
still have the month of May to go!  May just cool my heals until
June and work on strategies to meet my goal of increasing
income by 20% in the third quarter.  I’ve got a feeling the
market will slow during the summer and may present some
good buying opportunities, so it could be to my advantage to
hold back until then.  It’s all about sticking with the plan.

Saturday, April 19, 2014

TWO PROSPECTS FOR FUTURE INVESTMENT

While reading through the annual reports from some of the funds in my portfolio, it occurred to me that a good source of possible investments would be checking out top 10 holdings in my current funds.  I figure they're in the top ten for a reason, although perhaps not a reason that would make me want to invest.

However, I did come across a couple of likely candidates:

1.  Alpine Total Dynamic Dividend Fund (AOD)  This fund pays a monthly dividend and has an 8.04% yield on their current price of $8.43 per share.  While the yield on this one is a little less than my next pick, I'd prefer the monthly dividends over quarterly payments.

2.  BlackRock Global Opportunities Equity Trust (BOE)  This fund pays its' dividend quarterly with a yield of 8.63% on their recent price of $14.45 per share.  

While it would be necessary for me to do further research before I would replace any of my current investments with one or the other mentioned above, both look like very good prospects.  I'm also partial to the idea of trading in one of my quarterly paying individual stocks for a monthly paying fund, especially one with a much higher yield.  It may seem some redundancy of investing would occur should I take a position in a fund that is already owned as part of one of my current investments, however, redundancies already exist since most of the individual stocks I own are also owned as part of some of my fund investments.  So I wouldn't really be changing much about the makeup of my portfolio, other than adding more diversity and increasing monthly cash flows.  If I trade a quarterly paying stock for a monthly payer, I'll add an additional 8 dividend payments per year. 

Wednesday, April 16, 2014

DIVIDEND INCOME FOR APRIL UP 50% OVER APRIL 2013!

Dividend Income For April Up 50% Over April 2013!

While a 50% increase compared to the same month last year is not as good as I’ve been
seeing, it’s still a fantastic increase!  I expected increases to moderate some as the year
went along, but a preliminary look at the month of May shows a possible increase of over
200% compared to last year.  Now that’s something to get excited about!

Completed the sale of part of my UVE shares from my taxable account, pulling out all my
original cash investment.  I redeployed the cash by purchasing shares of NCZ.  This will
bring the total number of dividend payments per year to 180.  So I’ll be collecting a
dividend nearly every two days!  Monthly cash flow will increase, since NCZ pays
monthly compared to quarterly for UVE.  The remaining shares of UVE I’ll continue to
hold and reinvest the dividends.  I now have half the number of shares in UVE I
originally owned, but I’ve pulled out all of my original cash investment, which means I
have none of my own money invested in the remaining shares.  While I did create a
taxable event and paid some in commissions, the increased income should more than
make up for it.  I’m still long on UVE, just wanted to take advantage of the fantastic gains
I’d made to date and boost monthly cash flows through the purchase of CLM and NCZ
shares.

I’m looking to make at least one additional cash investment to my portfolio before the
end of this quarter.  I only need to boost income by 2% to meet my goal of 20% increases
each quarter of 2014.  I’ll need to figure out a different strategy for the 3rd quarter.  While
I could pull the same move and sell shares in one of my stocks with unrealized gains, I
like the idea of finding more creative ways to boost returns.  Then again, there’s nothing
wrong with taking advantage of all available avenues toward boosting earnings.  So I may
do both.  If I figure out how to boost dividends by 20% and decide to cash in on
unrealized gains, I’ll just me that much more ahead of the game.  The goal is 20% but
there’s no reason I can’t exceed that goal when the opportunity presents itself.  Got to
remember that goals are not limits.

Wednesday, April 9, 2014

ANOTHER FREE STOCK AND ANOTHER DIVIDEND BOOST OF 8%!

Since I hold shares of UVE in my taxable account as well as my
IRA, I decided to use the same strategy I mentioned in my last
post to UVE a “free stock” for my taxable account.  I sold
enough shares to pull out my original cash investment, which
left me with half of the stock I originally held in UVE.  I took
the money from the sale and reinvested it in shares of NCZ.
This will add an additional 12 dividend payments per year for
a total of 180 or an average of 15 dividends per month.
Monthly cash flow from dividends will increase by 8%, which
means I only need to figure out how to boost dividends by
another 2% to meet my goal of boosting income by 20% for the
second quarter.  But I don’t want to stop there.  If I should
reach my goal in the first month of the second quarter, I’ll be
working on boosting dividends another 20% to meet my goal
for the third quarter.

So I have $0 invested in UVE, but I still have half of the shares
I originally purchased.  I’ll continue to draw dividends and
benefit from future share price increases, should there be any.
Monthly cash flow has been boosted by another 18% total and
rate of compounding has increased by adding a total of 24
additional dividend payments per yer.  The new dividends
should both kick in next month.  Doesn’t get much better than
that!

Or does it?  I just compared April’s projected dividends to
January of this year.  Turns out dividend income for the first
month of the second quarter will be up over 30% compared to
the first month of quarter one 2014.  With new dividends
kicking in in May, I’m expecting even better results!

Saturday, April 5, 2014

GAINED FREE STOCK AND BOOSTED MONTHLY DIVIDEND INCOME 10% WITH NO ADDITIONAL CASH!

I've mentioned in earlier posts a strategy I like to use to create what I call "free stock", meaning a stock in which I have none of my own cash invested.  In order to deploy this strategy, you have to have positions in stocks with unrealized gains.  You sell enough shares to recoup your original investment and whatever remains is "free" since none of your money is invested.  This works great with dividend stocks since you can continue drawing dividends on the remaining stock.

My current use of this strategy was with UVE, which I hold in both my IRA and my taxable account.  I was sitting on a gain of nearly 200%, but the price had shown some weakness of late, so I decided to take out my cash and hold on to the remaining stock.  It occurred to me that I could sell one third of the stock and recoup my original cash investment, making the remaining shares free to me.  By taking the cash and re-deploying it in CLM I gained 12 additional dividend payments per year, giving me a total of 168, for an average of 14 dividends per month.  Taking into account reduced dividend income from UVE, the additional income from CLM boosted monthly cash flow by a little over 10%!

So it's pretty much a triple play:  I boosted dividends by 10%, increased the rate of compounding in my portfolio by adding 12 additional dividend payments and my investment in UVE is now free!

Tuesday, April 1, 2014

NO APRIL FOOLS HERE, STARTING THE MONTH OUT RIGHT!

Started the month of April off right with 5 dividend payment on the first of the month.  Collected some decent interest payments from Capital One and my regular savings and checking accounts.  Although interest on savings remains pitifully low, it's better to collect what you can while your money is idle.

Looked at a few new issues, but I haven't found anything to temp me into selling out any of my current positions.  I'm liking the increasing cash flows I have now and would have to find something really good to make in changes in my portfolio.  Just read the annual report from Corning Glass and I'm really liking the actions they've taken in the past year.  I think the investment in the Brazilian telecom was a great idea, hope to see a boost in earnings from that and their Willow glass.  Gorilla glass sales were down due to companies working through current inventories, but demand overall was up 30%, so sales should begin to pick up this year.  I'm still a firm believer in GLW and consider it one of my core holdings.  Would like to see them boost the dividend again this year.

Friday, March 28, 2014

CENTERPOINT ENERGY (CNP) INCREASES DIVIDEND 14.5%!

Collected my first dividend payment from CNP for 2014 and was happy to see they've increased their payout by 14.5%.  According to their annual report, things are going quite well for CenterPoint.  I wrote a post last year about the low interest rates being good for utilities, since they rely heavily on financing for ongoing operations.  Given the Fed has declared interest in keeping rates low for the next few years, I'm still thinking utilities will do well.  Overall return for CNP was 24.7%, beating out the S&P 500 Utilities Index average of just 8.8%.  I've been a long term investor in CNP and I like what I read in their annual report, so I'll most likely continue to hold this stock for quite some time.

With 10% of the stocks in my current portfolio (HBI and CNP) increasing dividend payouts, I'm hopeful of seeing more from some of my other holdings before the year is out.  While dividend income continues to rise each month from ongoing cash investments and reinvested dividends, companies that increase their payouts can add quite dramatically to the rate of compounding over the years, so I'm understandably excited about this.  I've been reading a lot of articles about companies with big stockpiles of cash who are expected to start returning cash to shareholders through dividend increases and stock buybacks, so I'm pretty certain I'll see a least a couple more of my holdings increasing their payouts before the year is over.