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.

Saturday, March 22, 2014

FIRST QUARTER DIVIDEND INCOME FOR 2014 UP OVER 300% COMPARED TO 2013!

Dividend income for the first quarter of 2014 will be more than four times the amount earned in the first quarter of last year, for an increase of a little over 300%!  While I'm as excited as the next person about gains in the stock market, I'm a lot more excited about eh increases in monthly cash flow from dividends from my current investment strategy.  Every time I think the news just can't get any better and the increases will have to start slowing down, it seems there's another jump in earnings.

I read more today about an expected correction in the market and considered diverting some dividends to cash savings.  The idea being to stockpile cash and wait for a better buying opportunity should the correction materialize.  However, I decided to stick with the program and continue reinvesting all dividend payments for the time being.  If the correction should occur, ongoing dividend income will purchase more shares at the lower prices and help reduce average price per share, so I can accomplish the same goals while continuing to build my current positions.

I'm currently looking for ways to come up with a lump sum of cash for investing to give my monthly cash flows a big one-time boost.  It worked well in the first quarter, boosting dividend income by 20% a month, so I intend to repeat the process for the rest of 2014, shooting for 20% increases every quarter.  I did the math and if I could continue this process over the next 10 years, I would replace my current income by year nine and double it by year ten.  Of course that would mean doubling dividend income every year for 10 years, which is pretty ambitious, but this year the double is already in the bag.  So I'm really working on doubling the third years income.