Friday, February 9, 2018

USED LIMIT ORDER TO BUY QYLD AT LOWER PRICE!

With the stock market still trying to decide whether to go up or down, I took advantage of the volatility and used a limit order to purchase my stake in QYLD.  I set the purchase price lower than the quote price and the jittery market did the rest, letting me buy in at the lower price, then immediately going back up putting me in the black on the first day of purchase!  I may have to use limit orders more often.  I've known about them for quite some time but never took advantage of it.  Now that I've actually used it to my advantage, I can see where it could be quite useful for future stock purchases and sales.

Was also happy to see GLW increased it's dividend again this year.  This year's increase is up by 16% over their last quarterly dividend.  I've trade GLW several times in the past, always making a profit, but the stake I own now I've held for quite some time.  I'm taking more of a buy and hold approach this time around and it looks as though it will pay off in the long run as well.

Even though most of my holdings are trending up, my portfolio is still down considerably from a couple of weeks ago.  So I'm hoping to pick up bargain prices on more shares before they return to previous highs.  While I will be investing some cash out of pocket, I'll mostly be increasing number of shares held through reinvested dividends.  That's probably for the best, since there are no commissions on reinvested dividends.

Collected my first dividend from AGNC and am pleased to report it was a nice tidy sum!  Their high yield monthly dividend will provide a significant boost to monthly and annual dividend income.  The cash flow from AGNC, along with NLY, QYLD and EVV should help make 2018 a very good year!

Capital One has decided to turn over it's investment business to ETRADE later this year, so I'll have to get used to a new brokerage.  I can't imagine it is that much different from what I'm used to and ETRADE has a very good reputation.  I'm looking forward to the change.  It will be nice to be dealing with more of a mainstream brokerage.  Although I'm a little surprised Capital One, with all their resources, couldn't make a go of it.  Perhaps they decided it was better to stick to their mainstream business.

It was good to see how my portfolio weathered this latest storm.  While I did have paper losses on the value of my stocks, they were relatively minor and dividend income actually increased.  So I'd say my mix of investments are pretty well suited to handle an actual correction in the stock market if or when one should occur.

Wednesday, February 7, 2018

HOW MANY TIMES A YEAR DO YOU GET PAID?

I decided it was time to re-calculate the number of times per year I get paid.  With my latest stock purchases my dividend payments per year went up to 532!  I get paid from work 24 times per year (twice per month).  Then I collect interest payments 12 times per year on my bank accounts.  I also collect 24 payments per year from my little internet side gigs (Swagbucks and Bing).  So you add that all up and I'm collecting a whopping 592 payments per year!  

While I live on my income from work and it's still my largest source of income, dividend income increases every single month.  I may or may not get a raise from work this year, but I know I'll get at least 12 raises from my dividend stocks due to reinvested dividends.  All the negative Nancys always say, "Well eventually you'll have to start collecting the dividends in cash and it won't be going up anymore."  Yes that's partially true.  However, I have 4 separate investment accounts.  So I can draw the dividends in cash from one or two of those accounts and keep reinvesting and growing the income on the rest.  No matter how you look at it, getting paid 592 times per year is a very good thing!    

Tuesday, February 6, 2018

STOCK MARKET DROP NOT ALL BAD NEWS

Like the ice snow storm here in Missouri on Sunday, the past weeks' drop in the stock market kind of caught everyone off guard.  I have to admit, it surprised me as well.  However, instead of fretting over paper losses, I've been looking at the opportunity it presents.  As far as the economy, everything is still looking good going forward, so I'm looking at this as a chance to pick up more shares at much cheaper prices.  Lower stock prices mean it's now cheaper to buy a dollar's worth of dividends than when prices were up.  It allows me to increase dividend income much more rapidly than I had expected, since I'm not paying as much to purchase additional shares of stock.

On that note, just completed my purchase of QYLD in time to capture the dividend for February.  Also timed the sale of PFE so I could make a small profit and collect a final dividend from them later this month.  The monthly dividends I collect from QYLD will be about 3 times as much as I was receiving from ORA and PFE, plus it allows me to get involved in trading covered calls much sooner than I would have otherwise.  Although, they'll be doing the trading for me, it's the idea of creating an income stream from options trading that appeals to me.  I still plan on trading covered calls on my own as soon as the funds become available.

Don't have any idea how long this drop in the stock market will last, it seems to be at least partially fueled by limit orders kicking in and activating trades, driving prices down.  In any case, I'll be buying everything I can afford to boost my overall portfolio yield while the fire sale is on.

Thursday, February 1, 2018

FEBRUARY KICKS OFF WITH 11 DIVIDEND PAYMENTS!

The month of February started off great with 11 dividend payments, including my first dividend from JPS!  Since stock prices are still down and most of my dividend payments were invested in more stock, I was able to pick up some shares for less.  Also have a couple stocks in my taxable account paying out cash, so the cash balance in my savings account jumped by 10%!  How's that for a great first day of the month?

Going forward, even though February is a short month, I'll collect a total of 41 dividends this month.  With 11 today, I'm looking forward to another 30 payments before the end of the month!  Should get all my tax documents in by the 15th so I'll be able to prepare my income taxes.  I'm going to invest my refund in shares of EVV for my IRA account.  Right now they're selling at a discount to net asset value and they're quite near their 52 week low.  With monthly dividends and over a 7% yield, I think it will be a good place to park my tax refund this year.

Wednesday, January 31, 2018

JANUARY DIVIDENDS UP 33% OVER 2017!

Collected a whopping 14 dividend payments on the last day of January 2018!  Compared to January of last year, dividend income for the month is up by over 33%!  While that's not as much of an increase as I've seen in past years, it's still pretty amazing.  Looking forward to a big jump in year over year earnings in February as well, with the first dividend payment from AGNC.  This monthly dividend payer alone will increase total cash flow by over 5% per month!  

Looks as though the stock market is reacting favorably to Trump's state of the Union address.  I'm seeing nice increases in share prices on the majority of the stocks I hold.  Whether or not anything the President says or does helps the stock market, I think we're going to see an overall increase in the market again this year.  Whatever happens, I'm confident I'll see a big increase in monthly cash flow from dividends by the end of 2018.

I've decided to sell my stakes in ORA and PFE for a small gain on both and reinvest the cash in QYLD.  This will significantly boost monthly dividend income and I'll still be invested in ORA and PFE through some of my other fund holdings.  My intention when I bought the shares was to hold them for capital gains and collect the dividends along the way.  While my gains on both stocks after commissions is only a little over 10%, I'm satisfied with that and looking forward to increasing monthly income and getting involved with covered call trading through QYLD.  I'll hold off on the sale of PFE just long enough to collect their next dividend payment, which still gives me time to buy QYLD and collect a dividend from them in February.    

Tuesday, January 30, 2018

CHASING CAPITAL GAINS CAN LEAVE YOU EMPTY HANDED

I mentioned in my last post how much more I prefer to pursue dividends as opposed to capital gains.  Like I said before, I enjoy capital gains as much as anybody, but I also know how easily they can quickly disappear.  The drop in the stock market this week provides ample proof of what I was saying. The drop in share prices over the past two days has dramatically impacted the overall value of my portfolio.  However, even if the market shows a loss for the month, my dividend income will increase!  Had I only been invested for growth, i.e. capital gains, I would have been sorely disappointed.  Since my investment objective is increasing dividend income every month, I'm actually quite excited.  With the stock prices being down, my big dividend days at the end of the month and the first of next month, will buy more shares than they would have had prices remained the same or went up.  So I'll make a bigger gain in monthly dividend income than I had expected.  I'm pretty happy about that.

I've bought and sold a lot of stocks over the past 25 years.  Some I made a lot of profit on, some I lost money on, that's the way it works.  I still buy some stocks with the intention of trading for capital gains, but I only buy stocks paying dividends, so if the price should go down instead of up, I'll still collect some cash on a regular basis.  

As a reminder of how fleeting capital gains can be, I own 1,000 shares of stock in my taxable account that I bought on a tip from my sister's boss.  It seemed very promising at the time.  Didn't pay a dividend, but it looked as though they were really going places.  I'm not sure exactly where they went, but it wasn't where I expected.  My 1,000 shares is currently worth 10 cents.  Which is exactly why I say chasing capital gains can leave you empty handed. 

Friday, January 26, 2018

CAPITAL GAINS VERSUS DIVIDENDS

In an earlier post, I mentioned my interest in getting involved in trading options in the form of covered calls.  While I don't have the cash available to do this at the present time, I've discovered there are funds specializing in selling covered calls to generate income for shareholders.  I read an article today comparing an ETF I'm interested in buying in to with a CEF.  The author made the case that it would be foolish to go with the un-managed ETF when the "professionally" managed CEF more closely tracked the performance of the covered call market, generating more capital gains for its' shareholders.

Well here's my take on that.  As someone who's invested through lots of market ups and downs, I see very little advantage to favoring an investment for potential capital gains.  Capital gains can only be collected if you sell some or all of your shares, otherwise they're just paper profits.  On the other hand, dividends can be collected as cash payments from the get go, either buying more shares or to use however you see fit.  Since the closed end fund's (CEF) fees were extremely higher than the exchange traded fund (ETF) I'm interested in and the dividend yield is 3% higher, I think it would be better to save on fees and take more cash up front.  Anyone who has invested for any length of time realizes how quickly share price gains can evaporate in a down market, but while dividends might be reduced, it's a lot less likely they'll be discontinued altogether.  When I read this article, I couldn't help but wonder why someone would encourage you to pay more in fees and just hope for the market price to continue to rise.  I'll be buying into the ETF instead and collecting a nice monthly dividend, which by the way had also increased in price.

As far as I'm concerned, if it's a choice of investing for capital gains or dividends, I'm always going to go for the dividends.  Capital gains tend to follow stocks paying reliable dividends, so whatever I earn from higher share prices is just icing on the cake.