Tuesday, June 28, 2016

DIVIDEND INCOME FOR JUNE 2016 BEATS OLD RECORD BY 10%!

Even though I initially miscalculated this months dividends, (by including 2 payments that I won't get until July 1st) June still set a new record for dividend income, beating out the old record month of December 2015 by more than 10%!  I'm pretty excited about that and about the final 7 dividends I'll collect on the 30th.  However, I don't expect this record to hold for long, since new dividends from recent purchases will begin in July, I'm pretty sure July will set a new record.  

Looks like everybody else is coming to the same conclusion about Brexit as I did in my last post.  They've realized the market over reacted and have been looking to pick up some bargains.  Consequently, my portfolio is making a quick recovery from the steep drop in the stock market.  Even though it didn't drop nearly as much percentage wise, as the overall market, since it's somewhat insulated from such events by the fact that I only own dividend stocks.  I still managed to pick up shares of UTG for my ROTH account at a much lower price per share than I paid for shares in my IRA account.  So I've reduced the average price per share and increased average yield on UTG.  Since this was a cash purchase, I also raised monthly dividend income by over 2% starting in July!

Presidential politics have been quite a fiasco this time around, but I've already decided to vote for Donald Trump.  I don't agree with everything Trump says and I know he won't be able to do everything he says he's going to do.  However, Hillary has been involved in way too many scandals for my tastes and she sounds way too much like a rerun of the Obama administration.  So I won't be voting for her, ever.  

Sunday, June 26, 2016

WHAT TO DO ABOUT BREXIT?

Big surprise for the stock market Friday as Great Britain voted to leave the European Union, otherwise know as Brexit.  While most people expected the referendum to fail, they seemed unprepared when it actually passed and the big boys on Wall Street wet their pants again.  So we had a huge one day drop in the market with all their panic selling.  It's always the big players and the wealthiest people who rush to panic at the first sign of uncertainty.  Perhaps it's because they have more to lose or perhaps the little guys are used to a measure of economic uncertainty and are better suited to handle it.  Of course economists are predicting doom and gloom, but one thing I've learned over the years is, they're almost never right.  

So what to do, what to do?  I plan to do exactly what I did when the market collapsed back in 2008, which is hang on to everything I have and look for opportunities to pick up dividend stocks on the cheap.  It's unlikely Britains' leaving the EU will cause the havoc reeked by the banking crisis, so I probably won't be able to get the stellar bargains I picked up back then.  Still, when you have only X amount of dollars to invest, it's very helpful if the prices suddenly drop.  I'll be able to purchase more shares than I would have otherwise and I really don't expect the rash of dividend cuts we saw in 2008 either.  Which means cheaper shares with higher dividend yields, boosting the overall yield for my investment portfolio.

A side note to this whole ordeal:  Friday was also the day I qualified to sign up for the 401k plan at work.  One of my co-workers told me it was a bad idea, because I'm "too old."  I don't think I'm "too old" to benefit from the employer contributions and I plan on working there long enough to be fully vested.  While I may not accumulate any staggering amount, it will be that much more.  I'm supposed to turn the paperwork in tomorrow, so I took advantage of the weekend to review all the investment options.  I decided on 20% going towards their only dividend fund and 80% going to purchase shares in a 5 star rated TransAmerica fund.  Figure I might as well shoot for high returns since the target date retirement funds all had dismal returns.  As with Brexit, we'll see how it goes.

Thursday, June 23, 2016

BEWARE INVESTMENT ADVICE: ALWAYS CONSIDER THE SOURCE

First and foremost, let me make this perfectly clear, when I write about my investments, it should NOT be considered investment advice.  If it gives you some ideas for your own investment portfolio, I still strongly urge that you do your own research and make sure an investment is right for you.  I'll be the first to admit that I've made a lot of mistakes along the way and I certainly don't feel qualified to hand out advice to anyone regarding investing their hard earned money.  I only write about my experiences with investing for informational purposes and to keep track of my own progress (or setbacks).

Case in point:  Several years back, I got an investment tip from my sister's boss.  The man and his wife owned several small businesses and seemed to be doing quite well for themselves.  So when my sister said her boss had bought a stake in Atlantic Energy Solutions (AESO) and was expecting to make a pile of money, I jumped at the chance to get in on the deal.  At the time it seemed like a good idea.  So I bought 1,000 shares which are currently worth a whopping ten cents total.  I should have written them off and removed them from my portfolio a long time ago but I left them there as a reminder to consider the source of investment advice.  Turns out the guy giving the advice had lost so much money investing in "hot stocks" that his wife had to return to work as a chiropractor.  Since I took the advice without doing my own research, I paid dearly with the loss of my hard earned money.  

Since then, I'm much more inclined to check Morningstar ratings or Seeking Alpha, then do additional research to see whether or not I believe a stock or fund will continue to grow earnings and raise dividends.  I much happier with my investment results now.  I get a lot of emails touting different stocks and funds and sometimes I check them out, if the story sounds good.  Usually they don't seem to be right for me, so I don't buy, but occasionally they lead me to something that is right for me, so it's not entirely a waste of time.  But the big lesson here is, don't take my word or anyone else's when it comes to paying out your hard earned cash on investments.  Always check them out very thoroughly before you buy.

Tuesday, June 14, 2016

JUNE TO SET NEW RECORD FOR DIVIDEND INCOME IN 2016!

A preliminary estimate of this month's dividend income shows I'm headed for a new record in monthly income for 2016.  With the new dividends from recent purchases and increased dividends from current holdings, income for the month of June will be out the previous record set in March by over 23%!  While this in itself is exciting, what's even more exciting is that I have 6 more continue building income before the end of the year.  If I'm able to increase earnings for the last 6 months of the year as well as I have in the first 6 months, It's going to be a fantastic year!  Of course that all remains to be seen.

My most immediate plans are to continue building up cash reserves and reducing debt to free up additional money for investing.  Meanwhile, reinvested dividends and automatic transfers to my investment account will continue to increase monthly dividends on their own.  The next big cash purchase will be additional shares of SPHD, which I'll purchase through my ROTH IRA for tax free income.  I think SPHD has great potential for boosting the overall value of my portfolio, not just through reinvested monthly dividends, but from capital gains as well.  It also adds a great deal of stability to my portfolio, through it's investments in low volatility, high dividend stocks.

On the job front, I've been very busy.  Working overtime this week again, which will give me extra cash to add to savings and investments.  I've estimated my income for 2016 from my job will increase by 33% over 2015, mostly due to working more hours.  Regardless of whether I get a raise or not, it's still a pretty good increase in earned income.  While I like to see earned income increase, I'm way more excited to see the income increases from dividends.  With my job, I may or may not get a raise in pay, whereas my investments give me a raise every month, whether or not I do any additional work.  

Monday, June 6, 2016

REARRANGING IRA TO GAIN ANOTHER 23% INCREASE FROM CURRENTLY INVESTED CASH!

In my previous post I discussed the sale of under performing stocks and how I benefited from reinvesting the cash.  I decided that worked out so well, it warranted a second look to see if I could perhaps repeat the process.  Here's what I came up with:

I sold my stakes in CLNY, GE and LLY, with a small loss on CLNY and gains of over 60% on both GE and LLY.  I put in an order to reinvest the cash in SPHD (S&P 500 High Dividend, Low Volatility Fund) which pays a monthly dividend.  I lost 12 dividend payments per year from the quarterly dividend payers, but gained them all back from the monthly dividend fund.  The cash collected from the sale will purchase enough shares of SPHD to increase annual dividend income by 23%!  In addition to this, both this transaction and the one I mentioned in my last post, will complete in time to see the new dividends income kick in this month!  Not to mention I'll still get to collect this month's dividend from LLY!  Making both purchases on the same day also reduced commission costs to 2.6%, so I'm pretty happy about keeping the costs down as well.

I'm pretty excited about this strategy of boosting income without any cash out of pocket!  I'm going to take a good look at my taxable account and see if I can pull it off again, with a little twist.  Instead of reinvesting the proceeds in that account, I'll transfer the cash to my Roth IRA and boost tax free income.  

REPLACED 2 POOR PERFORMERS AND DOUBLED THE DIVIDEND INCOME!

I held on to EGAS and MFC hoping to see a turnaround, but alas it hasn't materialized with either one.  Finally made the decision to cut them loose and reinvest the cash.  Put in orders to sell all shares of both stocks and reinvested the money in monthly dividend payer GUT.  

By cutting my losses and redeploying the cash, I gained 4 extra dividend payments per year, bringing the annual total to 253.  Or, to put it another way, I'll collect a dividend payment every 1.4 days!  Reinvested cash from the sale of EGAS and MFC will not only increase total number of shares owned and total dividend payments, but it will also more than double the amount of dividend income!  I don't expect to see any stellar capital gains from my investment in GUT, but I'm after the stability of the fund and the dividend income it produces, so that's not an issue. 

My next cash purchase will be shares of SPHD for my Roth IRA account.  Hope to complete the purchase by the end of June, depending on my cash situation.  Right now I'm spending quite a bit on much needed maintenance on my car, so I'll just have to play it by ear.

Wednesday, June 1, 2016

KICKED OFF THE MONTH OF JUNE WITH 5 DIVIDENDS AND 30% INCREASE FROM NCZ!

The month of June 2016 is off to a good start, with 5 dividend payments on the first day of the month!  Also saw a 30% increase in monthly dividend income from NCZ, due to the most recent purchase of additional shares.  Purchasing more shares through reinvested dividends and collecting a nice chunk of cash is a great way to start off the month!  I expect to see new dividend income from GGT and GUT kick in on the 23rd of this month, followed by a jump in income from PHK in the month of July, from my most recent share purchases.

I'm in the process of diverting dividend income from my taxable account to cash, which I plan on transferring to my ROTH IRA to build tax free income as rapidly as possible.  I've noticed from the slew of annual reports I've been reading, a lot of the high yield mutual funds rely quite heavily on REIT's and financial stocks (banks and insurance companies), as well as utilities, which should all benefit from the low interest rate environment.  These type of funds, along with high yield stocks seem like the perfect fit for an account where capital gains and income are non-taxable.  So I'll be looking to load up my new ROTH account with those.

So basically for the remainder of 2016, I'll only add enough cash to my IRA to get the maximum tax deduction.  I won't be contributing any additional cash out of pocket to my taxable account, although it should continue to grow through reinvested dividends.  I'll be transferring whatever cash I collect from dividends in my taxable account to the ROTH account.  Any additional cash contributions on my part will all go to the ROTH account, with the goal of building a stream of tax free income as rapidly as possible.