Monday, March 11, 2013


Collected dividend payments from Lilly (LLY) and Centerpoint Energy (CNP) last week for a total of 2 extra "paydays".  These two stocks are both long term holdings in my IRA (LLY) and my taxable account (CNP).  While I've been busy adding positions in high yield/high risk issues paying monthly dividends, I want to keep things balanced out by maintaining and building positions in dividend growth stocks.  Stocks that grow their dividends over time can be much better investments in the long run than high yield stocks, with much less volatility. In my case, I'm willing to accept more risk right now in order to jump start monthly cash flow.  

In the long term, dividends earned from the higher risk issues will be re-invested in more stable blue chip stocks with good dividend growth histories.  Most likely my investments in individual stocks will lean more towards stocks that make the Dividend Aristocrats list.  I'm limiting the number of stocks in which I'll purchase positions to around 20 issues.  It makes it easier to keep track of, while providing adequate diversification in both accounts.  

I have decided to add two more monthly dividend payers in the month of April to bring my total number of dividend payments per year to 119.  I'll add one more in May to bring my total to 131 or an average of about 11 dividends per month.  This will greatly increase compounding in my accounts and will help speed up the rebuilding process.  All dividends paid to my IRA are automatically reinvested, while dividends to my taxable account are paid to my interest bearing account so I can build up my cash position.  Having cash in my taxable account will allow me to take advantage of opportunities that I might not be able to invest in from my regular work income. 

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