It's nearing Christmas and I haven't done any shopping yet. But I have the next couple of days off, so I'll get it all done then. In the mean time, I put some of my Christmas bonus to work, investing equal amounts in AGNC and NRZ for a boost to monthly dividend income of a little over 6%! Dividends from the new shares purchased will kick in in January 2019, which I figure is a great way to start off the new year.
Yesterday's big drop in the stock market has a lot of people running to cash. Quite understandable, especially since 2008. However, I have no intention of abandoning my dividend investment strategy. I'm looking at the situation as an opportunity to buy more dividend income at a lower price. What the market does tomorrow or next week or next year is really anybody's guess. But if you're collecting a nice stream of dividend income every month, it becomes almost irrelevant since you're not likely to be selling your shares.
Currently, I'm showing a loss on most of my investments. That may continue for quite some time. But I'm not panicking as long as they continue to pay dividends. I have to admit it's tempting to take all the dividends in cash, just to be on the safe side. However, I think it's better to reinvest the dividends at the new lower prices and reduce my average price per share while I have the chance. I'd feel pretty stupid about building up a big chunk of cash and then the market takes off again and I'd have lost out on the chance to pick up some bargains. So I'll keep reinvesting dividends until I actually need the cash.
Tuesday, December 18, 2018
Tuesday, December 4, 2018
KICKED OFF DECEMBER WITH 5 GREAT DIVIDEND PAYMENTS!
Now that the transfer from Capital One to Etrade is complete, it's time to get busy building monthly dividend income again. I'm happy to report, I collected 5 great dividend payments for the first of December, reinvesting 4 to buy more shares and taking the remaining payment in cash.
I've taken a new approach to reinvesting dividends since switching to Etrade. If the stock is more than what I paid for it, I take the dividend in cash and if it's selling for less than I paid, I reinvest the dividend. My goal is to reduce the average price per share on the stocks that are down in price by reinvesting dividends at the lower price. This will put me in a better position to benefit from a recovery in share price on these stocks. As for taking cash payments from stocks that have gained in price, it may seem like it would be better to buy more shares of something that's doing good. However, my thinking here is, I don't see any of them doing well enough going forward to justify raising my average price per share by reinvesting dividend payments. So instead I'll take the cash and use that where I see more opportunity.
I'm still wanting to purchase a larger stake in AGNC. I like their monthly dividends and the high yield, but I mostly like their numbers which lead me to believe they can continue paying the dividends. So I'm wanting to build up a large stake in my Roth account to add to monthly cash flow. I do own shares in all three of my investment accounts now and plan on keeping them for the long haul.
I've taken a new approach to reinvesting dividends since switching to Etrade. If the stock is more than what I paid for it, I take the dividend in cash and if it's selling for less than I paid, I reinvest the dividend. My goal is to reduce the average price per share on the stocks that are down in price by reinvesting dividends at the lower price. This will put me in a better position to benefit from a recovery in share price on these stocks. As for taking cash payments from stocks that have gained in price, it may seem like it would be better to buy more shares of something that's doing good. However, my thinking here is, I don't see any of them doing well enough going forward to justify raising my average price per share by reinvesting dividend payments. So instead I'll take the cash and use that where I see more opportunity.
I'm still wanting to purchase a larger stake in AGNC. I like their monthly dividends and the high yield, but I mostly like their numbers which lead me to believe they can continue paying the dividends. So I'm wanting to build up a large stake in my Roth account to add to monthly cash flow. I do own shares in all three of my investment accounts now and plan on keeping them for the long haul.
TURNING A NEGATIVE LIFE EVENT INTO A POSITIVE
A couple of weeks ago, I got woke up at 2 am. by my neighbor pounding on my front door. He told me someone just messed up my car. Apparently a hit and run driver ran off the road, crashed into my car in the driveway and took off. One look at my car convinced me it would be totaled by the insurance company. Right then and there I decided not to let this be a catastrophic event. I had full coverage on my car, so I knew I would get something for it.
As it turned out, the police were able to catch the driver of the other vehicle. However, when I called to file a claim with his insurance, they told me his insurance number was invalid. So I had to file a claim with my own insurance. They sent a tow truck to tow my car to the body shop for an estimate on repairs. I was still convinced they would total the car, so I began looking for a replacement. I estimated what I thought I'd get after the deductible and shopped online for a car with comparable mileage to my old car and within the price range of the insurance settlement. I did research on used vehicles concerning reliability and gas mileage while I shopped and narrowed my picks down to a Toyota Corolla or a Ford Focus. When the insurance company called to tell me they'd decided on a total loss and confirmed how much they'd be paying for my car, I went and bought the Ford Focus. I'd have preferred the Corolla, but it was already sold.
After all was said and done, I bought a car 6 years newer than my previous car. It was priced at $2,400 but I got it for $1,950. It needs a few minor repairs, which I'll pay for with the $650 I had left over from the insurance money after buying the Focus and getting it licensed and insured. My insurance is less on the newer car and I'm averaging 28.5 miles per gallon on gasoline, so I'll save money going forward. Should I have any money left after making repairs, I'll put that toward purchasing more shares of a monthly dividend stock, so I can continue to collect from this incident. Also, should my insurance be able to collect from the driver of the other vehicle, I'll be reimbursed for my $500 deductible.
So with a little thought and action on my part, I took what could have been a very negative situation and turned it into a positive one.
As it turned out, the police were able to catch the driver of the other vehicle. However, when I called to file a claim with his insurance, they told me his insurance number was invalid. So I had to file a claim with my own insurance. They sent a tow truck to tow my car to the body shop for an estimate on repairs. I was still convinced they would total the car, so I began looking for a replacement. I estimated what I thought I'd get after the deductible and shopped online for a car with comparable mileage to my old car and within the price range of the insurance settlement. I did research on used vehicles concerning reliability and gas mileage while I shopped and narrowed my picks down to a Toyota Corolla or a Ford Focus. When the insurance company called to tell me they'd decided on a total loss and confirmed how much they'd be paying for my car, I went and bought the Ford Focus. I'd have preferred the Corolla, but it was already sold.
After all was said and done, I bought a car 6 years newer than my previous car. It was priced at $2,400 but I got it for $1,950. It needs a few minor repairs, which I'll pay for with the $650 I had left over from the insurance money after buying the Focus and getting it licensed and insured. My insurance is less on the newer car and I'm averaging 28.5 miles per gallon on gasoline, so I'll save money going forward. Should I have any money left after making repairs, I'll put that toward purchasing more shares of a monthly dividend stock, so I can continue to collect from this incident. Also, should my insurance be able to collect from the driver of the other vehicle, I'll be reimbursed for my $500 deductible.
So with a little thought and action on my part, I took what could have been a very negative situation and turned it into a positive one.
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