Dividends!

[moneymaker]

Stumbled upon this site http://www.dividend.com/dividend-stocks/high-dividend-yield-stocks.php .Didn’t know there are so many big companies out there paying decent dividends.

[Coronita]

Yes, except that you’re slightly late. What made dividend investments so attractive was also the special tax treatment from bush era days. Unfortunately, some folks want to abolish that for select people now, so it won’t necessary be as before…

You have to be careful though. A lot of the high dividend paying companies is happening not because that’s what the company normally pays. It’s because the stock has tanked as reflection of poor company performance and the dividend payments relative to stock price is now wacked. If a company tanks that bad, there are fundamental issues with the company that my very well lead to suspending or reducing the dividend in the future.

Nokia is such an example. It’s dividend is listed at 7.5% but then again, we know nokia is bleeding pretty bad these days..So who knows how long that will last. So I won’t be buying Nokia thinking that 7.5% is going to last (Buy nokia because you speculate someone might acquire it, but not for it’s dividend)… Don’t count on dividend payments staying for tech, as things change pretty quickly. And in general tech companies pay pretty shitty dividends…

If you really want a decent/stable dividend payment, the area to look is boring consumer staples stock and/or oil/gas/energy. Things like P&G, PM, MO, and other oil/gas stocks were a steal a few months back with around 5%…It beats sticking things in a 2% CD, and folks that did this 6 months ago also would have seen the general staple stocks rise about 10%.
Also considered “old people stock”, there’s something to be said about them versus say tech or biotech, in that sometimes being slow/boring, “old” yet consistent is a good thing, despite what *cough* some < 35 years who think Zynga is a great deal would think. I had once a financial advisor briefly that was decent. And one of the things he recommended was no matter what, have a portfolio of what he called core dividend stocks....A basket of high quality/boring companies that paid a dividend...His opinion was that these were things that you could more or less count on to return something reasonable in good or bad times...And recommended just buy them, elect to have the dividend reinvested automatically in additional shares, throw them in the corner and forget about it. He gave a list of them from big drug companies, to consumer staples, to oil/energy...Also gave me a nice lecture about taking advantage of the dividend capital gains treatment...then sent me on my way and said "have fun". I told him "what's so fun about these"... He said, trust me, you won't be so stressed out trading in and out of tech all the time... One of the best suggestions I got awhile back. In hindsight, should have listened to him more... For me, I look for different options, different risks and different returns. That way if shit happens in one area, it doesn't wipe everything out. The problem i have is trying to figure out out how much risk an investment/speculation really is, despite what everyone else tells you. Generally, I suck at that.

[an]

Totally agree with flu. I would also add in REIT as a good source of dividend as well. AGNC is what I have and they sure kill the 2% CD. They’re also on your list of high dividend “stocks”.

[Diego Mamani]

[quote=flu]He gave a list of them from big drug companies, to consumer staples, to oil/energy…[/quote]

Excellent advice from FLU and AN. Hey FLU, did you save the advisor’s list?

[Coronita]

[quote=Diego Mamani][quote=flu]He gave a list of them from big drug companies, to consumer staples, to oil/energy…[/quote]

Excellent advice from FLU and AN. Hey FLU, did you save the advisor’s list?[/quote]

I’ll dig it up… Unfortunately, it was like 2.5 years ago. And unfortunately he passed away.

The ones I acted on were at the time were
CVX
XOM
PM
MO
PG
K
DOW
LLY
KFT
JNJ (Blah…total crap)

Those companies where not trading anywhere near where they are today. So dividend was close to 4-5% in most of them at the time. A lot of them are now closer to 2-3%, which would make me think twice right now.

FWIW: BP was not on his list at the time.

Problem with investing is the rules keep changing. Bush era tax cut expiration will make you think twice about dividend investment strategy…If it ends up counting as close to ordinary income, it doesn’t end up being very tax efficient and there are probably conparable investments with slightly better returns albeit slightly more risk and work but nevertheless taxed about the same.

….Part of the reason why this year I moved some out of the stock market, and bought (buying) rental property.. Aside from diversifying risk, rental (albeit more PITA factor involved) has variables to play with when it comes to tax time.

[Diego Mamani]

Thank you FLU, I’ll look into them. Back in March of 2009 there was so much pessimism around… I decided to buy a few dividend stocks such as GE, PVR, USB-PG (a bond-like preferred stock), etc. In the coming months all of them doubled in value, but I was such a chicken, I didn’t put more than $10K or $15K in each.

[Author]

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