Tag Archives: MO

Taking Care Of Grandma’s Money

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By Dividend Watcher:

With longer lifespans due to nutrition and health care advances, many in the Baby Boom generation today are facing the problem of caring for our aging parents in the sunset years of their lives. One problem we felt in our case was the lack of diversification in the income stream. This is how we handled it.

Grandma moved in with us a year ago. She is an 80-something woman. At the time, she was living alone about 1,000 miles away and the care-taking was left to the nearest daughter an hour’s drive from her. Needless to say, it was difficult keeping track of her for everyone involved. It was during this time we came to realize that she needed better supervision. Luckily, we had room to spare and plenty of family around here to help out.

She was a child of the Great Depression. Many of those who went through


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The Type Of Dividend Stocks You Should Put In A Roth IRA

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author name submits:

From my perspective, one of the best assets that an investor can hold in a Roth IRA is a high-quality dividend paying company where the starting yield is in that 4-6% sweet spot and is likely to grow. Considering that a dividend payout is a taxable event in a regular brokerage account, it can be part of an intelligent asset allocation strategy to put the assets where the dividend will constitute a large part of the total return into a tax-advantaged account so that the cash distributions can compound uninhibited for a long period of time.

There are a couple of sectors that provide fertile ground for finding these types of investments. Big telecom is one place to look. There, you can acquire a company like AT&T (T), perhaps the most company with the greatest reputation for safety during the 20th century, which currently grants investors a 5.03% dividend yield.


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Very Undervalued Stock Yielding 5% Plus A 7.3% ‘Special Dividend’

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By Mike the PhD:

Pretty much all investors seem to be nervous right now. Some are nervous that the economy is getting too strong and the Fed will taper off asset purchases (See my article here), others are nervous that the global economy is in for a “hard landing”. Either way, whether an investor thinks the economy is too strong or not strong enough, he or she still needs to be cautious about buying stocks right now.

With that in mind, this is the first article in what I hope will be a short series of articles about stocks with attractive valuations, strong dividends, and great opportunities to hedge your purchase and earn extra return via options. (Note that this article isn’t about options, and you don’t need to be interested in options for this to be a good investment. The options piece is strictly optional.)

I think a reasonable set of criteria


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What If Long-Term Dividend Investors Buy Before A Crash?

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author name submits:

One of the funny paradoxes of long-term dividend investing is this: as soon as you make your stock purchase in a company that you plan to hold for a significant chunk of your investing lifetime (we’re talking an investment horizon of decades here), it can often be in your financial interest to “root” for lower stock prices the moment you make your purchase. At the surface, this may seem annoying because you will see a stock that you just purchased for $100 fall to $80 and think, “Dang, I wish I could buy it now.”

But nevertheless, rooting for lower stock prices may be in your long-term financial interest considering that 317 S&P 500 companies are currently buying back shares, and lower buyback prices mean higher earnings per share growth and freed up capital to increase the dividend. And if you choose to reinvest your dividends back into the company


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5 Highest Yielding, High Quality, Low Volatility, Consistent Dividend Growers

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richard shawBy Richard Shaw (QVM Group):

In our prior article “5 Top Stocks for Dividends, Low Volatility, High Quality and Analyst Ratings” we got an important question that deserves a solid answer.

Note: This article has been amended to change yield data from “12-month distribution yields” which were distorted by special distributions in 2012, to yield data from Bloomberg that is “indicated gross yield”. As a consequence, the list of stocks has changed. The former list was based on trailing distribution yields, while this amended list is based on indicated yields.

This article is a response to a comment to our prior article that is a fairly common point of view. We think the view is potentially dangerous and deserves a rebuttal.

The commenter said,

"When discussing dividend stocks, 2-3% is just too low. Not talking about risky high fliers that pay 10% +, just stocks, ETFs, and funds that pay enough


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High-Yield Dividend Investing Misconceptions

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By Dividend Growth Investor:

One of the biggest misconceptions about dividend investing out there is that investors should change their strategy, depending on their age. I believe that this misconception comes from the traditional world of retirement planning, where advisers told clients to allocate higher and higher amounts to fixed income instruments as they got older.

Over the past 40 – 50 years, fixed income has tended to yield more than stocks. As a result, income hungry investors in retirement seeking current income purchased CDs, bonds and other fixed income instruments. This chasing of yields exposed them to inflation risks. Unfortunately, investors who need yield at all costs typically do not have the foresight to look beyond the next five years. Had these investors simply followed the same investing strategy throughout their investing career, without adjusting for age, they should have done just fine. I believe that following the simple four percent rule should


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5 Defensive Dividend Stocks That Average An 8% Yield

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ByCorvetteKid:

The U.S. economy seems to be doing better – Friday’s non-farm payroll slowdown not withstanding – and the global economy still has lots of potholes: Portugal, Cyprus, Spain, and Italy in the eurozone; a slowing South American dynamo in Brazil; and questions regarding the sustainability of Chinese growth. The U.S. stock market has been among the best performing stock markets year-to-date, and the S&P 500 is revisiting all-time highs whereas European, Asian, and South American markets are miles away from setting new records.

Focusing on domestic-oriented and defensive companies that pay dividends makes sense. While commentators and studies purport to show that defensive and dividend-focused stocks are relatively expensive based on historical metrics, these studies make two important mistakes. First, the relatively rich valuations are based on the last 20 years or so during which most other sectors (including the overall S&P 500) sold at much richer P/E ratios.


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This New Budget Proposal May Limit Your Annual Retirement Income

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author name submits:

As I’m sure many of you may be aware of by now, the budget that President Obama is expected to announce on Wednesday comes with an explicit change to retirement accounts. Namely, the budget calls for a wealth cap on certain accounts. Per Business Week:

Obama’s budget plan, to be unveiled April 10, would prohibit taxpayers from accumulating more than $3 million in an individual retirement account. That proposal would generate $9 billion in revenue for the Treasury over the next decade, according to a White House statement released today.

“Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving,” the statement said.

More specifically, it is not $3 million in assets that President Obama’s proposal would specifically ban, but rather, the amount of money that a retirement account could


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