Question on Dividend Stocks or Funds

[maddythebeagle]

Interesting thanks. I havent done the "Dogs of the Dow" thing, but I always thought it was more a contrarian idea and worked because the highest yielding stocks were the ones that had stock price declines from bad news and bad news usually knocks a stock down lower than its value.

[cute fuzzy bunny]

Do note that over time, "bad stocks" were good stocks to own, and "good stocks" were bad stocks to own.

[yakers]

Originally Posted by ()

Do note that over time, "bad stocks" were good stocks to own, and "good stocks" were bad stocks to own.

Another way to look at this is over a long time owing all stocks (TSM) is pretty good and fairly safe. Of course that means all of 1% dividends these days plus some growth.

[cute fuzzy bunny]

A true statement, however a well diversified portfolio of value stocks beats the pants off of the TSM returns over longer term periods of time, plus pays you ~2.5-3.5%+ in low tax cost dividends.

More volatility in short term periods, but if that makes you nervous, buy other stuff.

[ats5g]

Vanguard jumping on the Bandwagon:

New Dividend Acheivers Index fund.

Where the he** is the int'l bond fund or microcap fund!!!

- Alec

[cute fuzzy bunny]

Originally Posted by ats5g

Vanguard jumping on the Bandwagon:

New Dividend Acheivers Index fund.

Where the he** is the int'l bond fund or microcap fund!!!

EXXXXXCELLLLENT. Now I know what to do with that loose 100k I've got hanging around.

I suspect the microcap and intl bond funds would be expensive and vanguard dont likey the expensive funds? Just a wild guess. Or maybe they figure those are too exotic for their typical customer?

[Nords]

Originally Posted by ()

EXXXXXCELLLLENT.* Now I know what to do with that loose 100k I've got hanging around.

Yeah, that caught my attention too. It sounds like Vanguard is proposing to go head-to-head against iShares' DOW Dividend ETF (DVY) but hopefully at a lower ER than 0.40.

But I don't understand their VIPERS. Are they traded on a stock exchange? More importantly, is their VIPER/ETF version of their DOW Dividend Achievers fund going to be a publicly-traded security that I can buy through my Fidelity brokerage account, or do I have to be a freaking Vanguard shareholder and put up with VG's @#$% alleged "customer service"?

[modhatter]

Anyone ever follow Geraldine Weiss newsletter? She advocated purchasing dividentd stocks (blue chip) when they are undervalued, usually by either litigation, bad accounting or patent experations, etc. That is when the dividend is the highest, and when it gets past all the mud, and hopefull starts climbing, the dividend falls, and you jump off when it gets overvalued.

Anyone subscribe to newsletter? What has been your experience?

[maddythebeagle]

Anyone ever follow Geraldine Weiss newsletter? She advocated purchasing dividentd stocks (blue chip) when they are undervalued, usually by either litigation, bad accounting or patent experations, etc. That is when the dividend is the highest, and when it gets past all the mud, and hopefull starts climbing, the dividend falls, and you jump off when it gets overvalued.

never heard of it, but there are a lot of newsletters and I suscribe to none. I occasionaly look at some of them and get the free sample issues, though. I wonder what it takes to start a newsletter?

[cute fuzzy bunny]

Originally Posted by Nords

Yeah, that caught my attention too. It sounds like Vanguard is proposing to go head-to-head against iShares' DOW Dividend ETF (DVY) but hopefully at a lower ER than 0.40.

But I don't understand their VIPERS. Are they traded on a stock exchange? More importantly, is their VIPER/ETF version of their DOW Dividend Achievers fund going to be a publicly-traded security that I can buy through my Fidelity brokerage account, or do I have to be a freaking Vanguard shareholder and put up with VG's @#$% alleged "customer service"?

Oh fer chrissakes just get a vanguard account!!!

Never had a problem with customer service, but then I have my own named rep.

Yep, the vipers work just like any other etf; you can buy shares out of your brokerage account.

Maddy - I can tell you exactly what it takes to start a newsletter. A name and/or a face is usually required, but not essential. After that, all you need is an opinion that will eventually be proven wrong. Usually quite quickly.

[. . . Yrs to Go]

Originally Posted by ats5g

Just thought I'd throw this out.* From Aswath Damodaran of NYU:

HIGH DIVIDEND STOCKS: BONDS WITH PRICE APPRECIATION?

I'll duck now.*

- Alec

Sam's a moron!

[grumpy]

Originally Posted by modhatter

Anyone ever follow Geraldine Weiss newsletter? She advocated purchasing dividentd stocks (blue chip) when they are undervalued, usually by either litigation, bad accounting or patent experations, etc. That is when the dividend is the highest, and when it gets past all the mud, and hopefull starts climbing, the dividend falls, and you jump off when it gets overvalued.

Anyone subscribe to newsletter? What has been your experience?

I've read some of her stuff and I agree with her buy-side approach but I don't understand your comment about jumping off when the dividend falls. I often sell if the dividend is cut, but I think you are saying that when the stock price rises and the annual dividend amount stays the same you would sell because the current yield has gone down. Once I own the stock the current dividend yield doesn't mean that much to me.

Grumpy

[maddythebeagle]

and you jump off when it gets overvalued.

I wouldn’t agree with this statement since I would be taking on capital gains taxes and commissions. I would suspect that if she is suggesting this, it would be because she wants you to continue to subscribe to her newsletter to find out what to sell. How much do you have to pay a year to get the “magic decoder ring”?

[Dreamer]

We currently have the traditional investor shares with our 500 index fund at Vanguard. Which would be better the traditional investor shares or the exchange traded viper shares? I am not sure what the difference between the two are and which would be better.

Thanks,

Dreamer

[eyetri2]

For the Geraldine Weiss thing, I wrote it about it somewhere else under my investment philosophy, but the website is iqtrends.com. You can see an old sample issue at the website. And no, I do not subscribe; I only use her theories to start researching ideas.

The approach is this: People look at P/Es of companies and say "That P/E is low relative to the company's history." She started looking at dividend yields about thrity or so years ago and said companies tend to be in a dividend range. So, for example, Citigroup (I own and am negative after two years) has had a historic dividend range between 2.2% and 1.0%. When C has a yield of 2.2% or greater, it is considered a safe investment historically because, as someone said before, institutions will start buying because of the great yield. With yield of C now at 4% and increasing the divi each year, the question becomes "How low can it go with such a big dividend cushion?" Same question on the other end is Nucor (I did own and sold for a profit). In a year, when steel stocks were it, NUE went from Undervalued to Overvalued, according to its yield. Once you hit Overvalued, it could still run, BUT unless the company raises the dividend to put the yield back in Nucor's historic yield range, one would want to sell or put in stop-losses to let the market take you out.

And in terms of newsletters, I believe it has been #1 in the last 10 and 15 years for risk-adjusted returns. It will not find the next growth stock; I have used it to design a buy-and-hold (to a degree) portfolio but get a "safe" dividend with minimal risk to the downside.

I hope this made sense.

[ats5g]

Originally Posted by Dreamer

We currently have the traditional investor shares with our 500 index fund at Vanguard.* Which would be better the traditional investor shares or the exchange traded viper shares?* I am not sure what the difference between the two are and which would be better.

Thanks,

Dreamer

Hi Dreamer,

For difference between ETF's and index funds see View Features of Vanguard VIPERs and Traditional Index Funds.

Vanguard doesn't have an ETF benchmarked to the S&P 500. There are Spiders [you've probably seen the commercial with the spider on the scale] and [iShares IVV. Though Vanguard does have Large Cap Vipers and TSM Vipers. The Large Cap Viper is quite similar to an ETF that Tracks the S&P 500 index in that it tracks an index of 750 large cap companies.

If you're wondering which is better [index funds or ETFs] Vanguard had a little decision tree See if Vanguard VIPERs Are Right for You. I think for the investor without a lot of money, Vanguard's large cap index funds [S&P 500 or TSM] could be better because of the transaction costs and brokerage fees with ETF's. Also, since Vanguard has lowered the bar to get into Admiral shares to $100,000, if you've got over that in an index fund, you're paying almost the same expense ratios as in the ETF's.*

Also, the tax efficiency of Vanguard's index funds focusing on large cap stocks [TSM + S&P 500] are just as tax efficient at the large cap ETT's.

- Alec

[nwsteve]

Originally Posted by ats5g

Vanguard jumping on the Bandwagon:

New Dividend Acheivers Index fund.

Another dividend eft started trading Sept 15 from Powershares--PFM* Focuses on companies with consistent record of divident payout and increases.
"Very few companies ever receive Mergent's esteemed designation of "Dividend Achiever™". This select group of companies have demonstrated their commitment toward rewarding shareholders through continuous dividend growth regardless of the economic conditions. To earn the designation of Dividend Achiever™, a domestic company must have increased its regular annual dividend every year for each of the last 10 years while an international company must have increased its annual dividend each of the last 5 years"* More at http://www.powershares.com

nwsteve

[Nords]

Originally Posted by nwsteve

Another dividend eft started trading Sept 15 from Powershares--PFM.

Apparently Powershares' Marketing Dept missed the fact that, in many academic institutions and the military, PFM is a derogatory acronym standing for "Pure Freakin' Magic". Not exactly the image you want an ETF to have among its prime customers...

[nwsteve]

Originally Posted by Nords

Apparently Powershares' Marketing Dept missed the fact that, in many academic institutions and the military, PFM is a derogatory acronym standing for "Pure Freakin' Magic".* Not exactly the image you want an ETF to have among its prime customers...

On the other hand, given some of the ads we see these days, maybe the acronymn is exactly what some clown in marketing thought would make it the ideal trading symbol.*
Nwsteve