The BEST Norwegian Widow Portfolio

[ScaredtoQuit]

I am thinking about placing more of my portfolio in dividend stocks in lieu of my current slice and dice strategy... (Hear that UncleMic? You're rubbing off!) When I think back to the bear market of a few years ago, I remember my dividend stocks holding up fairly well. No dividends were skipped during the downturn and the impact on market value wasn’t as extreme as with the index fund portions of my portfolio. My thinking is that I might be better able to ride out the next downturn psychologically if those dividends keep coming in.

For those with experience investing in dividend stocks, please provide feedback on this strategy. Also, please share what individual income stocks and/or mutual funds that have performed well for you over the years. Please share the reason you like the stock, how long you’ve owned it and information about the current yield.

Right now, my favorites include the following:

Citicorp (C)
Currently yielding 4%, this stock has it all… steadily rising earnings per share, steadily rising dividend payouts, international exposure, and a household name. I figure the dividends from any future investments in Citicorp will provide an automatic safe withdrawal of 4% plus provide long-term appreciation for the future. I’ve been a Citicorp shareholder for more than 10 years.

Bank of America (BAC)
My reasoning on this one is almost exactly the same. However, BAC is currently yielding an even higher 4.4%. I 've only owned this one for about two years but it's been quite profitable.

Nuveen Preferred & Convertible Income Fund (JPC)
I’ve been cautioned about the junk bond component of this fund, but over the last year or so that I’ve owned it, this one has worked out well for me. Current yield is around 8%. However, I am watching it like a hawk in case a future economic downturn starts to drag on the junk bond component of the fund.

Right now, I’ve got about $800K devoted to slice and dice (including a 35% debt component), $100K in dividend stocks, and another $100K in money markets. In a few months after I bail, I will be getting another lump sum of about $700K. I am thinking of earmarking about 60% of that for dividend stocks.