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Long term dividend reinvesting
Old 12-25-2013, 05:17 PM   #1
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Long term dividend reinvesting

Hey everyone. This is my first real post on the forum so bare with me. I'm looking into buying some long term dividend reinvesting stocks. Some research has led me to southern company and maybe fidelity income. I was just looking for some suggestions and general advice on long term dividend reinvesting. I'd like to harness the power of compounding interesting as early as possible. I use scottrade and I guess I should talk to them about how they handle dividend reinvesting?
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Old 12-26-2013, 06:23 PM   #2
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If you like dividend stocks my first recommendation is Schwab's equity dividend ETF SCHD. My second is Vanguard's VIG.
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AA = 60/35/5. Expected CAGR = 5.7%. GSD (5y) = 7.8%. USD inflation (10 y) = 1.8%. AWR = 3.0%. TER = 0.5%. Net Port Yield = 1.7%. Term = 36 yr. FI Duration = 4.9 yr. Portfolio survival probability = 86%.
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Old 12-27-2013, 12:51 PM   #3
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If you are a Fidelity customer, you can buy individual companies, SO, PG, KO, etc..., pay the $7.95 commission for the initial share purchase, and then have the dividends each company pays reinvested at no charge in the same company.I have been doing this for years now.
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Old 12-27-2013, 03:00 PM   #4
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If you are a Fidelity customer, you can buy individual companies, SO, PG, KO, etc..., pay the $7.95 commission for the initial share purchase, and then have the dividends each company pays reinvested at no charge in the same company.I have been doing this for years now.
+1
Thats what I do, Scottrade should allow the same. You can go the fund or etf route too. You don't mention if this is taxable or deffered. Some folks don't reinvest divs on taxable account, for ease of harvesting gains losses.
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Old 12-27-2013, 04:46 PM   #5
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A mutual fund will give you more diversification and less risk than individual stocks until you have enough of a stash to play individual stocks in a diversified way.
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Old 12-27-2013, 09:35 PM   #6
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Ok so. Sorry if these are stupid questions, I'm fairly a amateur invester. So when my mom said she has stock in FEQIX(fidelity income) that means she didn't just get her broker to buy FEQIX but she has a actual account with fidelity. And if I wanted to invest in FEQIX then I would have to open a fidelity account for trading stock like my scottrade account?
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Old 12-27-2013, 10:11 PM   #7
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FEQIX is a mutual fund which holds individual company stocks. You can look up that symbol and find what stock holdings are in the funds.

You can use your Scottrade account to buy a mutual fund. Or open Fidelity account to buy the fund with no sales charge.

It sounds like you need to perform more research and read a few investing books first.
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Old 12-27-2013, 10:12 PM   #8
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No stupid questions:
Many brokers will sell you differnt funds families. You need to understand if it's in the brokers No Transaction Fee network(NTF). I'm with Fidelity, for some of my portfolio. I don't know of any funds I can't buy(someone will correct me if I'm wrong), but most cost $0 to buy, others may cost $75.
I do have to question the fund choice. FEQIX has an expense ratio of .68%. It's actively managed, is the active management what you want? It doesn't appear to beat it's benchmark. Here's a link to Fidelity's pages on the fund.

https://fundresearch.fidelity.com/mu...mary/316138106

If all this is gibberish to you, get more education. There's a recommended reading list here. If mutual funds are a mystery to you, you might try Morningstar's free training. There's lots of good free or low cost education out there. Don't fall into the notion it's to complex, you can create a great portfolio with 2-3 funds. My favorite entry level book is Millionaire Teacher, others here may have different great ideas.
Best wishes,
MRG
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Old 12-27-2013, 10:17 PM   #9
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Thanks for the help guys! I'm gunna get on that reading list and recomended ones. I've only read one book on stocks and that's " one up on Wall Street" by Peter lynch.
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Old 12-29-2013, 07:57 PM   #10
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Lets say I have 1200$ I'm ready to invest it and never touch it for at least 20 years. What woudl be the best way to invest it for least amount of taxes taken out, least amount of fees, be able to dividend reinvest, and obtain growth?
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Old 12-29-2013, 08:31 PM   #11
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Lets say I have 1200$ I'm ready to invest it and never touch it for at least 20 years. What woudl be the best way to invest it for least amount of taxes taken out, least amount of fees, be able to dividend reinvest, and obtain growth?
You'll have a small problem with fund minimum investments with that amount.

You want a target retirement date fund with a date about 20 years in the future. It holds tons of different stocks, and is diversified in lots of good ways. One fund and you're done. Vanguard has some excellent low cost choices.

If you wish to get more complicated, look for a "couch potato" portfolio with just a few index funds.

Don't pay any attention to "One Up On Wall Street". You want to start with asset allocation, buy and hold, and simple index funds. You can go wild with your portfolio after you do your reading.
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Old 12-29-2013, 11:09 PM   #12
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I think you can buy into the Vanguard Star fund for $1K, at least for IRA accounts. Had my son in that since he was 17, expect him to use that fund till his retirement someday, he is 24 now. Very diversified fund and decent ER for low account levels.
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Old 12-29-2013, 11:12 PM   #13
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Interesting. I'm researching vanguard as we speak.
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Old 12-29-2013, 11:23 PM   #14
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I really enjoyed the book "Investing for Dummies" by Eric Tyson. It's great for beginners but gets into fairly complex topics without being intimidating. Don't be offended by the title. The Dummies series of books have been great reads for me. I have quite a few of them and always enjoy reading them. If you are somewhat new to investing, this one is a great first read.
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Old 12-30-2013, 09:26 AM   #15
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Another vote for Vanguard Star with minimum $1000 open. Had daughter open Roth with that. Every time she gets to $4k she moves $3k into Wellington.
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Old 01-02-2014, 05:08 AM   #16
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I have been investing in individual stocks since the early 1990's using DRIPs. If you are looking for stocks I highly recommend DRIPs.
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Old 01-02-2014, 10:25 AM   #17
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Damian,

if you are looking for long term investment and at your age, you want to be heavily into equities (stocks) with little or no bonds. You have lots of time for the market to rise and fall. I agree with the others on using an index mutual fund. One easy investment that I believe you could use with only $1200 is Vanguard Target Retirement 2060 Fund (VTTSX). The long time horizon means it invests in 90% equities. Better yet is to establish a Roth IRA using VTTSX as the investment in it. This only applies though if you are saving for retirement as you wouldn't want to pull the money out in 20 years. I believe you received other recommendations about having an emergency fund first but i don't remember if you have that currently.

Good luck on your future. You're a sharp young man to be starting so early!
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