Half a million to invest

[rworell]

Hey everyone, I had a variable annuity that is done and thankfully it grew very well the last two years. I now have approximately $550 thousand and was thinking of dividend stocks to earn passive income and still grow. I know “0” about them but it seems to be a great way to go. Thoughts

Thank you all
Rich

 

[njhowie]

You're going to get a lot of replies, and you'll likely be pointed to prior threads on the topic, as it comes up fairly frequently.

My number one suggestion is to not put it all in one place. Even if you have an area that you want to focus with the funds, diversify within that space.

One place (of many) where you might consider putting a portion is FGRIX - Fidelity Growth and Income fund. It has a good mix of dividend payers as well as growth.

https://fundresearch.fidelity.com/mutual-funds/summary/316389204

 

[Dash man]

Hey everyone, I had a variable annuity that is done and thankfully it grew very well the last two years. I now have approximately $550 thousand and was thinking of dividend stocks to earn passive income and still grow. I know “0” about them but it seems to be a great way to go. Thoughts



Thank you all

Rich

The best dividend stocks are those that increase their dividends each year and have done so for many years. One thing to look for is if they increased their dividends during the 2008 recession.
Don’t just go for high dividends, because that doesn’t mean they won’t just cut them if times get rough.
Check out the dividend payout ratio comparing income to dividend.

 

[Car-Guy]

Lot's of issues.... Individual stocks or ETF's, reinvest the dividends and buy more stock or take the cash, etc etc.... Risk profiles of the companies you are buying (just like stocks), time horizons, taxes, etc. And of course you can still lose principal and/or the dividends can get cut big time.... (check out GE for a case study in how to lose principal and dividends over the past ~20 years.) In general, from my POV, market's and dividend payments "seem" to be pretty dang high now for a lot of companies. But,YMMV.

 

[chassis]

Hey everyone, I had a variable annuity that is done and thankfully it grew very well the last two years. I now have approximately $550 thousand and was thinking of dividend stocks to earn passive income and still grow. I know “0” about them but it seems to be a great way to go. Thoughts

Thank you all
Rich

What is your age, investing time horizon, and volatility tolerance?

 

[rworell]

I retired young at 51. I’m now 54. I have “0” debt and also have about $75,000 liquid too. Wife and I are full time RVers. She too has the same amount as I but we want to do what’s best.

 

[Out-to-Lunch]

was thinking of dividend stocks to earn passive income and still grow. I know “0” about them but it seems to be a great way to go. Thoughts

As njhowie has indicated, this is an oft-discussed topic. There is no particular reason to believe that an investment portfolio that is focussed on dividends will outperform one that focusses on total growth, or one that just invests in the broad market.

 

[chassis]

I retired young at 51. I’m now 54. I have “0” debt and also have about $75,000 liquid too. Wife and I are full time RVers. She too has the same amount as I but we want to do what’s best.

Thanks. Congratulations on early retirement and zero debt. My preference is strong equity exposure, strong growth exposure. Dividends are declining in importance in the market, lots of data on this. Bonds are dead for the foreseeable future.

Capital appreciation in today's era is via equities or "special" investments such as businesses or real estate.

What is your volatility tolerance?

 

[rworell]

Thanks. What is your volatility tolerance?

I’m all in and not scared... I’m still young enough to have tome to recoup if needed

 

[explanade]

Invest the whole amount at once or DCA?

 

[yakers]

Another issue is how active you want to be in managing your portfolio. At 51 and inerested maybe no issues but I am 70+ and DW a bit more and I favor keepng things simple which suggests 3, 2 or even one fund. It can be passive like VG Balanced VBIAX or active like VG Wellington and a lot of other choices. Vanguard (and otheres) have specific funds and ETFs that focus on dividend growth (VIG) but I would think the important issue is how does it all fit your collective portfolio and how much do you want to manage.

 

[Time2]

The best dividend stocks are those that increase their dividends each year and have done so for many years. One thing to look for is if they increased their dividends during the 2008 recession.
Don’t just go for high dividends, because that doesn’t mean they won’t just cut them if times get rough.
Check out the dividend payout ratio comparing income to dividend.

There are the Dividend Aristocrats, 25 or more years of increasing dividends.
https://money.usnews.com/investing/stock-market-news/articles/dividend-stocks-aristocrats
I want to choose how my income comes. Maybe after I take SS and have RMDs, I'll think differently, but probably not. They would be OK in a tax deferred account.

 

[chassis]

I’m all in and not scared... I’m still young enough to have tome to recoup if needed

Invest it all "at once" or as soon as practicable. Don't wait for a bell to ring indicating it's time to invest. There is no bell, except for March 2020.

I like growth stocks. I like to pick my own stocks. Stock picking is a thread unto itself.

Set numerical (dollar amount) target goals for your portfolio by age. You are retired, and you should still have goals. What is your annual withdrawal rate? Do you want to leave a legacy for the next generation? Is market performance enough for you to meet your goals? See first sentence in this paragraph.

 

[easysurfer]

Do an inventory of your target allocation and current allocation. Use the 550K to fill in the blanks to reach the target.

 

[53anddone]

Will you hold these stocks forever and not care about the share price fluctuation? If that's the case I would look at the aristocrats and see if any of them are selling at a discount to their historical pricing and slowly buy. Don't expect to average better than 3-4% if you want quality.

Unfortunately, great dividend payers like KO, JNJ, MMM, Etc. are not cheap at the moment.

Might be wise to pick 10 good companies and nibble at them over the coming months until you slowly build up a portfolio.

 

[FREE866]

I’m all in and not scared... I’m still young enough to have tome to recoup if needed

If that's the case low cost major market index ETF's are your best bet.


SPY
IWM
QQQ

 

[FREE866]

What is your age, investing time horizon, and volatility tolerance?

Yep. Except "age" is a tricky one. You could be 50 years of age with major health issues and you'd probably have a shorter investment time horizon than a 60 year old with excellent health.

 

[DangerDad]

That’s a substantial amount of $$ to invest.
Do you have an Investment Policy Statement to help guide your selection?
Do you have a target Asset allocation?
I suggest you address these questions before selecting a specific fund or ETF.
Cheers,
DangerDad

 

[VanWinkle]

Dividends, safety due to ballast(bonds) and a great track record. Look at Wellesley and Wellington funds from Vanguard. Low costs, great management and track record, low maintenance. Both pay a decent yield but they are not tax efficient if that's a concern for you.

VW