My apologies for not writing in awhile. I have been very busy as of late, and can officially say I am now I proud homeowner as well. Pretty cool!
In other news, my wife and I have been all around the country for the holidays to see my family (nothing like driving 1359 miles in one day! It is definitely a different feeling, let me tell you, when you hear your GPS say "continue 520 miles on I-40"). Things are finally now starting to settle down affording me the time to write once again.
Anyway, those who have followed the latest posts on DividendPartisan know that I have recently been selling my "dividend" paying holdings in an attempt to amass enough capital to effectively participate in the day trading game. Many warned me; many even openly disagreed with me in my divergence from the safe dividend stalwarts that used to make up my portfolio. And I appreciate their honesty and caution. Let me be the first to stay that day trading has some "stressful" moments! That said, however, I cannot be more pleased with my results thus far. I hesitate to say this for fear of sounding like I'm bragging, but so far this month I have already earned $697 dollars. Praise God for that; goodness. And with 16 trading days left this month, it is possible I will break $1000.
Consequently, it is hard to understand why I would stick with a 100% dividend strategy that would have only earned around $170 this month.
Nevertheless, I made my final two sales within the last several weeks and am excited to have this new part of my strategy now going full steam. The following two companies were the last on my "sell" list:
Waste Management (WM): Waste Management is another great dividend company, and was part of my "Original Six" companies that I purchased back in the beginning of 2010 that I have frequently written about. It has been paying higher dividends for 9 straight years and currently yields a large 4.17% dividend. Hands down a great company for the long term investor in my opinion. And I doubt trash removal from the largest waste service provider is going anywhere anytime soon. Nevertheless, with WM only making up around 6% of my portfolio, and its slow capital growth, I decided to sell.
General Electric (GE): General Electric slashed it's dividend back in early 2009 and many people were pissed, to be honest. I felt that it would restore it's dividend as it's balance sheet improved, and held around 150 shares patiently waiting. Fortunately GE has done just that, and has raised its distribution several times in 2011 alone. Nevertheless, I got somewhat impatient with this particular stock, and sold a little too early in this stock's recent price increase. As a result, I earned very little in capital gains, but was thankful for the 3.5% or so yield as a shareholder.
Well, that is the end of the dividend selling, I can assure you. This leaves me with 5 great dividend paying companies: Abbott Labs (ABT), Johnson and Johnson (JNJ), Proctor and Gamble (PG), Realty Income (O), and Anworth Mortgage (ANH).
What are your thoughts? I'd love to hear them as I've tried to be completely open and honest with my change in strategy.
Take care,
DividendPartisan
Hi DP,
ReplyDeleteI disagree with your shift from dividend investing to day trading, but I appreciate your openness about it. When I first started investing last year I tried a bit of swing trading and found I just didn't have the time or the nerves for it. It exceeded my personal risk tolerance and it didn't seem like a good way for me to be handling my money. That's why I quickly abandoned it and made a complete transition to dividend-growth investing. Granted, dividend-growth investing may not be as exciting as day trading and it generally doesn't produce dramatic gains in a single day, but it also doesn't produce dramatic losses and it generates a steady, growing stream of income regardless of what's going on in the market.
I hope your new approach works out for you, but I also hope you exercise a great deal of caution. I have come across some real-life horror stories of people who wiped out their savings by day trading despite having great initial success. Be disciplined with how you go about it and be sure to put aside some of your profits.
Good luck!
Deedubs,
ReplyDeleteI appreciate the comment. Swing trading is an interesting strategy; somewhat similar to what I am trying to accomplish I guess.
I am still an avid dividend investor and believe in its merit over the long run, definitely. In fact, I have been withdrawing all day trade gains and plan to eventually fully 'refund' if you will my portfolio with large dividend holdings. For now, however, I think I can generate higher returns hopefully and do not "need" the income at this point in my life.
Please keep in touch,
DivPartisan
you'll give all back, mark my - tom
ReplyDeleteTom,
ReplyDeleteI'm assuming you meant to add "words" at the end of your statement?
Why do you say that?
DivPartisan
I'm loving the day trading updates. Please keep them coming. Are you still trading the same stocks, AMR, Ford, Sirius ?? Or were you trading different stocks last week? How many trades did you make last week?
ReplyDeleteSlim,
ReplyDeleteThanks for the encouragement! I have traded Ford twice and Sirius once. AMR was delisted from the NYSE. :) I've got several other stocks that I may trade in the future, but just three trades thus far in JAN. Do you day trade at all?
DivPartisan
Ahhh, I see. I didn't know AMR was dropped off the NYSE. I am a Canadian and I'm not trying to sound ignorant but I really only follow the Toronto Stock Exchange because I feel more comfortable putting my money in to companies I really know, which just happen to be Canadian companies. I currently do not day trade. I did day trade for a while a few years ago and I did actually have some success. The problem was that I didn't really have a plan. Some days I made money, other days I lost money, but overall I did make money. I do think about trying it again but I don't really know what to look for when day trading. I guess I should do some reaseach and read some books if I want to approach it again. You sound like you have a well thought out strategy though. If it works great! If not well then at least you gave it a try. Risk vs. Reward.
ReplyDelete