Comments on: Managing The Risk Of A Dividend Cut With Allocations http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/ Dividend Investing & Value Investing For A Superior Portfolio Sat, 13 Mar 2010 17:56:50 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Derek http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2969 Derek Fri, 06 Feb 2009 06:15:13 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2969 Okay thanks. I just ran a backtest on Folio for 5 years and O was the better performer, O returning 20.02% vs NLY with 11.09%. Based on past 5 year returns, it looks like O is the better performer. I may do some more diligence on O, plus I like that they are returning income monthly, vs NLY which returns quarterly. I think NLY is a quality investment, but am always looking to improve. I also agree about yield chasing, for me, raw yield % isn't the best indicator, and a yield that goes too high to me is an indicator of something that isn't sustainable. Footnotes: 1) Folio says they use the "... Mid-Weighted Dietz Method to calculate returns on a daily basis and a Unit Value Method to calculate the aggregate performance returns over various periods of time." 2) "The performance of your holdings includes the reinvestment of cash distributions (dividends, capital gains, and return of capital)..." Okay thanks. I just ran a backtest on Folio for 5 years and O was the better performer, O returning 20.02% vs NLY with 11.09%. Based on past 5 year returns, it looks like O is the better performer.

I may do some more diligence on O, plus I like that they are returning income monthly, vs NLY which returns quarterly. I think NLY is a quality investment, but am always looking to improve.

I also agree about yield chasing, for me, raw yield % isn’t the best indicator, and a yield that goes too high to me is an indicator of something that isn’t sustainable.

Footnotes:

1) Folio says they use the “… Mid-Weighted Dietz Method to calculate returns on a daily basis and a Unit Value Method to calculate the aggregate performance returns over various periods of time.”

2) “The performance of your holdings includes the reinvestment of cash distributions (dividends, capital gains, and return of capital)…”

]]> By: Dividends4Life http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2966 Dividends4Life Thu, 05 Feb 2009 23:05:56 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2966 Derek: I don't own NLY and it has been many years since I ran an analysis on it. The REITs that I hold go back to my "yield chasing" days. At one time I held about 15, now it's down to around 3. Best Wishes, D4L Derek: I don’t own NLY and it has been many years since I ran an analysis on it. The REITs that I hold go back to my “yield chasing” days. At one time I held about 15, now it’s down to around 3.

Best Wishes,
D4L

]]> By: Derek http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2963 Derek Thu, 05 Feb 2009 19:00:34 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2963 D4L, Do you have any NLY in your portfolio? Did you evaluate NLY vs. O? D4L,

Do you have any NLY in your portfolio? Did you evaluate NLY vs. O?

]]> By: The Dividend Stock Life Cycle | Dividends Value http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2953 The Dividend Stock Life Cycle | Dividends Value Wed, 04 Feb 2009 11:43:28 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2953 [...] As we plan for out own death by buying life insurance and making final arrangements, we must have a plan in place for when inevitable happens and we must sell an under-performing dividend [...] [...] As we plan for out own death by buying life insurance and making final arrangements, we must have a plan in place for when inevitable happens and we must sell an under-performing dividend [...]

]]> By: Greenleaf http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2840 Greenleaf Thu, 25 Dec 2008 05:11:00 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2840 Hi,<br/>Nice blog. I am new in stock investing. I am looking for high dividend yield stocks too. <br/><br/>I have a blog to learn and teach stock trading. I hope that we could have a link exchange. :)<br/><br/>eBlog Entrepreneur:<br/>http://eblog-entrepreneur.blogspot.com/ Hi,
Nice blog. I am new in stock investing. I am looking for high dividend yield stocks too.

I have a blog to learn and teach stock trading. I hope that we could have a link exchange. :)

eBlog Entrepreneur:
http://eblog-entrepreneur.blogspot.com/

]]> By: Dividends4Life http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2839 Dividends4Life Wed, 24 Dec 2008 18:20:00 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2839 Dividend Tree: I think 5% will work for a while. At some point in the future I may limit my most risky stocks to a set dollar amount.<br/><br/>Bill M: I limit any given sector to 10%, except financial services which I limit to 15%. I don't target a specific sector, but look for the bst buys within the limits.<br/><br/>Best Wishes,<br/>D4L Dividend Tree: I think 5% will work for a while. At some point in the future I may limit my most risky stocks to a set dollar amount.

Bill M: I limit any given sector to 10%, except financial services which I limit to 15%. I don’t target a specific sector, but look for the bst buys within the limits.

Best Wishes,
D4L

]]> By: Bill M http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2838 Bill M Wed, 24 Dec 2008 16:27:00 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2838 D4L: How do you allocate between sectors, you still use the same method? D4L: How do you allocate between sectors, you still use the same method?

]]> By: Dividend Tree http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/comment-page-1/#comment-2837 Dividend Tree Wed, 24 Dec 2008 15:23:00 +0000 http://dividendsvalue.com/1510/managing-the-risk-of-a-dividend-cut-with-allocations/#comment-2837 D4L: Very well said - allocation based on dividend income! 2008 is showing the significance of appropriate metrics in asset allocation. I limit myself at 5% max of dividend income. D4L: Very well said – allocation based on dividend income! 2008 is showing the significance of appropriate metrics in asset allocation. I limit myself at 5% max of dividend income.

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