(03-27-2015, 10:24 AM)crimsonghost747 Wrote: And as an added bonus found one interesting company in that list of yours. I'll dig deeper into it when I have the time.
Come on, you aren't going to leave us hanging on which one caught your eye now are you?
(03-27-2015, 10:33 AM)earthtodan Wrote: About half my portfolio is in stocks yielding less than 2%. I've learned to think of dividends as just one way a company makes money for shareholders. I still chase yield in my Roth IRA to capture the tax advantage, but I'll take total shareholder yield (dividends plus buybacks) and growth in my taxable account, even though that makes my total returns subject to market whims in the short to medium term.
Edit: The weighted average yield of my taxable account is 1.3%. The needle may move up a tick when GILD starts paying dividends.
The vast majority of the stocks I own are in tax sheltered accounts, so I guess I don't take taxes into consideration at all with my picks. I do agree with your strategy though with higher yields in IRA and capital gains picks in taxable account.
In my public portfolio I have 50 stocks, 13 of which are currently paying less than 2%. Current overall yield of the portfolio is 2.83%.
(03-27-2015, 09:49 AM)Roadmap2Retire Wrote: Nice article, Eric. It is a problem when investors ignore potentially great investments just because of a low starting yield. I have done this myself and missed on some great opportunities simply because the starting yield was < 1%.
I guess it makes more sense now than ever - in this low yield and negative yield environment.
I used to put a higher weight on yield, then came around the realization that I don't need the income for another 25 years so why not try for some capital gains as well. It's in a tax sheltered account, so no worries about paying taxing on gains down the road on capital gains. I can swap out to higher yielding stocks and go on my merry way.