I have a TA project I’m working on. I’m using oversold indicators to help me time purchases in a handful of high dividend paying stocks, and then periodically rebalancing the portfolio or even completely selling off a holding based on whether the TA is telling me the stocks are about to move up or move down. Since the money is invested in high dividend stocks almost constantly and I’m making money on the cycles, it seems to work. The cycles only make 5% or so, but can do it 3 to 7 times a year, so when you add in the incidental dividend payouts it seems 25 to 35% annually is possible. thoughts or opinions?
The high-div angle is a wash. I'm slowly rotating out of my high div portfolio, because they are lagging the tech leaders which pay none. Let's face it...You can pay me all the dividends you want, but if your POS stock price drops below the realized profit level of the divided when I want to exit? Then what was the fucking point? The short-term Capital gain tax would have equaled or exceeded the long-term when your POS stock price dropped 10%, so whateva.
I guess I should clarify that I am following high dividends stocks that are reasonably stable. By “reasonably stable“, I mean, larger companies that are not paying out dividends beyond their ability to do so, and essentially giving away their value. The stocks I’m following seem to be relatively stable over the long term, because if they go down too much, the buyers snap them up for the dividends, and if they go high enough, the buyers stop seeking them out or take profits. That’s why I’m interested in these…they seem to be more predictable when it comes to reversals. The dividend is gravy…they’re easier to predict behavior is why I am playing them. MO does not behave like Microsoft.
I have never collected a dividend as far as I know and never cared. I ran the numbers and they're basically garbage. If you're going to park your money for like 4% on a stock that barely moves You might as well just buy a property and rent it out. At least then you'll get decent capital gains. Now if you get a high cagr and 12% then maybe, but you risk getting trapped as was mentioned by overnight.
You’re not understanding what I’m doing. High dividend stocks behave differently than typical Market Darlings. TSLA can be so overbought that it can fall for a long, long time. Whereas a good utility stock will only fall so far before the dividend percentage makes it too attractive to buyers…therefore reversals are easier to spot/predict…so you make money on the behavior of the stock, not just the dividends. FYI: I’m over invested in real estate…no complaints.
How many stocks in the portfolio? Dogs of the Dow has 10 I believe. Does the criteria have a minimum dividend, need to be a dividend aristocrat or any other filters?
You can't be overinvested in real estate since all real estate is local. That is assuming you have fully paid real estate and are geographically dispersed.