Dividend Investing: Concise & 2nd Edition

Here is a simple screen to find these stocks. First find the stocks that have dividend rates more than 2% (about half of all S&P 500 stocks). Take out those sectors that give dividends as a return of equity (REITs and many partnerships). Eliminate the stocks with bad fundamentals such as high expected P/E (and earnings is negative), high debt (compared to companies in the same sector), etc. Next ensure that they have a good history of maintaining or increasing dividends (i.e. dividend growth). As of 5-2014, it has been working well for the last five years. Be cautious on bank stocks, the drug companies, the miners and the insurers. I ignore foreign companies and ADRs (those foreign companies listed in the U.S. exchange). I prefer larger companies.However, when a strategy is over-used, it may not work any longer. There may be a mild bubble on these dividend stocks due to too many followers. We will discuss how to protect our dividend portfolios. In addition, we should not buy (actually should sell most stocks you own) stocks during a market plunge. Since 2000, we have two market plunges with an average loss of over 45%. We hope to have a maximum loss of 25% instead of 45%; most techniques depend on price movements and hence we cannot detect the peaks and bottoms. There are at least three variations on dividends:1.Dividends given to stock owners (registered on and before the ex-div date).2.Covered Calls. You can receive dividends while 'renting' your stocks.3.DRIPs, Dividend Reinvest Plan.http: //en.wikipedia.org/wiki/Dividend_reinvestment_plan This book started with Market Timing. When the market is going to plunge, most stocks including dividend stocks will lose values. Hence, do not buy any stocks and even sell most stocks when you receive the exit signal. I have a simple chart to identify market plunges. It depends on the stock data, so it will not identify the peaks and the bottoms precisely, but it will spare you for further losses and will instruct you when to reenter the market. It worked for the last two market crashes. It will detect the next crash, and hopefully it will give us enough time to react as the last two.The selected web site identifies stocks with good dividends. Ignore those purchases that do not meet our initial requirements. We should have identified a few stocks for further evaluation. I use fundamental metrics to ensure they are fundamentally sound. Many fundamental analyses are available free from many sites. Then look for intangibles and do a thorough qualitative analysis on each selected stock. There is no magic formula, but due diligence will pay off in the long run. This book does not promise overnight wealth. Other topics include how to set order prices, stop loss, tax considerations and a trade plan. When to sell a stock is important. Technical analysis is used sparingly but it could be very useful. Periodically review your big losers and big gainers to see whether any lessons to be learned.As in any strategy, you need to start with paper testing and then with limited positions. There are many pitfalls in following insider purchases. It is safer to buy stocks with good fundamentals and protect the losses with stops. Initial date: 06/2020Last update: 01/2021Size: 60 pages (6*9)