I was screening for my dividend watch list this morning, and saw several of my holdings had dropped off the list because my screening criteria eliminated them from the initial screening, i.e.; their dividend rates dropped. It may be time soon to lower my expectations for the 10% and higher monthly dividend portfolio to 9%, so that I have enough stocks to pick from. Shocker!
Screening for the quarterly portfolio may soon suffer a similar fate. Oh, the horror!
I did some preliminary work and having more symbols on the list makes more work but might also result in more choices and even higher returns. Here’s why I think the returns might get higher:
‘Everybody’ says high dividend yields are not sustainable and you should stick with ‘safe’ investments. Ultimately, it’s your own choice, though. My choice is to investigate higher dividend yields and while I also believe some of the ‘hype’ about ‘safe’ investments I also think there might be a ‘sweet spot’ of higher dividend yields. I just want more than 2% or 3%, is that so bad? Even 5 or 6% isn’t enough to live on, when you consider inflation and the fact that only the rich get richer because they take more from all of us. I can’t change that, but I can change what I make. I want better returns. I expect better returns. I deserve better returns.
Plain and simple. If you want better returns, you must seek them out. They will not seek you out. In fact, if you even believe in ‘the plan’ at all, then you must acknowledge that the system is designed to ‘sell’ you on a lousy return, and take even more money from you.
I’m all set with that.
We got a flyer in the mail the other day advertising the best savings bank in America boasting about their 0.80% Annual Percentage Yield. Boasting? WTF, Seriously? Bah!
Financial advisors would advise against what I do. I would also advise you not to do what I do, because I’m not advising anybody to do anything!
I think that I will see consistent, higher returns and I will soon see the results on my results page. I would caution against using 1, 2, or even a 3 month time-frame to judge a strategy like this. However, I should be able to see good returns and have a nice monthly income from dividends to boot! At least, that’s the plan…
I wanted to take a little time to explain how I use the screening spreadsheet for my pre-buy list, against which I perform some more due dilligence and even more chart work to determine if I want to buy them or wait a bit. More on that later…
OK, so to sum it up so far; I screen on dividend.com for 10% and higher monthly paying dividend stocks and add those symbols to my watch list. I do the same thing for 14% and higher quarterly paying dividend stocks and add those symbols to the same watch list.
Then, I edit my dividend symbols list on the thinkorswim software, and check the 1 year weekly charts for price trends on both the 1 year period as well as the 21 week period. Then I check the 3 month daily charts for price trends on both the 3 month period as well as the 21 day period.
I made some crappy videos in an attempt to explain my processes further. They are available on the video section of my website/blog/internet thingie.
All of this information goes on the spreadsheet(s), under Watch Lists here on the blog. I update it at least once a day for the daily action, and weekly for the weekly action.
Take a look at the spreadsheet you can see a list of symbols followed by their price trends for 1 year, 21 weeks, 3 months, and 21 days. Following that you can see action indicators. THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANYTHING, THIS IS ONLY WHAT *I* DO! Read that last statement again, and understand it. If you buy or sell anything anywhere at any time and claim that you did it because of something you read here and it doesn’t work out well for you, you are out of luck. You’re on your own there, Sparky! I’m not a financial planner, or advisor, or anything of the sort. I’m just a guy. A guy trying to make a little money investing and trading. I’m also trying to show you what and how I do what I do. I also post results for MY OWN BENEFIT ONLY! You are free to be entertained by this blog and all the information provided by it, but you are ultimately responsible for your actions.
Now, where was I? Oh, yeah, the spread sheet…
Ok, so now I have my spread sheet and I can now see at a glance how the trends are represented for each period. Over time, as it changes, you can see cycles and trends and other neat stuff.
I look at the action indicators, and the way I would interpret them for my pre-buy list is like this;
Read right to left, starting with the shortest time period;
- if the last time period is different from the previous time period, that would probably be a HOLD because the trend may be changing. But, check back tomorrow because it could be different. You know how the market is; fickle!
- if the last time period is the same as the previous period, then it would be an indidicator to either BUY or SELL a starter position
- extending the time period one column to the left, if the last 3 time periods are the same, then it would be an indidicator to either BUY or SELL a position
- extending the time period one more column to the left, if all 4 time periods are the same, then it would be a clear indidicator (to *me*, anyway!) to either BUY or SELL a position
That would be the conservative version, here’s a more aggressive interpretation;
Read right to left, starting with the shortest time period;
- BUY INDICATORS
- if only the last indicator is a BUY, that might be a signal to initiate a 10% starter position
- if only the last 2 indicators are a BUY, that might be a signal to add a 20% position as well as the 10% starter position for total position size of 30%
- if only the last 3 indicators are a BUY, that might be a signal to add a 30% position as well as both the 20% position and the 10% starter position for total position size of 60%
- if all 4 indicators are a BUY, that might be a signal to add a 40% position as well as the 30% position and the 20% position and the 10% starter position for total position size of 100%
- SELL INDICATORS
- if only the last indicator is a SELL, that might be a signal to sell 40% of position for a total position size remaining of 60%
- if only the last 2 indicators are a SELL, that might be a signal to sell another 30% of position for a total position size remaining of 30%
- if only the last 3 indicators are a SELL, that might be a signal to to sell another 20% of position for a total position size remaining of 10%
- if all 4 indicators are a SELL, that might be a signal to to sell the last 10% of position for a total position size remaining of 0%
- POSITION SIZING
- if only 1 indicator in any position is a BUY, then MAXIMUM position size might be 10%
- if only 2 indicators in any position is a BUY, then MAXIMUM position size might be 30%
- if 3 indicators are a BUY, then MAXIMUM position size might be 60%
- if all 4 indicators are a BUY, then MAXIMUM position size might be 100%
- if only 1 indicator in any position is a SELL, then MAXIMUM position size might be 60%
- if only 2 indicators in any position is a SELL, then MAXIMUM position size might be 30%
- if 3 indicators are a SELL, then MAXIMUM position size might be 10%
- if all 4 indicators are a SELL, then MAXIMUM position size might be 0%
- when no data exists for a time period, no entry is made and the display indicates ‘-’ (sans quotes), resulting in no action indicator
- when the trend for a time period is flat, no entry is made and the display indicates ‘-’ (sans quotes), resulting in no action indicator, which would probably be a HOLD since no action is indicated
- ALWAYS check and re-check everything to remove redundancies!
- ALWAYS check and re-check everything!
I hope this helps, and that you enjoyed reading and also that you were thoroughly entertained and if not then don’t read.
More on the subject line; “How to lower expectations for higher returns”…
I was just thinking this could extend into other areas outside of investing. Let’s say you’re going on a blind date and you’re expecting to meet someone who’s really hot and thinks you are DA BOMB and all that and is willing to submit to your every whim and fantasy. Now suppose this person doesn’t exactly meet your standards and expectations so what happens? You are disappointed, of course. That means you are not happy. I don’t know about you but I would rather be happy than sad. Now let’s suppose you get another blind date and your expectations are a bit lower than your last date, but you’re still disappointed but not nearly as unhappy as the last date. So, what did you learn? Time goes by. Now you’re ready for that third date and your expectations are lower than the last 2 dates and the date goes well, but not real well, but at least you’re happy but for various reasons you both decide to continue to ‘see other people’. Ok, so you got no ‘steady’ but at least you’re happy. Then you start thinking “Hey what if I had realistic expectations instead of fantasizing about ‘my dream date’?” Well, along comes an opportunity to test that theory and somebody fixes you up on a date. Your expectations are lower than the last few dates but, hey, you’ve got standards! So anyway you go on this date and let’s say you do something really quirky like go roller skating for your first date and you’re holding each others’ hands and skating around and laughing and having fun and supporting each other and then you finally end the evening with a kiss on the hand and a hug. You both decide to pursue it further and things develop. What turned out to be a date with more realistic expectations could turn out to be a lifelong partnership where you both prosper and are happy, far exceeding your original expectations. Wouldn’t that be wonderful?
so far, it is quite wonderful indeed…
Many happy returns!
#HYHRD High Yield
High Return Dividend Portfolio