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bUy tHE Dip Br0 (Page 1 of 2)
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Posted: 5/1/2022 6:04:32 PM EDT
Well who's buying it?
Link Posted: 5/1/2022 6:26:39 PM EDT
[#1]
I bought a little
Link Posted: 5/1/2022 6:49:15 PM EDT
[#2]
Link Posted: 5/1/2022 6:53:23 PM EDT
[#3]
Intelligent investors are.
Link Posted: 5/1/2022 6:59:53 PM EDT
[#4]
Every payday and I'm dollar cost averaging 100k over 5 weeks...
Link Posted: 5/1/2022 7:30:25 PM EDT
[#5]
i am buying the dip. never thought about it until now. i consider buying the dip something i do in a bull market.

i think the term trying to catch a falling knife is for a bear market. and yes i'm trying to catch the falling knife also, over and over.
Link Posted: 5/1/2022 10:04:46 PM EDT
[#6]
Big time. A bit over 200k since Jan.
Link Posted: 5/1/2022 10:09:58 PM EDT
[Last Edit: Greenspan] [#7]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Low_Country:
Intelligent investors are.
View Quote


I'm not. I dont think this is the end. I got out at the top. I normally do buy the dip. Deployed everything on the pandemic dip and sold it all DEC Jan
Link Posted: 5/1/2022 10:11:18 PM EDT
[#8]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Joe_Blacke:
Big time. A bit over 200k since Jan.
View Quote


Why not all that on the pandemic plunge? Did you build an extra 200 since?
Link Posted: 5/1/2022 11:29:18 PM EDT
[Last Edit: Joe_Blacke] [#9]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


Why not all that on the pandemic plunge? Did you build an extra 200 since?
View Quote


If you are referring to 2020, I did the same.

Dollar cost average. 80% of the time a lump sum strategy will win over a 10-12month DCA. However that 20% where DCA wins, it will really save your behind. Also you have to consider taxes on market recovery.

If it drops more, I’ll add more.
Link Posted: 5/2/2022 9:17:32 AM EDT
[Last Edit: Speedwinder] [#10]
In the average month my stocks pay $1,400 in dividends into my accounts and are set to automatically buy more stocks (drip). I have been doing this for many years.

Other then that, I am waiting until things get really scary to buy from extra cash I have. May not be the best plan, but it works for me.
Link Posted: 5/2/2022 10:43:41 AM EDT
[#11]
I've been selling everything that's up and will wait to buy until I see interest rates start to level off. This isn't really much of a dip yet. I dumped most of my oil stock this morning because I think we are headed into a recession, and that will drop oil prices. A lot of other stocks I watch have been getting hammered after missing earnings also.
Link Posted: 5/2/2022 2:54:09 PM EDT
[#12]
If you have a long time horizon, volatility is your friend.  Of course you buy when things are on sale.  Why would you ever pay full price?  


Link Posted: 5/2/2022 3:09:11 PM EDT
[#13]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:
If you have a long time horizon, volatility is your friend.  Of course you buy when things are on sale.  Why would you ever pay full price?  


https://awmtee.com/2021/Buy-The-Dip-Meme-Stock-Shirt-long-sleeved.jpg
View Quote


This is a big assumption that it is on sale. Why buy 10% off if tomorrow is 50% off?
Link Posted: 5/2/2022 3:14:09 PM EDT
[#14]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:
If you have a long time horizon, volatility is your friend.  Of course you buy when things are on sale.  Why would you ever pay full price?  


https://awmtee.com/2021/Buy-The-Dip-Meme-Stock-Shirt-long-sleeved.jpg
View Quote


This is a big assumption that it is on sale. Why buy 10% off if tomorrow is 50% off?
Link Posted: 5/2/2022 3:25:54 PM EDT
[#15]
Well that little pump there in the last 10 min cost me thousands.  

anyways. I go all in spy 390.
Link Posted: 5/2/2022 3:34:13 PM EDT
[#16]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


This is a big assumption that it is on sale. Why buy 10% off if tomorrow is 50% off?
View Quote


Attachment Attached File
Link Posted: 5/2/2022 4:26:49 PM EDT
[#17]
Well the dip bros got in at the last second
Link Posted: 5/3/2022 11:37:55 AM EDT
[Last Edit: LastDefender] [#18]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


This is a big assumption that it is on sale. Why buy 10% off if tomorrow is 50% off?
View Quote



It is an assumption based on historical precedent.  None of us are smart enough to call the bottom of a market cycle.  If we do, its more dumb luck than brilliance.  But you can effectively average down (dollar cost average) as prices drop.  Please note I am not necessarily recommending this be done with individual equities but with diversified mutual funds or ETFs like an S&P Index 500 fund.  

As you can see in the graph below, if you have a long enough time horizon, buying the dip is a prudent strategy.  Yes there are times when the dip keeps dipping but not in perpetuity.  Remember the chart below does not account for re-invested dividends. So if I buy a fund that has dropped in price and it drops further the next day I understand that I a merely one day closer to it's retrenchment and eventual reversal.  Meanwhile I re-invest the dividends and build more shares.  Investing takes patience and discipline.  These are two things in very short supply with many who use stocks, bonds, etfs and mutual funds to build wealth.


If you invested $100 in the S&P 500 at the beginning of 1965, you would have about $26,904.86 at the end of 2022 (estimated), assuming you reinvested all dividends. This is a return on investment of 26,804.86%, or 10.27% per year.  Not too bad.  


Good luck in your journey



Link Posted: 5/3/2022 3:16:48 PM EDT
[Last Edit: Marcus99] [#19]
I too have been trying to take advantage of the dip, it's been a great full-on crash course in investing during volatile periods. I've honed in on established dividend paying companies currently struggling or experiencing reduced valuations for one reason or another that have seen fairly significant declines in share prices this year, but which I see being resolved longterm. I'm willing to hold these positions for years - decades - so I think it's a fairly sound strategy using time-in to offset short term paper losses as risk. Intel, Verizon, 3M, OHI, Comcast and AT&T to name a few. I'm also watching SUI, Lowe's, AWK and Nike closely for deeper dips as I think they're undervalued but with good longterm prospects, and given further decline can represent smart long buys.
Link Posted: 5/3/2022 4:32:01 PM EDT
[Last Edit: LastDefender] [#20]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Marcus99:
I too have been trying to take advantage of the dip, it's been a great full-on crash course in investing during volatile periods. I've honed in on established dividend paying companies currently struggling or experiencing reduced valuations for one reason or another that have seen fairly significant declines in share prices this year, but which I see being resolved longterm. I'm willing to hold these positions for years - decades - so I think it's a fairly sound strategy using time-in to offset short term paper losses as risk. Intel, Verizon, 3M, OHI, Comcast and AT&T to name a few. I'm also watching SUI, Lowe's, AWK and Nike closely for deeper dips as I think they're undervalued but with good longterm prospects, and given further decline can represent smart long buys.
View Quote



Smart individual choices; one thing to be mindful of is Comcast, ATT and Verzion are all in the same sector.... for those who don't want to put the work in ETF's like VYM, SCHD, VOO, and VIG are good choices.
Link Posted: 5/3/2022 4:35:17 PM EDT
[#21]
Posts 2,3 and 4 nailed it.
Buy a certain amount every week or month or quarter. Whatever you want.
You will NEVER buy at the bottom and sell at the top. Just won't happen. So buy in both directions. (I'm talking about long term accounts)
Link Posted: 5/3/2022 4:37:27 PM EDT
[#22]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By wvar15:
I've been selling everything that's up and will wait to buy until I see interest rates start to level off. This isn't really much of a dip yet. I dumped most of my oil stock this morning because I think we are headed into a recession, and that will drop oil prices. A lot of other stocks I watch have been getting hammered after missing earnings also.
View Quote


Your biggest problem is "thinking".
Stop trying to think or guess what the market will do.
Link Posted: 5/3/2022 4:41:43 PM EDT
[Last Edit: lazyengineer] [#23]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


I'm not. I dont think this is the end. I got out at the top. I normally do buy the dip. Deployed everything on the pandemic dip and sold it all DEC Jan
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Originally Posted By Greenspan:
Originally Posted By Low_Country:
Intelligent investors are.


I'm not. I dont think this is the end. I got out at the top. I normally do buy the dip. Deployed everything on the pandemic dip and sold it all DEC Jan

Ok, so what's your plan?  Leave it as cash in the bank?  Cash in the bank going to have a lower loss rate over the next 12 months than stocks?  

Maybe, but you KNOW $100k in the Bank will be the equivalent value of being $90k in the bank a year from now.  Do you feel like Boeing Airlines, Dow Chemical, Ford Motor, or GE will be worse?  Maybe, but that's a guess, whereas you know for sure you are losing wealth at the highest rate since Carter, if kept as cash (or bonds even)
Link Posted: 5/3/2022 4:41:46 PM EDT
[#24]
Every 2 weeks.  Over the last 25 years that has worked really well for me.
Link Posted: 5/3/2022 4:56:52 PM EDT
[#25]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:



Smart individual choices; one thing to be mindful of is Comcast, ATT and Verzion are all in the same sector.... for those who don't want to put the work in ETF's like VYM, SCHD, VOO, and VIG are good choices.
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Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:
Originally Posted By Marcus99:
I too have been trying to take advantage of the dip, it's been a great full-on crash course in investing during volatile periods. I've honed in on established dividend paying companies currently struggling or experiencing reduced valuations for one reason or another that have seen fairly significant declines in share prices this year, but which I see being resolved longterm. I'm willing to hold these positions for years - decades - so I think it's a fairly sound strategy using time-in to offset short term paper losses as risk. Intel, Verizon, 3M, OHI, Comcast and AT&T to name a few. I'm also watching SUI, Lowe's, AWK and Nike closely for deeper dips as I think they're undervalued but with good longterm prospects, and given further decline can represent smart long buys.



Smart individual choices; one thing to be mindful of is Comcast, ATT and Verzion are all in the same sector.... for those who don't want to put the work in ETF's like VYM, SCHD, VOO, and VIG are good choices.


Yep I considered that. I’m only putting an estimated $2.5-3k into that sector via those three stocks, so my exposure isn’t huge. My approach is that if I’m wrong then my losses are pretty low, but if I’m right and the sector rebounds then I’ll have solid gains with dividend payments too. And if one or two of those three players do well while one or two of those players struggle then at least I’m shielded somewhat within that sector. With AT&T being so cheap it’s hard to resist, I have an alert set for when it hits $19.

I also suspect that over the next 5-10yrs these companies are going to find new means of inorganic growth beyond streaming subscription services. 5G implementation is huge, and in the grand scheme of things losing a few hundred thousand customers isn’t a big deal longterm. Competition being so fierce will keep them hungry ensuring growth.

Maybe I’m wrong, but I don’t think so.
Link Posted: 5/8/2022 3:55:36 PM EDT
[#26]
I buy twice a month or once a year.  For things like HSA and IRA, I typically max it out right at the beginning of the year.  401(k) money goes in twice a month.  This does not change based on what the market happens to be doing at the time.  I buy on schedule, up or down, and don't pay attention to the price.

I try not to watch the overall value and net worth, too, but I can't resist the temptation to peak at that once in a while.
Link Posted: 5/8/2022 4:02:58 PM EDT
[#27]


An extra 2 grand a month since March.
Link Posted: 5/8/2022 4:03:39 PM EDT
[#28]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Joe_Blacke:
Big time. A bit over 200k since Jan.
View Quote


Sheesh! Where have you had it?
Link Posted: 5/8/2022 9:21:08 PM EDT
[#29]
The DJIA is up 57% over 5 years ago, but because of a 6-month slide people think the end is nigh. Buy the dip. Buy the peak. Buy whatever, but stay in the market. You'd have thought I was on bath salts if I told you in 2018 that the DJIA was going to have average gains of 2K points a year for the next four years, but that's what's happened. Long view, baby.
Link Posted: 5/9/2022 4:22:17 PM EDT
[#30]
S&P dropped 3.2% today…wow. Nevertheless it was a good day for shopping, I bought into Starbucks and Nike.
Link Posted: 5/12/2022 10:54:28 AM EDT
[#31]
Link Posted: 5/12/2022 11:21:01 AM EDT
[#32]
Link Posted: 5/12/2022 12:37:59 PM EDT
[#33]
I was going to buy a drone to film a work project (I design pools).  But I felt I couldn't miss buying some stocks I've been watching.  Hopefully it pays off.  Worst case is I lose everything and have to tape my phone to a stick to get overhead footage.
Link Posted: 5/20/2022 9:50:36 AM EDT
[#34]
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle
Link Posted: 5/20/2022 10:20:02 AM EDT
[#35]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle
View Quote
Stuck to my plan tight stops.  All good so far.  Bounce around ~385-405 for a week or so then move up.  

Keeping close eye though. Market looks weak. If we break 382 we test weekly ema200 @~360
Link Posted: 5/20/2022 10:23:51 AM EDT
[Last Edit: LastDefender] [#36]
I continue to buy the dip.  Why wouldn't I?  I believe in the capital markets and that they will be higher in years to come.  So for me, I am buying stocks, ETF's and Funds at a cheaper price today than last month.  Also, I am locking in higher dividend rates to boot.  A double win for me.

Will stock values continue to decrease?  Perhaps they might.  I really don't care short term.  I'm in market for decades not days or months.

Good Luck in your journey.
Link Posted: 5/20/2022 10:43:39 AM EDT
[Last Edit: Greenspan] [#37]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:
I continue to buy the dip.  Why wouldn't I?  I believe in the capital markets and that they will be higher in years to come.  So for me, I am buying stocks, ETF's and Funds at a cheaper price today than last month.  Also, I am locking in higher dividend rates to boot.  A double win for me.

Will stock values continue to decrease?  Perhaps they might.  I really don't care short term.  I'm in market for decades not days or months.

Good Luck in your journey.
View Quote


Cost averagjng or dip buying?
Buying the dip is timing the market.
Link Posted: 5/20/2022 4:36:55 PM EDT
[#38]
Black swans are a no-brainer buy the dip event. This isn't one of those. This is the Fed money printing and 0 interest rate band-aide from the past 14 yrs. getting slowly peeled off with the wound looking worse than ever and turning gangrene. The average investor is just now starting to get a bit nervous at the state of affairs so plenty of carnage coming up and once market sentiment turns from general malaise to sheer panic it will be hard to reverse without major positive news. Do you think a pep talk from Slow Joe will do the trick?

We may finally get the long predicted baby boomer (and now older GenX) sell off when all the retirees and those close to it realize they need to stop the bleeding in their IRA and get out while they are still ahead or be forced back to work as Walmart greeters. It's not like they have a lot of years to wait out a bear market and most are still very heavy in stocks due to no fixed income alternatives for the past 15 years. A boring 4% muni bond or CD will look like a lifeboat in the storm, inflation be damned.
Link Posted: 5/20/2022 5:11:43 PM EDT
[#39]
Link Posted: 5/20/2022 6:13:28 PM EDT
[#40]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle
View Quote


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."
Link Posted: 5/21/2022 7:57:09 AM EDT
[Last Edit: LastDefender] [#41]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


Cost averagjng or dip buying?
Buying the dip is timing the market.
View Quote



Under most circumstances I would agree with you.  For the average investor, a solid pattern of periodic automatic investments based on time as opposed to market conditions makes sense.  This is exactly what I do with my mutual fund investments.  For my ETF's and stock holdings I have to make individual non-automated transactions.  For these I use market conditions as one of the inputs on how much and when to invest in a particular stock or ETF.  I do commit to investing $$$ amount of money every month and if there are no unique opportunities that present themselves during the month, the capital goes into a broad based ETF such as SCHD, VYM or VIG.  On the other hand if I get the chance, I try to maximize my yield on cost by taking advantage of buying opportunities.  

As an example, I own CISCO ticker CSCO.  They are a computer networking equipment supplier.  They pay an above average dividend and have increased their dividend for the past 11 years.  Recently they reported a miss on revenue and issued a revenue decline forecast for the current quarter.  Needless to say their stock got hammered, down over 14% in one morning.  I immediately added to my CSCO holdings.  Is this market timing?  Well yes it is.  Or you could call it strategic investing.  I was able to take advantage of this drop and significantly increase my yield on cost.  But please keep in mind I plan never to sell any share I own.  

Either way you define it, for me, an investor who plans never to sell one share of anything I buy but instead to live off the dividends or bond coupon, I was able to lock in a higher yield on cost due to this precipitous drop.  So in closing, I 100% agree with you that unless the investor is willing to put in the work and fully understand what they are buying; they should absolutely stick to automatic dollar cost averaging based on a time period investment approach.  I do this very thing for 75% of my investment capital.  For 25% I do allow myself to take advantage of unique market conditions that allow me to maximize my yield on cost.

Good luck on your journey.
Link Posted: 5/21/2022 10:01:49 AM EDT
[#42]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By LastDefender:



Under most circumstances I would agree with you.  For the average investor, a solid pattern of periodic automatic investments based on time as opposed to market conditions makes sense.  This is exactly what I do with my mutual fund investments.  For my ETF's and stock holdings I have to make individual non-automated transactions.  For these I use market conditions as one of the inputs on how much and when to invest in a particular stock or ETF.  I do commit to investing $$$ amount of money every month and if there are no unique opportunities that present themselves during the month, the capital goes into a broad based ETF such as SCHD, VYM or VIG.  On the other hand if I get the chance, I try to maximize my yield on cost by taking advantage of buying opportunities.  

As an example, I own CISCO ticker CSCO.  They are a computer networking equipment supplier.  They pay an above average dividend and have increased their dividend for the past 11 years.  Recently they reported a miss on revenue and issued a revenue decline forecast for the current quarter.  Needless to say their stock got hammered, down over 14% in one morning.  I immediately added to my CSCO holdings.  Is this market timing?  Well yes it is.  Or you could call it strategic investing.  I was able to take advantage of this drop and significantly increase my yield on cost.  But please keep in mind I plan never to sell any share I own.  

Either way you define it, for me, an investor who plans never to sell one share of anything I buy but instead to live off the dividends or bond coupon, I was able to lock in a higher yield on cost due to this precipitous drop.  So in closing, I 100% agree with you that unless the investor is willing to put in the work and fully understand what they are buying; they should absolutely stick to automatic dollar cost averaging based on a time period investment approach.  I do this very thing for 75% of my investment capital.  For 25% I do allow myself to take advantage of unique market conditions that allow me to maximize my yield on cost.

Good luck on your journey.
View Quote
I order a lot from Cisco. I was surprised it took so long for them to miss earnings. Wait times on switches and routers are many months now due to chip shortages. Until that stops, I think the stock price will decline. I put an order in last year and it got pushed to September of this year. After complaining we managed to get it changed to June. Hard to make money if you don't have products to sell.

Link Posted: 5/21/2022 10:38:23 AM EDT
[#43]
Link Posted: 5/22/2022 1:04:51 AM EDT
[#44]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bohr_Adam:


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."
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Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."


Splain it to me like I'm 5
Link Posted: 5/22/2022 10:04:54 AM EDT
[#45]
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Originally Posted By Greenspan:


Splain it to me like I'm 5
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Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."


Splain it to me like I'm 5


LastDefender has tried several times. Communication is a two-way street.
Link Posted: 5/22/2022 7:14:57 PM EDT
[#46]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bohr_Adam:


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."
View Quote


Guilty as charged.
I'm one of those who don't get it.
However, I never need to worry about money
for the rest of my life so it doesn't matter.
Link Posted: 5/23/2022 1:39:23 AM EDT
[#47]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bohr_Adam:


LastDefender has tried several times. Communication is a two-way street.
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Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."


Splain it to me like I'm 5


LastDefender has tried several times. Communication is a two-way street.


I dont think you get it. Bull markets have dips. Bear market have false rallies and eventually hopefully return. My point is buy the dip is on t shirts now, its memes. Like any observable statistical stock market yield it will evaporate, but possibly much more.
Link Posted: 5/23/2022 11:10:26 AM EDT
[#48]
Friends,

I will do my best to better explain my strategy in hopes that it will bring greater clarity.  Please note that I am not saying I'm right and your views are wrong.  In fact there are many variations of successful investing.  I picked one that works for me and my risk tolerance and behavioral tendencies.  Your situation may be completely different.  Please consult a financial expert in your area.  Don't listen to some guy on the internet.  So lets start with a little about me and my strategy:

1.  I would like to provide a sustainable income stream for my retired years.

2.  I am not smart enough to pick market tops and bottoms nor specific market sectors or hot stocks.  Lastly, I would rather not have to sell any assets to fund my retirement.  My plan is to leave them all to the next generation so my time horizon is from beyond the grave.

3.  I invest for a steady/growing income stream and secondarily for capital appreciation.  Growth of my net worth is not what I focus on.

4.  My goal is to never have to sell any shares I own and to set-up the next generation for success once I'm gone.

5.  I accept that this strategy is not the most tax efficient.  I am willing to pay tax out of my current income to avoid the need to sell shares and to allow for my dividends to be used to buy more and more shares.  When I stop working I will flip the switch and start taking the money.

6.  The most important investment considerations for me is the compound annual growth rate of the dividend the fund/etf/stock pays and for how long the company/fund has paid it.  I try to invest in funds/etfs/stocks that have steadily grown their dividend over the past 10+ years.  

7.  I fully understand bad things can and do happen with a dividend focused plan.  They include dividend cuts, reverse stock splits, sales and bankruptcy.  I understand that my net work will fluctuate and can in fact go down.

8.  Stocks, ETFs and funds cycle in value.  Earnings, projections, the economy, the FED etc all affect the value of an individual stock/etf/fund.  For the dividend investor, the best time to buy is when prices are falling.  This allows you to lock in at a lower initial cost but a higher dividend rate.  It sounds counter intuitive I know.  As an example, I bought UPS in March of 2020 in the $90 range.  The dividend was around 4.5%.  As UPS grew in value, the dividend percentage went down.  The stock is now in the $172 range but the dividend percentage has fallen to the mid 3% range.  Now keep in mind that in 2020 UPS paid $4.04 per share in dividends.  In 2022 it is on schedule to pay $6.08 per share.  So my dividend rate from my initial purchase is 6.75%.  How you ask?  Simple my $90 share now pays 6.08/share.  This is the power of compound annual growth of dividends.

9.  The real magic is the creation of a dividend snow ball effect.  This is when you re-invest the dividend over years to buy more shares.  This boosts the compounding as you not only hopefully have an asset that has appreciated but one that year over year pays you more dividends which you re-invest in more shares.  Now remember what I said about taxes, Uncle Sam doesn't care if you take or re-invest the dividend, you have to pay tax on the distribution (assuming the asset is not held in a qualified retirement acct such as a 401K, IRA etc). That tax money has to come from somewhere.  The good news is once you hold the asset for one year, you're taxed at capital gains rates and not as ordinary income.  (please check with your CPA for your individual situation)

10.  "But what if the actual value of the asset drops more than the dividend it pays.  Haven't you just lost money?  Why would you invest in something that is worth less tomorrow than it is today?"   The answer is you are investing for a future income stream.  You are also betting that over the long haul, the market will be higher in the long term future.  Remember, this strategy does not focus on growing the asset, it instead focuses on growing the income stream without  having to time asset sales to fund your lifestyle.

11.  "But I can grow my assets at a much faster rater using growth stocks, funds and efts.  I can then sell off the profits and be way ahead of you."  There is a lot of truth to this statement.  A smart investor could do this.  It would require them to be very focused on what to buy and more importantly what to sell and when.  I recognized very early in my investing career that I was not good with the selling part.  I tended to ride my losses all the way down.  I quickly needed to find an alternative investment strategy that better fit my personality.

12.  "So are you telling us that you treat a stock investment the same way you treat a bond investment?"  Not exactly but there are some similarities we can discuss.  Most folks buy bonds or bond funds for stability.  There is nothing wrong with this.  That said, a good quality dividend stock/etf/fund can offer a similar return with a few unique advantages:  a bond typically has a fixed coupon rate.  That is the interest rate you are paid.  Rarely does it change (with the exception of a few specialty bonds such as I-Bonds).  A 10 year treasury will pay you a fixed interest rate of approximately 2.8% guaranteed for the next ten years.  You then redeem the bond and get the face value of the bond back.  The rate will not change.  With a dividend stock/fund/etf you do have the ability to get higher rates if the Board of Directors decides to pay more dividends to shareholders.  Note there is risk, look at Disney, they suspended their dividends so shareholders now get nothing as they wait for Disney to get back on track.  AT&T divested a chunk of it's company to Discovery Warner and reduced it's dividend.  This is not a risk-proof strategy.  Stuff can and does happen.  

13.  The questions that each of us must answer is how much work are we willing to put into our personal wealth creation?  (hint: yes it takes work)  What are your individual goals?  What is your real risk tolerance and what is your personality?  Remember, never invest in anything you don't fully and completely understand.  Make sure you can sleep at night with your choice.  If you are someone who can't stomach watching your net worth fluctuate, or for that matter, one who makes the growth of their net worth their primary goal, this strategy is not for you.  Find a strategy or an advisor who you feel comfortable with and realize that for most of us, true wealth creation is a decades long adventure.  For me, it's been a multi-generational trip.

I wish you good luck in your journey and I hope this has helped some of you.
Link Posted: 5/23/2022 11:19:46 AM EDT
[#49]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Greenspan:


I dont think you get it. Bull markets have dips. Bear market have false rallies and eventually hopefully return. My point is buy the dip is on t shirts now, its memes. Like any observable statistical stock market yield it will evaporate, but possibly much more.
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Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."


Splain it to me like I'm 5


LastDefender has tried several times. Communication is a two-way street.


I dont think you get it. Bull markets have dips. Bear market have false rallies and eventually hopefully return. My point is buy the dip is on t shirts now, its memes. Like any observable statistical stock market yield it will evaporate, but possibly much more.


Even talking "bull" and "bear" is just more indications of a short time horizon mentality that you are welcome to have.

But, that doesn't mean others in this thread have that.
Link Posted: 5/23/2022 12:32:53 PM EDT
[#50]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bohr_Adam:


Even talking "bull" and "bear" is just more indications of a short time horizon mentality that you are welcome to have.

But, that doesn't mean others in this thread have that.
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Originally Posted By Bohr_Adam:
Originally Posted By Greenspan:
Well how did everyone's post age? I still didnt buy the dip, I put a lot of cash in treasury of various types.

There was a lot of good statistical consensus wisdom posted, but all statistics are built on massive events.

But the dip isnt just dollar cost averaging though its something more. I'd argue at this point its what gives the big time investors the ability to leave a large position , retail buy the dip bros.

This might be the super cycle


This thread isn't even three weeks old.

You are betraying just how much you don't "get it."


Splain it to me like I'm 5


LastDefender has tried several times. Communication is a two-way street.


I dont think you get it. Bull markets have dips. Bear market have false rallies and eventually hopefully return. My point is buy the dip is on t shirts now, its memes. Like any observable statistical stock market yield it will evaporate, but possibly much more.


Even talking "bull" and "bear" is just more indications of a short time horizon mentality that you are welcome to have.

But, that doesn't mean others in this thread have that.


No, they are simple understood terms. Also I said I think there is a fundamental shift whereby "buy the dip" is no longer viable.i have bought every dip before this and I mean really pushing into it. This one I think is different. Long term is built off of massive short term events. I believe this is that event.

Long term I'm heavily invested in stocks.
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