Investing for dividend based income is a very different game than investing for capital growth. You're not necessarily looking to grow your capital, although that would be nice. Instead, you want a safe, stable, and growing dividend. If you're just starting out in building your portfolio then you will want to reinvest the dividends to accelerate the portfolio's share count. This will also reduce your yield on cost, since your cost goes down with every dividend received. Think of it as a refund in a way. 😉
There were two ETFs that paid dividends weekly - ticker symbols WKLY and TGIF. Both are defunct now. The idea is interesting though! Imagine getting a dividend payment every week! My older son really liked that idea when he started investing with his "kiddie" account. We screened for companies that paid a dividend for the past 10 years without any cuts or breaks. The minimum yield was 4%. It was quite a list. Maybe 20 or more companies? I can't remember. What I do remember is us mapping past dividends on a yearly calendar. Oh, what a project that was! We discovered rhythms in payments and came up with a portfolio in the fall of 2021 that should pay a dividend weekly.
And .. it worked! 😃
I think there were a few times when a week broke across two months and the payments were shifted. Not a big deal.
We sized the holdings so that each position will deliver the same dividend amount.
A monthly dividend paying portfolio is very attainable. 👍
I would still aim for a minimum 4% yield and include REITs in that investable universe. 🌍 Then again, I am in the US so I have my biases here. 😉
There is a well known Seeking Alpha author named Rida Morwa. He has some interesting ideas on investing for income. Some of his ideas feel like "yield chasing" and are a little risky. However, his philosophy is spot on for what he is trying to accomplish. His articles are worth a read. One of them really struck me. I can't remember the title, unfortunately. In that article he said you should pick a monthly expense, like electricity or internet service. Then build up the portfolio size such that the dividends cover that bill. Start with something small so you get a sense of accomplishment. Don't pick your rent or mortgage. 😏 Once you get that bill covered, move on to the next. Keep going until you get all your bills covered!
I think it was him who said he got the inspiration from a reader who bought enough stock of the electric company to cover the electric bill. So, the electric company was paying the electric company. 😅
There is another authors on Seeking Alpha who name is Guido Persichino. He is based in Italy and invests primarily in CEFs but has some ETFs and other issues. His articles are not very technical but they are beautifully written. He named various groups of issues after different Italian artists 🧑🎨 and artworks. I wouldn't necessarily endorse all of his picks but the fact that he focuses on CEFs is very interesting. There are some good ones with super stable performance 📈 and others that are choppy and lumpy. ⛓️💥
Another interesting author is Steven Fiorillo. He has a series of articles that documents his weekly allocation, where he puts $100 every week 💸 into a portfolio of dividend payers. His latest article in the series talks about week 182 (!), where he has $18,200 dollars allocated and is projected to get $1,678.32 in dividends. That's about a 9.2% yield. He goes wild with lots of charts and graphs 📊 which is kind of cool to see.
I mention these authors because I wanted to highlight just how wide the dynamic in dividend investing is. It's not an endorsement.
One thing I find missing among these three authors is a lack of focus on business quality. I mean, it's mentioned but not necessarily pursued. Lots of the ideas seem risky because the businesses behind the ticker symbols are a little weak. I would rather see smaller portfolio sizes than what they have (Rida has 42 positions) with higher concentrations.
I suppose it's OK to pick one or two risky, yield chasing issues if you have a portfolio of 8 - 10 solid, high quality companies. This allows you to "juice your yields" and if something goes awry then you're only exposed to one position.
I think the focus on quality and stability is essential and that's where this blog fits in nicely. Always go for quality, especially if your living expenses kind of depend on it! I mean, you will be buying food, water, cruise ship tickets, etc with this money. You ought to expect $X but what if you get $Y ... and $Y is less than $X? 😓
Well done! 👍
Investing for dividend based income is a very different game than investing for capital growth. You're not necessarily looking to grow your capital, although that would be nice. Instead, you want a safe, stable, and growing dividend. If you're just starting out in building your portfolio then you will want to reinvest the dividends to accelerate the portfolio's share count. This will also reduce your yield on cost, since your cost goes down with every dividend received. Think of it as a refund in a way. 😉
There were two ETFs that paid dividends weekly - ticker symbols WKLY and TGIF. Both are defunct now. The idea is interesting though! Imagine getting a dividend payment every week! My older son really liked that idea when he started investing with his "kiddie" account. We screened for companies that paid a dividend for the past 10 years without any cuts or breaks. The minimum yield was 4%. It was quite a list. Maybe 20 or more companies? I can't remember. What I do remember is us mapping past dividends on a yearly calendar. Oh, what a project that was! We discovered rhythms in payments and came up with a portfolio in the fall of 2021 that should pay a dividend weekly.
And .. it worked! 😃
I think there were a few times when a week broke across two months and the payments were shifted. Not a big deal.
We sized the holdings so that each position will deliver the same dividend amount.
A monthly dividend paying portfolio is very attainable. 👍
I would still aim for a minimum 4% yield and include REITs in that investable universe. 🌍 Then again, I am in the US so I have my biases here. 😉
There is a well known Seeking Alpha author named Rida Morwa. He has some interesting ideas on investing for income. Some of his ideas feel like "yield chasing" and are a little risky. However, his philosophy is spot on for what he is trying to accomplish. His articles are worth a read. One of them really struck me. I can't remember the title, unfortunately. In that article he said you should pick a monthly expense, like electricity or internet service. Then build up the portfolio size such that the dividends cover that bill. Start with something small so you get a sense of accomplishment. Don't pick your rent or mortgage. 😏 Once you get that bill covered, move on to the next. Keep going until you get all your bills covered!
I think it was him who said he got the inspiration from a reader who bought enough stock of the electric company to cover the electric bill. So, the electric company was paying the electric company. 😅
There is another authors on Seeking Alpha who name is Guido Persichino. He is based in Italy and invests primarily in CEFs but has some ETFs and other issues. His articles are not very technical but they are beautifully written. He named various groups of issues after different Italian artists 🧑🎨 and artworks. I wouldn't necessarily endorse all of his picks but the fact that he focuses on CEFs is very interesting. There are some good ones with super stable performance 📈 and others that are choppy and lumpy. ⛓️💥
Another interesting author is Steven Fiorillo. He has a series of articles that documents his weekly allocation, where he puts $100 every week 💸 into a portfolio of dividend payers. His latest article in the series talks about week 182 (!), where he has $18,200 dollars allocated and is projected to get $1,678.32 in dividends. That's about a 9.2% yield. He goes wild with lots of charts and graphs 📊 which is kind of cool to see.
I mention these authors because I wanted to highlight just how wide the dynamic in dividend investing is. It's not an endorsement.
One thing I find missing among these three authors is a lack of focus on business quality. I mean, it's mentioned but not necessarily pursued. Lots of the ideas seem risky because the businesses behind the ticker symbols are a little weak. I would rather see smaller portfolio sizes than what they have (Rida has 42 positions) with higher concentrations.
I suppose it's OK to pick one or two risky, yield chasing issues if you have a portfolio of 8 - 10 solid, high quality companies. This allows you to "juice your yields" and if something goes awry then you're only exposed to one position.
I think the focus on quality and stability is essential and that's where this blog fits in nicely. Always go for quality, especially if your living expenses kind of depend on it! I mean, you will be buying food, water, cruise ship tickets, etc with this money. You ought to expect $X but what if you get $Y ... and $Y is less than $X? 😓
I like the idea of a dividend as a reduction in your cost basis.
What a great story about building the weekly dividend portfolio with your son. Thanks for sharing it!
There are lots of ways to invest - in dividend-paying stocks, and otherwise. You have to find one that works for you!
Thanks for the knowledge you've shared, I have been able to learn more about dividend investing.
Glad it's been helpful Abel! Thanks for letting us know.
Yeah, hopefully it will guide my investing decision