Author Topic: Do others get as excited about dividends?  (Read 6526 times)

bigchrisb

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Do others get as excited about dividends?
« on: February 06, 2013, 04:46:04 PM »
I've got a number of stocks going ex-dividend at the moment - in pre-tax terms, dividends look like:
Dec12: $3,453
Jan13: $3,021
Feb13: $2,961
Mar13: $5,116
Apr13: $4,109

As I was gathering these numbers and putting them in one of my spreadsheets, I realized I was humming along to a cover of "Rivers of Babylon", but rather to the tune of "by the rivers of dividends".  Maybe my investment geek has gone too far this time!

Does anyone else give a little smile each time a dividend, no matter how small, comes in?

Phoebe

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Re: Do others get as excited about dividends?
« Reply #1 on: February 06, 2013, 04:54:42 PM »
Holy cow!  Those are some huge dividends.  Are those for individual stocks?

bigchrisb

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Re: Do others get as excited about dividends?
« Reply #2 on: February 06, 2013, 05:07:24 PM »
Bit of a mix of individual stocks, REITS, LICs and ETFs.  There is a heavy bias to Australian stocks in there (I'm Australian), and the Aussie market has a higher yield than the US market (market average is about 5.5% I think).

Date:               Code (ASX)
12/12/2012   mqg
19/12/2012   anz
18/12/2012   NAB
20/12/2012   WBC
11/01/2012   MTS
17/01/2013   VEU
17/01/2013   VTS
15/01/2013   IVV
22/02/2013   AFI
28/02/2013   GOZ
28/02/2013   DXS
28/02/2013   SGP
28/02/2013   WDC
28/02/2012   BKI
6/03/2013   MLT
4/03/2013   ARG
16/03/2013   GPT
22/03/2013   BHP
22/03/2013   CIN
22/03/2013   TLS
23/03/2013   CPU
30/03/2013   ORG
30/03/2013   WES
30/03/2013   QBE
4/04/2013   WPL
5/04/2013   CBA
12/04/2013   RIO
13/04/2013   CSL
13/04/2013   SOL
19/04/2013   IVV
20/04/2013   VTS
29/04/2013   WOW
23/04/2013   VEU

chucklesmcgee

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Re: Do others get as excited about dividends?
« Reply #3 on: February 06, 2013, 05:28:01 PM »
Does anyone else give a little smile each time a dividend, no matter how small, comes in?

Yes, there's just something nice about cash money being placed into your metaphorical hand. Stock prices can be ephemeral and fleeting, but dividends paid are THERE. Sort of a reason why I do a lot of microlending with Prosper- it's like getting dividends--every single day.

bigchrisb

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Re: Do others get as excited about dividends?
« Reply #4 on: February 06, 2013, 08:32:42 PM »
Yes, there's just something nice about cash money being placed into your metaphorical hand. Stock prices can be ephemeral and fleeting, but dividends paid are THERE. Sort of a reason why I do a lot of microlending with Prosper- it's like getting dividends--every single day.

Agree 100% on this!  I think for me that receiving income distributions gives that great feeling of recurring income - i.e. if my paycheck stopped, this would keep going and provide something to live off indefinitely. 

travelbug

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Re: Do others get as excited about dividends?
« Reply #5 on: February 06, 2013, 08:49:07 PM »
bigchrisb,

we are looking at investing in Australian stocks for a dividend return instead of investing in a term deposit.

Which stocks do you recommend for the best return? We will be investing between 500-700k.

Thanks


bigchrisb

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Re: Do others get as excited about dividends?
« Reply #6 on: February 06, 2013, 09:48:50 PM »
Hi Travelbug,

I reckon anyone who recommends individual investments should be ignored, myself included!  At the end of the day, no-one knows what the future market will do, and my crystal ball is as equally broken as everyone else's!

However, happy to describe my current position, and my logic for it:
Total in the market: $772,000
Margin loan: $460,000
Annual dividends: just under $40,000, including $9,500 of franking credits and about $2,000 of tax deferred income.

My current allocation is:
Direct Australian shares.  Mostly ASX50 stocks and REITS, 50%.  Basically, each time I bought a stock, I bought the largest cap stock that I didn't already own.  My individual stocks are ANZ, BHP, CBA, CPU, CSL, DXS, GOZ, GPT, MQG, MTS, NAB, ORG, QBE, RIO, SGP, SOL, TLS, WBC, WDC, WES, WOW, WPL
Australian managed investments (managed funds, ETFs, LICs). 23%.  All currently in LICs.  I used to use ETFs, but from what I can see, the track record of the LICs in Australia is better, the cost of management lower, and the dividends slightly more tax efficient (for me).  At the time I was buying into them, the LIC's were also trading well below the value of the stocks they hold.  However, they are tracking closer to asset value now.
International shares.  I hold these through ETFs, 9% in US shares (IVV and VTS) and 17% in rest of world (VEU).

I'm not really hoping to beat the market, but rather to keep a diversified exposure to it.  The 40k/year pre tax is also probably enough for me to live off, if I were able to pay off the margin debt and quit work.  However, I'm still 30, and mostly enjoying my job, so still accumulating for now.

Best of luck with whatever you choose to do.  Just if you do go down the stock path, try not to obsess about the daily change - many days see my stock values rise or fall by in excess of $10,000 in a single day.  I'd be better off if I just ignored that and watched the dividends collect / reinvest.

 

icefr

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Re: Do others get as excited about dividends?
« Reply #7 on: February 07, 2013, 12:15:14 AM »
As I was gathering these numbers and putting them in one of my spreadsheets, I realized I was humming along to a cover of "Rivers of Babylon", but rather to the tune of "by the rivers of dividends".  Maybe my investment geek has gone too far this time!

Does anyone else give a little smile each time a dividend, no matter how small, comes in?

I am totally with you! I love dividend day(s), just like I love interest day(s) and I love pay day even though all that I do with it is throw the non-spending allocated money at the mortgage. I'm huge on the details though and can even get excited about a penny of interest, lol.

marty998

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Re: Do others get as excited about dividends?
« Reply #8 on: February 07, 2013, 12:27:40 AM »
I miss my dividends :( Consequence of having a greatly reduced share portfolio.

At the moment I just pick up the 6 monthly cash spun out of my WBC shares.

This year around April I will have a look at the calendar, I used to rotate the same $20k around a few stocks to time the divs. Buy ANZ in April, sell in May, buy TLS, sell in Aug and Buy SUN or AMP, sell and then pick up ANZ again in November. I try and make a small 3-5% cap gain here and there too.

Couple of years ago I did well with this strategy with HHL, SWM and TEN. I got out before they all tanked which was down to luck more than anything else. SWM fell from $4 to $1 and has now rebounded to $2. Amazing opportunity which I saw at the time but failed to pick up.

Phoebe

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Re: Do others get as excited about dividends?
« Reply #9 on: February 07, 2013, 08:14:00 AM »
Thanks for the breakdown BigChris!

travelbug

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Re: Do others get as excited about dividends?
« Reply #10 on: February 08, 2013, 02:26:51 AM »
thanks bigchris!

JT

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Re: Do others get as excited about dividends?
« Reply #11 on: February 08, 2013, 03:39:59 AM »
I adore Dividend Day and would happily hum along to your "By the River of Dividends".

Your stach is impressive - good job.

idjces

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Re: Do others get as excited about dividends?
« Reply #12 on: February 08, 2013, 05:58:28 AM »
Impressive!

Can i ask about the logic behind the margin loan?

Did you buy when yields where a little better? (probably skews the data when looking at the stocks now, given the recent increase).

Do you plan for inflation to help overcome the upfront costs of the slightly higher margin rates?

dragoncar

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Re: Do others get as excited about dividends?
« Reply #13 on: February 08, 2013, 12:08:37 PM »
I don't get excited about mine, but certainly about yours!

BlueMR2

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Re: Do others get as excited about dividends?
« Reply #14 on: February 08, 2013, 03:31:20 PM »
Does anyone else give a little smile each time a dividend, no matter how small, comes in?

Indeed I do.  However, none are anywhere near yours.  If I had those coming in, I'd be retired now.  :-)

bigchrisb

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Re: Do others get as excited about dividends?
« Reply #15 on: February 09, 2013, 12:59:10 PM »
Impressive!

Can i ask about the logic behind the margin loan?

Did you buy when yields where a little better? (probably skews the data when looking at the stocks now, given the recent increase).

Do you plan for inflation to help overcome the upfront costs of the slightly higher margin rates?

Good question! To be honest, I ended up with the margin loan without the best of reasons:
- Stocks during the last few years were in my eyes at amazing lows!  Sadly, I thought early 2008 was sufficiently amazing, so jumped a bit early on this.
- I was in past driven by the tax issues - I have a high income and wanted additional deductions.  The wrong reason to start using them!

As its worked out, I've done OK with the margin debt (accounting for all the buy/sell/div/interest/brokerage I've averaged a 14.15% p.a. pre-tax return on my money invested).  But if I was starting again now, I'm not sure it would be a smart move - the div yield has dropped more than the margin loan interest rate.