Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

To: slowhandluke
The question is, what risk is greater, inflation or doing your own investing?

Great question. My wife is concerned there isn't anything safe. Whereas I tend to think some things may be safe, but I'm not sure what they are. Am I hearng you say these dividend growth instruments are "ABCD?"

16 posted on 11/09/2012 2:15:35 PM PST by Springfield Reformer (Winston Churchill: No Peace Till Victory!)
[ Post Reply | Private Reply | To 11 | View Replies ]


To: Springfield Reformer
ABCD? Some as are. But nothing is guaranteed.

As a retired guy, I need income, and dividends or MLP payments fit the bill. You get those even if the stock is down a bit, so you don't worry so much about the current selling price. It's not guaranteed to be steady, so we have to live a bit under the expected income, but we've done that for a long time anyway. I wasn't allowed to take the entire pension in a lump sum, so there's still a steady pension payment.

The ABCD part is separate. Investing in a mortgage handling company like NLY gives a great current yield, but will get killed if interest rates move against it. So these are dividend stocks that are going to get killed if Bernanke drives all rates to 0.

Pipelines, such as ETP or the Canadian company PBA, will be in business pretty much regardless of what Bernanke does. They are not directly tied to the price of oil or gas, and can generally raise their fees with inflation.

Utility stocks are another steady producer. But they have a bit of exposure to government risk when they have to ask for rate increases. But they will eventually get the increase.

Consumer staples like Proctor and Gamble won't go out of business, but might not increase or even slightly decrease their dividend when trouble hits.

Some folks think the healthcare REITs will see good business with ObamaCare, though I think it will be temporary as the whole point of ObamaCare is to reduce the total actually spent on healthcare so that eventually these will be squeezed dry.

There is nothing that is perfectly safe. So diversity becomes your friend. Also, a good advsiory newsletter or two helps.

Morningstar has a dividend oriented report, as do the other financial reporting firms. Roger Conrad has newsletters for both utilities and MPLs. I suggested checking SeekingAlpha, as some of the newsletters folks put in articles that match what they tell their paying clients, so you get a good idea of their position and approach. Then you have the folks who write articles there as a hobby, who put their entire line of thought down, which is pretty educational. SeekingAlpha isn't the only such site, but I found it good enough, and time consuming enough.

21 posted on 11/11/2012 8:49:54 AM PST by slowhandluke (It's hard to be cynical enough in this age.)
[ Post Reply | Private Reply | To 16 | View Replies ]

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson