My understanding is that margin is usually not available for retirement accounts, but it's possible that different brokers have different policies on this.
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huge dividend blue chips
- Thread starter ptrjon
- Start date
Keep in mind with the rapid fluctuation of stocks over the past two years, dividend yeilds are not as acurate as they were in the past.
As in, GE's stock used to be $32 a share, and it's div yeild was 2% or so. Then GE's stock went to $6, and their div yeild was suddenly around 10%. That's when they shifted it to a lower amount.
I'd feel the same way towards these stocks you mentioned. VZ is 6% right now, but that's only because the stock value has been going down. Should the stock recover back to it's $45 stature, that 6% won't look as appealing to you.
You're looking at investing over a 10 year period based on the dividend yeilds, and I suspect those numbers will change drastically by then
As in, GE's stock used to be $32 a share, and it's div yeild was 2% or so. Then GE's stock went to $6, and their div yeild was suddenly around 10%. That's when they shifted it to a lower amount.
I'd feel the same way towards these stocks you mentioned. VZ is 6% right now, but that's only because the stock value has been going down. Should the stock recover back to it's $45 stature, that 6% won't look as appealing to you.
You're looking at investing over a 10 year period based on the dividend yeilds, and I suspect those numbers will change drastically by then
Well said. Current dividend yield is important when we buy. yield to cost becomes important while we hold.
For instance, I met a man who purchased Walmart before they had a presence outside of the midwest. His cost basis was somewhere around $5 per share, and he just held. His dividend yield was somewhere around 2%, but his yield to his original cost was something like 30% a year in sustainable dividends.
This is obviously an extreme example, but I think it's possible that we may still see some promise in a buy and hold strategy now. P/E's are low for some of these well-run businesses- my favorite being VZ. For example, if we buy GE today at 17 while it's paying a $.40/year dividend, in a few(or several) years we may be holding a $40 stock that pays a $1/year dividend.
For instance, I met a man who purchased Walmart before they had a presence outside of the midwest. His cost basis was somewhere around $5 per share, and he just held. His dividend yield was somewhere around 2%, but his yield to his original cost was something like 30% a year in sustainable dividends.
This is obviously an extreme example, but I think it's possible that we may still see some promise in a buy and hold strategy now. P/E's are low for some of these well-run businesses- my favorite being VZ. For example, if we buy GE today at 17 while it's paying a $.40/year dividend, in a few(or several) years we may be holding a $40 stock that pays a $1/year dividend.
I have/had no problem building a sizable GE position with a 20+ year horizon. During the crash, I started buying it at $20, bought it down to $12, sold a bunch of 12.5 LEAPS puts back in early '09 when premium was out of control, and then bought some more at $10. (The puts expired worthless a year later, so I kept that juicy premium too - otherwise I'd have been put the stock at around $9.90. Oh, gee.) My average cost basis on GE is insanely low now....so at the very least, there's not much downside to worry about.
It, along with a few other positions (including T and VZ) I've built in this manner, are not for next quarter or next year but for the next decade or longer.
And yes, I have considered some of the GE preferreds or secured debt. Again, I am not looking near-term, and in these categories of equity, boring is fine by me.
It, along with a few other positions (including T and VZ) I've built in this manner, are not for next quarter or next year but for the next decade or longer.
And yes, I have considered some of the GE preferreds or secured debt. Again, I am not looking near-term, and in these categories of equity, boring is fine by me.