JoeTaxpayer

In a post on April 21, “DVY - The iShares Dow Jones Select Dividend Index” (another of my eye-catching post titles), I offered that this ETF provided a nice dividend, 4.29% when I posted, a bit less after the recent rally. I suggested that for those who are investing for the long term, this ETF might provide a good selection. The dividend is taxed at favorable rates, 0% if you are in the 15% bracket or lower. Below is a chart comparing DVY to the S&P 500 index since I made the recommendation. *

I acknowledge that there was a time, around July 15th when this appeared to be a bad idea, with DVY lagging the S&P by more than 10%. Of course, in hindsight that was the time to buy more, as DVY recovered and since my April post, the DVY is up 2.5% vs the S&P, down nearly 10%.
I’ll repeat, this ETF is a mix of stocks with the risk the market brings, but the long term, a five year period or longer should reward patience.

Joe

*My standard disclaimers apply.

written by JOE \\ tags: DVY, etf, Investing, ishares, S&P, stocks, tax

The word schadenfreude means “taking pleasure at someone else’s misfortune”. I was seeking the opposite of this word and found the word “mudita”, which is “happiness in another’s good fortune.” Which leads me to the topic of today’s post.
Back in March, another blogger, whose blog is titled Unequivocal Notes said she was considering a gold fund, and I posted a brief comment to try to steer her away from that idea. In a follow on post she confirmed that she chose other funds and passed on the gold. So, I was recently thinking about this, and wanted to see how her choice is doing.

The good news for my blogging friend, is her choice of FFNOX is down just 5% compared to the gold fund’s near 17% drop, and actually was a bit ahead of the S&P index. When someone benefits from my advice, it’s mudita to me, as I hope that I can help others avoid the mistakes I’ve made, and share what I’ve learned.

Joe

written by JOE \\ tags: ffnox, gold, gold fund, mudita, S&P, schadenfreude

Loaded up on your company stock? I hope not. You see, one of the basic mistakes I see in many clients’ investment portfolios is the (too) large amount of their own company stock, especially in their 401(k) accounts. You might think that you’re close enough to the business that you will get out before the stock would ever tank. If so, you are one of the select few. Your ongoing employment and stream of income is tied to your job, to protect yourself, you should consider limiting your company stock to no more than 5% of your portfolio’s value. Compare one blue chip company, Motorola, to the S&P since the beginning of the decade:

Now, to be fair, there are countless stocks that have kept up with or exceeded the S&P, but this is an example of one not so fortunate. S&P down about 10% (up, if you include dividends), but MOT down close to 80%. (Note, I added EMC as well, down 70% for the decade to offer another example.)

Joe

written by JOE \\ tags: 401(k), company stock, dividends, income, investment, S&P, stocks

Last month I commented on the volatility that struck the market. I stated that “this recent blip will look just like any other, meaningless in the long term.” I stand by that remark. Today we closed at 1529 on the S&P, just 1.7% off the high reached in mid-July.

If you had the clairvoyance to sell at 1555, and buy back in at the bottom of the August dip, you are either a liar, or one of the few people who can do this. Truth is, few people can get it right twice, selling, and then buying back at a lower price. It’s a sucker’s game I choose to avoid.

JOE

written by JOE \\ tags: Investing, S&P, stocks, volatility