Blood on the streets cleaned up

[Doubleyellow]

You need on average about $200,000 in the stock market to even make $500 a month in dividends and thats with ETFs not stocks. Imagine that money at a daily risk of losing $60,000 or more for a mere $500 a month in Dividends.

Yipee!!

You might not have the constitution, or maybe the funds that allow you to have the constitution, to not care about the fluctuations in value of a dividend seeking investment, but if you do, it is a liberating situation that allows you to see things differently.

What does it take to not care? Own different categories of investments with a different set of return expectations. And one beautiful category is about cash flow.

My formula. Own one boring, steady as she goes set of investments. You know the company/fund is solid and therefore the dividend is solid, and you don't get alarmed at price fluctuations, and you know you will never need that money invested in this category, you just want the monthly dividend - you are happy with the cash flow it creates and do not chase growth. In fact....in this category, you hope the fund drops, you can buy more on the dip, own more shares, and continue to pull in your dividends, regardless of what the face value is. And over time it will grow, slowly and smoothly, and smooth is fast enough.

Then other magic happens. Once you have the secure cash flow you need, this allows you to take risks elsewhere. To chase the growth, return, etc. in your other categories.

 

[Matawan3]

You might not have the constitution, or maybe the funds that allow you to have the constitution, to not care about the fluctuations in value of a dividend seeking investment, but if you do, it is a liberating situation that allows you to see things differently.

What does it take to not care? Own different categories of investments with a different set of return expectations. And one beautiful category is about cash flow.

My formula. Own one boring, steady as she goes set of investments. You know the company/fund is solid and therefore the dividend is solid, and you don't get alarmed at price fluctuations, and you know you will never need that money invested in this category, you just want the monthly dividend - you are happy with the cash flow it creates and do not chase growth. In fact....in this category, you hope the fund drops, you can buy more on the dip, own more shares, and continue to pull in your dividends, regardless of what the face value is. And over time it will grow, slowly and smoothly, and smooth is fast enough.

Then other magic happens. Once you have the secure cash flow you need, this allows you to take risks elsewhere. To chase the growth, return, etc. in your other categories.

But name a stock where the dividend isn't pocket change compared to the risk involved? The best I can find is JNK; which is actually an ETF of high yield. It yields about 5% and in the worst of times it only loses about 30% of its value. So you can reasonably expect a solid dividend with only a moderate amount of risk.

Regular stocks? Forget it. The dividend is pocket change compared to risk. You could buy at 9am, and your monthly dividend is gone in an hour or less. That hardly makes the dividend worth even a mention.

But if you have something; I'd love to know about it. High dividend, little risk.

I don't necessarily disagree with your thought process on a long term basis. But a new investor buying a market highs in a badly damaged economy? How does that make sense? Like I am onboard with what you are saying, but that works well, until it doesn't. It sounds great in this market. It will wipe you out when record high valuations go into a correction and the market is a Bear.

 

[Matawan3]

The market has been so amazing for so long. People get lulled into this false sense that it only goes up. People don't seem to understand the carnage that can happen. You know we are overvalued when people look at a -200 on the DJIA as a "Oh noes" moment. We are so high that -3000 days are actually bad days.

 

[Doubleyellow]

But name a stock where the dividend isn't pocket change compared to the risk involved? The best I can find is JNK; which is actually an ETF of high yield. It yields about 5% and in the worst of times it only loses about 30% of its value. So you can reasonably expect a solid dividend with only a moderate amount of risk.

Regular stocks? Forget it. The dividend is pocket change compared to risk. You could buy at 9am, and your monthly dividend is gone in an hour or less. That hardly makes the dividend worth even a mention.

But if you have something; I'd love to know about it. High dividend, little risk.

I don't necessarily disagree with your thought process on a long term basis. But a new investor buying a market highs in a badly damaged economy? How does that make sense? Like I am onboard with what you are saying, but that works well, until it doesn't. It sounds great in this market. It will wipe you out when record high valuations go into a correction and the market is a Bear.

I don't really understand your goals, so there is no real point in giving you a list. Your definition of high dividend may not match mine, and mine factors in personal planning. What I am talking about involves less than 15% of my overall investments, but delivers a nice monthly tax free dividend. It's worked since the mid 1990's. 2008 was an opportunity, there have been a few since then, 2020 was another. If we get a 20% correction, and we had over 20% last year, it is an opportunity.

 

[Doubleyellow]

The market has been so amazing for so long. People get lulled into this false sense that it only goes up. People don't seem to understand the carnage that can happen. You know we are overvalued when people look at a -200 on the DJIA as a "Oh noes" moment. We are so high that -3000 days are actually bad days.

Who are you referring to? Most here are not investment naive, we are not chasing the 'get rich quick' schemes, we saw the market drop 25% in one day. We don't make sudden moves, unless we planned them.

 

[charliebrown]

Been in the market for a very long time and most of my stocks with dividends were bought and set to drip years ago. The cost basis relative to the current dividends is much higher than 5% because the stocks have been increasing dividends regularly. You can keep doing exactly what you are doing. I am not selling stocks and taking a hit for capital gains because the stock market might have a correction. I will just look at it as another buying opportunity.

 

[Matawan3]

I don't really understand your goals, so there is no real point in giving you a list. Your definition of high dividend may not match mine, and mine factors in personal planning. What I am talking about involves less than 15% of my overall investments, but delivers a nice monthly tax free dividend. It's worked since the mid 1990's. 2008 was an opportunity, there have been a few since then, 2020 was another. If we get a 20% correction, and we had over 20% last year, it is an opportunity.

My goals are long term investing. With maybe 15% of my money to use as day or swing trades. But my golden rule is never ever buy stocks at record highs. Never. I don't care what kind of additional run I miss out on. I don't buy stocks at record highs period. Sadly; Other than the 2020 dip. This attitude hasn't served me well. Because its been one record high after another, and its frustrating wondering when the heck the bubble will burst. I made money on the 2020 dip buying, but it was catching a falling knife for awhile, so I didn't time the bottom perfectly.

I agree a 20% drop would be a huge opportuntiy, which is why I am about 25% invested, and 75% in cash waiting to put my money to work. No way in heck will I go all in on this bubble market.

 

[Matawan3]

Who are you referring to? Most here are not investment naive, we are not chasing the 'get rich quick' schemes, we saw the market drop 25% in one day. We don't make sudden moves, unless we planned them.

I guess I just don't understand how dividends are relevant as a form of income. Thats all.

Its like saying "Ill give you $5 this month. But at any given time during that month, you have the chance of losing $300-$500". Thats a bad deal.

Entering a stock for a dividend just doesn't make sense to me. Its pocket change compared to the risk. Now, entering a stock because you think it will do well; thats different.

 

[Doubleyellow]

I guess I just don't understand how dividends are relevant as a form of income. Thats all.

Its like saying "Ill give you $5 this month. But at any given time during that month, you have the chance of losing $300-$500". Thats a bad deal.

Entering a stock for a dividend just doesn't make sense to me. Its pocket change compared to the risk. Now, entering a stock because you think it will do well; thats different.

You will have to work through it yourself if you can - if you can switch from a growth mentality to an income mentality for a portion of your investments.

I can't help you understand the value of muni's, which when single, double or triple tax free, can generate livable income. Or how you can take that income and also harvest long term capital gains and pay no taxes, which when done, resets your cost basis for future gains.

I suggest you read this book. It gives some solid insight into people's willingness to take a risk, and why they might or might not. Their decision often comes down to how the question you are asked is worded. Most people take risks based on avoidance of loss, and not the possibility of gain. Do yourself a favor and look up how many times the market has been down 1 year in a row, 2 years in a row, and 3 years in a row...and how often it is up 1,2,3,... years in a row. it may give you some comfort knowing that in the market's case, what goes down, must come up.

https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman-ebook/dp/B00555X8OA

 

[Matawan3]

You will have to work through it yourself if you can - if you can switch from a growth mentality to an income mentality for a portion of your investments.

I can't help you understand the value of muni's, which when single, double or triple tax free, can generate livable income. Or how you can take that income and also harvest long term capital gains and pay no taxes, which when done, resets your cost basis for future gains.

I suggest you read this book. It gives some solid insight into people's willingness to take a risk, and why they might or might not. Their decision often comes down to how the question you are asked is worded. Most people take risks based on avoidance of loss, and not the possibility of gain. Do yourself a favor and look up how many times the market has been down 1 year in a row, 2 years in a row, and 3 years in a row...and how often it is up 1,2,3,... years in a row. it may give you some comfort knowing that in the market's case, what goes down, must come up.

https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman-ebook/dp/B00555X8OA

Okay cool. Thanks for the book link. Ill check it out.

But that still doesn't explain how dividends don't come with tons of risk. Like you can't make a livable income off dividends, without risking a life savings worth of money. If you can; I'd love to know where those investments exist.

You can talk about pst performance of the market, but that is a logical fallacy. Past results NEVER EVER Equal future results. While I generally agree that the market goes up. Buying at record highs or being fully invested at record highs; makes little sense.

 

[Doubleyellow]

Okay cool. Thanks for the book link. Ill check it out.

But that still doesn't explain how dividends don't come with tons of risk. Like you can't make a livable income off dividends, without risking a life savings worth of money. If you can; I'd love to know where those investments exist.

You can talk about pst performance of the market, but that is a logical fallacy. Past results NEVER EVER Equal future results. While I generally agree that the market goes up. Buying at record highs or being fully invested at record highs; makes little sense.

Wow, you responses are annoying, i don't need you to recite investing 101 cliches to me, they are all true, should be remembered, and can Incite paralysis in the neophyte investor. But are not relevant to the long haulers.

And I get it, you don't or can't understand safe dividend capture. So please go do what you have convinced yourself to do. It will probably work in the long run if you don't scare the shit out of yourself on a daily basis in the short run.

But understand this. Keep looking at new ways to capture gains with different investment categories you have. Today's high will look low in 5-10 years.

 

[Matawan3]

Wow, you responses are annoying, i don't need you to recite investing 101 cliches to me, they are all true, should be remembered, and can Incite paralysis in the neophyte investor. But are not relevant to the long haulers.

And I get it, you don't or can't understand safe dividend capture. So please go do what you have convinced yourself to do. It will probably work in the long run if you don't scare the shit out of yourself on a daily basis in the short run.

But understand this. Keep looking at new ways to capture gains with different investment categories you have. Today's high will look low in 5-10 years.

I am frustrated that you aren't answering my questions. All I want is you to list the symbol of the stock that offers high dividends with low risk. I'd put my money in that the second I got it. Otherwise, I feel like my points stands. You haven't refuted how dividends come with high risk that makes them irrelevant. My point stands that to gain just $500 a month in dividends, you are looking at $200K which at any given moment you could lose 30% of. How is that not correct?

You label my stuff investing cliches, but you can't refute them. Thats odd to me.

 

[248Lancer]

My skepticism (as opposed to pessimism) is based on all of these crutches propping everything up, each with it's own expiration date. It's beyond my comfort level for increasing my investment footprint, but I haven't pulled out anything...yet. At some point there will be no stomach in DC for continuing relief legislation, and then the other show will drop on evictions, mortgage deferrals, foreclosures, and economic assistance. Upon expiration of these protections, folks currently being help up by these programs will sadly eventually lose their home very well may have already lost their source of income. The big unknown is just how widespread the damage will be, or if THE GREAT CONTRACTION becomes the new catchphrase of 2021 /2022.

While the pandemic response improves steadily, the possible fallout and damage scale remains catastrophically large, thus the risk remains large, too. Since these are systemic risks and they will not be uniformly distributed across any specific investment category, industry sector, or geographic region, opportunity can be had. But if all the crutches collapse at the same time, its anyone's guess how bad it will be. Therefore, I remain watchful and wary.

 

[Matawan3]

Yeah, people don't realize that the govt is floating all unemployed people right now. I know someone who has been on govt assistance since last March. They just sit in their apartment all day. What happens when that expires in Sept? We can't keep adding on these trillions of dollar bills. We are already paying for them in terms of inflation. Real Estate Prices are out of control and remind me of the sub prime days where people were buying houses they couldn't afford.

 

[njlefty]

The residential housing market down my way has gone crazy. Empty lots in my development all of a sudden have a foundation poured for a home. I don’t know much about pricing, but I bet my former place in Jersey is up 10 percent since I sold it last summer.

 

[njlefty]

I’m just spending and spending these days, anyway. The older you get, the value of money drops as the value of your time left on earth increases.

Except for some of the old farts in my development, who want to leave as much money as possible for their kids.

 

[Matawan3]

Amen to that. Between the ages of 18-30. All I did was save, save ,save. From 30-40, I've mostly spent my money. Why? You don't get ANY return on your money in a bank. So its either, get risky, or get nothing.

So might as well spend it. But I've been smart and spent it on things that hold their value that I can enjoy.

A full set Of Beatles autographs from 1964. It a good thing to own. Those damn things are investments. Let me tell you. In the 1990's a full set went for like $800-$1200. Now they go for like $5000-$8000.

 

[Doubleyellow]

I am frustrated that you aren't answering my questions. All I want is you to list the symbol of the stock that offers high dividends with low risk. I'd put my money in that the second I got it. Otherwise, I feel like my points stands. You haven't refuted how dividends come with high risk that makes them irrelevant. My point stands that to gain just $500 a month in dividends, you are looking at $200K which at any given moment you could lose 30% of. How is that not correct?

You label my stuff investing cliches, but you can't refute them. Thats odd to me.

Why would I refute those cliches you used, all a cliche amounts to is an overused phrase that lacks original thought. I acknowledge your expertise in that area.

As for what you think I need to give you, here is what I think. Your demands and comport are better suited for to the no-holds-barred political thread where you can throw tantrums with kindred spirits.

Good luck.

 

[Matawan3]

Why would I refute those cliches you used, all a cliche amounts to is an overused phrase that lacks original thought. I acknowledge your expertise in that area.

As for what you think I need to give you, here is what I think. Your demands and comport are better suited for to the no-holds-barred political thread where you can throw tantrums with kindred spirits.

Good luck.

So in other words, I am correct about dividends.

I guess the thing that annoys me most is someone who comes off as being very condescending in a "I know more than you" but actually can't have a discussion where he specifically tells me how I am wrong. I'd love for you to prove me wrong. I'd love for you to say "Here is how dividends are relevant". But I guess you can't. Oh well. Have a good day!

 

[Matawan3]

In a general sense I fear people who also just say "Buy and hold".
Market terrible? "Buy and hold"
Market in the middle of a collapse? "Buy and Hold"
You could lose all you money? "Buy and Hold".

That is stuff so called "Financial planners" say to people who don't know any better. I think financial planners are the biggest scam going. "Hey I'll help myself to 3% of your money a year for my skill" Whats my skill?"

BUY AND HOLD.

Trust me. Its tough. A couple clicks of a mouse.