Saturday, August 9, 2014

Weekly Roundup - August 9, 2014

This past week was pretty crazy and honestly it was a really tough week.  It started off good enough with the same old routine of finish up one job, drive home, do some paperwork, then spend some time with my wife.  I love when the summer is in full swing and she's not working, she's a teacher, so we can spend all day every day together when I actually get a chance to be home.  She's one of the biggest reasons why I'm working towards reaching FI as quickly as possible.

On the investing front the S&P 500 was up slightly on the week but it was anything but a smooth ride.  Essentially all of the gains were made thanks to a very good day yesterday that saw the index gain 1.15% from Thursday's close.  Although a grumpy or fickle Mr. Market is great news for long term investors.  Last week I added to positions in Realty Income, General Mills, Verizon and Wal-Mart to help boost up my dividends and get some idle capital to work.  I also went ahead and added to 2 more positions this week that were long overdue to have further investments made.  That post will be up early this coming week, most likely Monday.  If you want to stay on top of the latest purchases, in almost real-time from the trade execution, then make sure to follow me on Twitter@JC_PIP.  There's still a few other positions that I'm looking to add to and hopefully I can do so this week.

I ran across this article on Yahoo!Finance describing the rather dire retirement landscape here in the United States.  The Federal Reserve Board surveyed 4,000 working and retirement age people.  Now whether that's enough to be a good representation of the average American in that camp is a different story.  But of these 4,000 people 31% said they have no retirement savings at all.  None.  Zip.  Zero.  Zilch.  And 19% of those between age 55-64 have $0 in retirement savings.  One of the reasons they listed for zero savings were that many low/middle income families don't have the "financial cushion" to save.  I have a feeling that's a straight up lie for a good chunk of those surveyed.  There's a difference between not having a "financial cushion" and not having the will to make the sacrifices needed to save.  Another reason is that many of the part-time workers don't have access to retirement savings vehicles through their employers.  While that may be the case, there's still savings accounts, IRAs, brokerage accounts and plenty of other options for those that want to save.  Unfortunately I imagine these numbers are just going to continue to look worse and worse as more people start to "retire" and it's going to look really bad when those that are relying on full or part time work get forced out of their job at the absolutely wrong time.  If that doesn't make you want to save for your retirement now then nothing will.

Quick question for the Walgreens (WAG) owners:  have I missed the dividend increase announcement?  Normally they announce it in the first half of July but I haven't found it anywhere.

Also, Bank of America (BAC) shareholders finally got the dividend increase they've been waiting for.  The new quarterly dividend was increased to $0.05 from $0.01 but there will be no share buybacks which is rather disappointing.  The increase raised my YOC from 0.73% to 3.63%.

Thanks to all of you for stopping by, commenting, and sharing posts from here this past week.  I appreciate it so much and it's great to find out about new bloggers and catch up with my old faithfuls.

In case you missed them here's the posts from Passive-Income-Pursuit this past week:


Now on to the links!

Peter Lynch on stock market losses by A Wealth of Common Sense - A great argument by one of the greatest investors of all time to invest as long as the valuations are reasonable.  If you pay attention to the financial media there will always be an endless list of reasons the markets will correct or that a bear market is upon us.  99% of the time those predictions are wrong.

Financial independence distraction or opportunity? by Financially Integrated - In most work situations there's a tradeoff.  You can either have more responsibility and more pay but that usually comes with the catch of higher stress or a poorer work/life balance.  Based on my route towards FI I understand the allure of the opportunity to draw the FI date in even earlier even if it means some less than ideal working conditions.

That's the way I want to go by Retire Before Dad - It's inevitable, we're all going to die.  But we have the choice and opportunity to decide how it is that we live.  I want to capture as much of my time as possible because we can't escape the inevitable.

Dividend growth model portfolios by Dividend Growth Stock Investing - It'll be interesting to follow these portfolios through the years to see how they evolve and what the final results end up being.  Unfortunately we don't have time machines yet so there's no way to know which will be best right now.

14 dividend growth stocks I bought on the dip last week by Dividend Growth Investor - For long term investors it's important to embrace the dips that Mr. Market gives us and not be afraid of them.  If Mr. Market wants to sell me the same company for cheaper just because he's in a bad mood then that's fine by me.

Dividend income update - July 2014 by Dividend Mantra - I think Jason was one of the first people that a lot of you heard about dividend growth investing from.  I know that's where I learned about it very early on in my own investing journey.  Every month I think that I might be making some more progress towards catching him but every month he seems to squash those dreams.  Keep on inspiring Jason!  One of these days I'll catch you.

Do you predict future profits? by Income Surfer - The name of the game for investing success is finding out a way to by $1.00 for $0.85.  Unfortunately there's no great way to predict the future.  Since, well it hasn't happened yet.  For steady companies that continue to grow year in and year out a discounted cash flow analysis is a good starting point.  But there's two things to remember.  1. Garbage in = garbage out. 2.  Investing is part art and science.  No matter how great your model is there's too many variables to account for everything.

August stock considerations by DivHut - DivHut covers some of the companies he's looking at for purchases this month.  And there's a lot to like including some companies that have been paying dividends for over a century!!!

I hope you all have a great weekend!

11 comments:

  1. Thanks for including my DCF article. I was expecting more discussion on the topic, because I know you and I aren't the only investors that take a look at discounting cash flow (or discounting future cash flow if you prefer). Anyway, you're making great progress. Have a wonderful weekend with the Misses.
    -Bryan

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    1. Bryan,

      Sadly there was no weekend with the wife this past weekend but I'm hoping to be home this coming weekend. We'll see though because I never know for sure. It's funny how that happens though. There's posts that I expect to have a lot of comments on and get nothing and then the posts that I don't expect much I then get a lot more. Go figure!

      Thanks for stopping by!

      Delete
  2. PIP,

    I don't own Walgreens, but according to dividend.com the raise was a 7.1% increase from $.315 to $.3375 per quarter. The ex date is 8/19 and the pay date is 9/12.

    MDP

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    1. WAG announced the dividend with the acquisition of Alliance Boots, and the decision not to invert

      And also, thanks for including my article on the companies I purchased

      Delete
    2. @MDP,

      I guess I just missed the announcement on Friday. What concerned me was that it came about 3 weeks later than normal but I guess that was due to the AB acquisition and the potential inversion. Better later than never!

      @DGI,

      I hadn't read through that announcement yet when I was writing this, although at least it came out that same day. I was starting to get a little concerned since it was much later than the normal announcement although I figured the delay probably had to do with the possible inversion.

      Thanks for stopping by!

      Delete
  3. JC,
    Thanks for the mention this week. Very much appreciated. That Walgreen's drop was attention grabbing. I need to take a better look. I did see a dividend increase along with the acquisition of Boots. Also was very happy to see the BAC increase back. I'm ok with no buyback at this point.
    -RBD

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    1. RBD,

      The drop by WAG was pretty staggering although I expected to see a pretty hard sell off after they announced they wouldn't pursue the inversion. WIth BAC I'd rather have seen a split between dividends/buyback like the original capital allocation plan. But it is what it is and that $0.05 dividend from them is a pretty good start.

      Thanks for stopping by!

      Delete
  4. While 30% of respondents not having any retirement savings may sound surprising at first! it really is just a representation of low income earners. For those at the low end of the income spectrum, Social Security is usually enough for retirement income.

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    1. Kay,

      Yeah the study only said they surveyed 4,000 people and I doubt that's enough to give a fair representation of the "average" person that falls in those categories.

      Thanks for stopping by!

      Delete
  5. JC,

    Thanks for the mention. Much appreciated!

    And I'm quite confident you'll easily catch up to me soon enough. You're putting way more capital to work than I am due to your much higher income, especially now that I no longer make the big bucks in the auto field.

    Keep it up, bud!

    Best wishes.

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    Replies
    1. DM,

      Someday!!! Although I wouldn't mind getting to a semi-retirement state like you but my online income isn't close to being enough to supplement my dividends.

      Thanks for stopping by!

      Delete