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Tony Farrell's Personal Investment Strategy With Monthly Dividend Stocks
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Tony Farrell's Personal Investment Strategy
My personal strategy is more or less provided below. It is just how I am going about building my portfolio right now, not a recommendation for you, so take it or leave it.
I may change my strategy at any given time, but thus far I am inclined to stick with the one I currently have because I am very pleased with the results.

In my computer service business, I have learned that having a well-diversified client base which continues to patronize your business and with revenue spread relatively equally among them all, results in generally very solid and recession-proof cash flow with some short-term volatile periods here and there. In addition, customers referring customers produces a compounding growth effect. Now in a cash-flow-positive stance, time is on my side, and still being young, I have lots of time left. Therefore, I am after higher risk and higher return growth potential while also maintaining a solid revenue base for operations. These are the concepts I have taken to my stock portfolio.




After watching my large cap bank stocks go on a wild ride, finally I took profits on WFC, BAC, and JPM, and I took losses on C and AIG all on the same day, thereby exiting all my large cap financial stock positions with the exception of WAMUQ which I am holding onto to see how the lawsuits play out. I did this because the explosive growth of them was done and over with. For example, I bought WFC at 8.66 and sold at 24.50 because I was fairly well convinced it was not going to triple in a month again. I lost on C and AIG because I originally bought those positions as they were falling but sold anyways because I did not believe they were going to appreciate much more anytime soon, nor pay any reasonable dividends, so I decided to reallocate them to dividend payers.

Here's the basic idea:

Research and discover all high yield monthly dividend payers
, and start buying them up a whopping $ 200 or so worth at a time. WHAT?!?!? ARE YOU SERIOUS?!?!?!? Yes that's right ONLY $ 200 each. If I had $ 20,000 to invest then I'd be acquiring about 96 positions at $ 200 each and paying the rest in trade commissions. Always get dividends paid in cash, make additional cash infusions when I can to accelerate the process, and use the cash to acquire more positions in other monthly dividend payers. Continue to buy more and more positions as enough cash becomes available, $ 200 or so at a time in each one, starting with higher risk / higher yield and working down to lower risk / lower yield (remember, time is on my side). Similar to many of the funds themselves, the focus is primarily current dividend yield and maximum dividend yield (the highest regular monthly dividend paid out in the last five years) relative to last trade price. Secondary focus is capital appreciation (the highest price it traded at within the last five years), which is also necessary for reasonable dividend growth. Note however that capital appreciation is often dictated more by demand and less by how the market moves. I would also consider, if the price was right, expanding certain positions already acquired. For now I am basically ignoring pretty much everything else that normally matters including industry, leverage, management, locality, expense ratios, and so on. I am generally assuming everything is gradually moving up over time because, quite frankly in my opinion, it is.

I believe this is a massive bull market we are now in both in terms of timeframe and ultimate growth, slowly and steadily to DOW 20,000 over the next five years. Yes, it's true, the long term bull market is well under way. If there are new lows along the way then they will say the bears are still alive and so on, but for all practical purposes, long term steady global economic growth is definitely on the close horizon, and diversified stocks are the place to be both for growth and to hedge against inflation. The amazing financial excesses have been cleared, outrageously high prices have been necessarily readjusted, consumers have cleared out debt and built up savings, and government programs are likely to provide further long term prosperity of cool, even, predicatable, reliable growth. I don't believe the media flatly, but I do believe our leader is well in touch with the middle class in that a prosperous middle class equals a prosperous time for everyone, as opposed to the ongoing separation of classes and elimination of middle class which has been plaguing us.

So given the nature of the bulls, I am going to focus on long positions only. Buy and hold is nowhere near dead; in fact, almost everyone I know who has a retirement account is currently holding stocks and now gradually moving more back into stocks... you just have to plan on holding for like five to ten years now instead of just barely long enough to qualify for long term tax rates.

Along the way, I am also building my Roth IRA, again in a highly diversified manner, because the tax-deffered growth alone is significant unto itself. In my IRA I own SBFAX, SHRAX, SHAPX, SHFVX, OTCFX, AEPGX, and a small amount (2% overall) of treasuries. These funds are set up to reinvest gains and dividends, and they are intended to be held until retirement, which is a long way out for me.

So I created this web site because I had much difficulty and I was spending many hours putting together analysis tables of what to buy when and researching and trying to find the best stocks, funds, CEFs, ETFs, and so on to buy next. Just when I got a table all set, prices and dividends changed and I had to manually update everything, it was very time intensive just trying to track 50 stock symbols. I figured there must be other people out there who have the same dilemma. It seems that investor appetite is increasing quickly for higher risk and higher return items such as junk bonds, and there is a flight to dividend paying stocks. If only they knew about all the great high yield options out there! I certainly didn't, and I am very glad to have this resource available to me. I am also very pleased to offer it to you at your own risk.

I am not recommending or endorsing any given stock, fund, investment strategy, or anything else. I am merely providing a picture of my own personal investment strategy and providing you with the tools to access the data I use the same way I do. I am not recommending you track with my strategy, nor am I recommending that you buy, sell, short, or otherwise trade any securities at all. This is informational only, use or don't use it at your own risk, and no advice of any kind is provided or implied at all.

If you have any good suggestions for stock symbols to add please contact me and let me know. Please remember the focus is monthly high yield payers. If you have any questions please ask away but note that I will not guarantee a response. Use this Contact Form

 


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