The Long Term Investor

I grew up investing in the ERA of the HUGE CONGLOMERATE. Those were amazing companies. Most had great.....long term..... management and many many brands and businesses under their ownership. They made HUGE money. It is kind of sad to see that business model totally disrespected today....with all the companies now that are much more focused. I believe it is a shame that the BIG consumer company model of doing business fell by the wayside.....in many ways I think that business model was superior to what we see today.

 

LOVE the look of that boat oldmanram.....but it would bankrupt me.

 

To continue....briefly.....I think that AMAZON....perhaps the most successful modern company....is actually a CONGLOMERATE more in the old style. They own and operate many, many different businesses under the Amazon umbrella. That gives them MASSIVE earning power, diversification, and stability.

 

That looks like my kind of portfolio...oldmanram. Ten to fifteen stocks and a good group of pretty basic funds and ETF's. AND....it includes my old time FAVORITE.....Phillip Morris. I see that your stock selections.....over time....have outperformed your funds and ETF's.......since the position has grown to 52% from 50% of the total portfolio....assuming that you have not been responsible for that adjustment by adding funds.

My least favorites are the C and MS.....I just dont like bank stocks in general. With that group of funds and ETF's I would agree that you slant toward the BIG CAP side of the markets and double up on some of your BIG stocks.....seems like a good all around plan to me.

 

This seems like a pretty nice number to me....not too hot ....not too cold.

U.S. GDP increased at 6.5% pace in the second quarter, well below expectations

https://www.cnbc.com/2021/07/29/q2-gdp-rises-at-6point5percent-vs-8point4percent-estimate.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• GDP rose at a 6.4% annualized pace in the second quarter, according to the Commerce Department’s first estimate Thursday.
• That was well below the Dow Jones estimate of 8.4%.
• Initial claims for unemployment insurance also missed expectations, with the 400,000 total above the 380,000 expectation.

The U.S. economy rose at a disappointing rate in the second quarter in a sign that the U.S. has escaped the shackles of the Covid-19 pandemic but still has more work to do, the Commerce Department reported Thursday.

Gross domestic product, a measure of all goods and services produced during the April-to-June period, accelerated 6.5% on an annualized basis. That was slightly better than the 6.3% gain in the first quarter, which was revised down narrowly.

While that would have been strong prior to the pandemic, the gain was considerably less than the 8.4% Dow Jones estimate.

Gross private domestic investment fell 3.5% as declines in private inventory and residential investment held back gains. Rising imports and a 5% decline in the rate of federal government spending, despite the ballooning budget deficit, also were factors, the Bureau of Economic Analysis report said.

The overall increase came thanks to increasing personal expenditures, which rose 11.8% as consumers accounted for 69% of all activity. Nonresidential fixed investment, exports and state and local government spending also helped boost output.

The personal savings rate dropped sharply, tumbling to $1.97 from $4.1 trillion in theprevious period.

The headline gain was a yardstick for how far the economy has come from the shutdowns imposed during the early days of the pandemic, when governments across the country halted large swaths of economic activity to combat the Covid-19 spread.

At its nadir, the economy collapsed 31.4% in the second quarter of 2020; it bounced back 33.4% in the subsequent three-month period and has continued to push towards normal since.

In the years prior to the pandemic, the Q2 gain would have been the strongest since the third quarter of 2003.

Though output has remained below its pre-pandemic level, the National Bureau of Economic Research pronounced the recession that began in February 2020 to have ended just two months later, the shortest on record.

However, the second quarter is likely to be the high point of the pandemic recovery.

“The good news is that the economy has now surpassed its pre-pandemic level,” wrote Paul Ashworth, chief U.S. economist at Capital Economics. “But with the impact from the fiscal stimulus waning, surging prices weakening purchasing power, the delta variant running amok in the south and the saving rate lower than we thought, we expect GDP growth to slow to 3.5% annualized in the second half of this year.”

Still, areas of the economy remain underwater as the labor market in particular has struggled to get back to normal.

A separate data point reported Thursday showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and was above the 380,000 Dow Jones estimate. However, it was a decrease from the previous week’s 424,000.

Continuing claims edged higher to 3.27 million, according to data that runs a week behind the headline number. The total of those receiving benefits rose by nearly 600,000 to 13.16 million, according to data through July 10."

MY COMMENT

This is a PERFECT number......for stock investors. A very STRONG indicator that the BULL market has the potential to continue for a long time. This is a GOLDILOCKS number. The perfect.....DISAPPOINTMENT

This would have been a very high number pre-pandemic.....and.....in my view we are NOW totally done with the pandemic economy.....we are back to NORMAL. Thats right.....I am CALLING that we are now back to a normal economy. The lingering employment issues and re-opening issues are NOT relevant.

If we were seeing this number and we had NO PANDEMIC.....we would be CHEERING it as a high......a BOOMING economy. It is the PERFECT situation for stock investors......a PERCEIVED miss of the expectations. This will help to keep the FED under control and tamp down expectations of inflation.

Business is in the process of learning how to deal with the new employment situation and WILL adapt to the current reality. I LOVE it......great news for the markets.

 

AND....we are off to a very nice open today. I hate to say it....it always JINXES he markets....but we seem to have a CLEAR PATH to a couple of really nice market days right now to end the week.

HERE is another little article.....on GDP....I cant help saying again how much I LOVE this data......all the negative stuff in this little article....due to the expectations.....is the PERFECT situation for investors. I dont expect that the BIG CAP GROWTH companies will see any pull back in financials and fundamentals at all going forward. A slow to moderate growing economy....stretched out over a longer time..... is the perfect situation.

U.S. economy expanded at 6.5% annualized rate in Q2, missing expectations

https://finance.yahoo.com/news/q2-2021-us-gross-domestic-product-economic-activity-163209383.html

(BOLD is my opinion OR what I consider important content)

"Growth in U.S. economic activity accelerated only slightly in the second quarter compared to the first, disappointing economists expecting that the lingering effects of fiscal and monetary stimulus and strong consumer and business demand would fuel further growth.

The U.S. Bureau of Economic Analysis released its advanced estimate of second-quarter gross domestic product (GDP) Thursday morning at 8:30 a.m. ET. Here were the main metrics from the report compared to consensus data compiled by Bloomberg:

• Q2 GDP, seasonally adjusted annualized quarter-over-quarter: 6.5% vs. 8.4% expected and a downwardly revised 6.3% in Q1
  
  
• Personal consumption: 11.8% vs. 10.5% expected and 11.4% in Q1
  
  
• Core personal consumption expenditures, quarter-over-quarter: 6.0% vs. 6.1% expected and an upwardly revised 2.7% in Q1

The headline print in quarterly GDP missed the mark even as consumer spending, the biggest component of U.S. economic activity, exceeded expectations. Personal consumption rose at an 11.8% rate in the second quarter, unexpectedly accelerating from the first quarter's 11.4% growth rate and handily topping expectations for a 10.5% increase.

Heading into Thursday's report, the Commerce Department's monthly retail sales figures grew in April and June during the quarter, and have held markedly higher on a year-over-year basis since the summer of last year. These positive trends in consumption, though, are seen decelerating going forward after government-issued stimulus checks turbo-charged consumer spending at the start of the year.

However, other areas of the economy served as drags to second-quarter economic growth. Net exports shaved off 0.44 percentage points from headline GDP, with fast-rising imports and slower-rebounding exports during the economic recovery weighing on overall U.S. output. The results tracked with other recent economic data like the Commerce Department's June advanced goods trade deficit, which showed the U.S. merchandise trade gap yawned to the second-largest ever recorded at the end of the second quarter.

And government consumption expenditures swung from contributing to growth in the first quarter of 2021 to detracting from growth in the second, with government spending subtracting nearly 0.3 percentage points from GDP.

Soaring demand has sparked supply chain constraints and rising input costs during the quarter, offsetting GDP growth as well. And residential fixed investment slowed as fast-rising home prices and tight inventory weighed on the housing market, with this category shaving off nearly 0.5 percentage points from headline GDP.

"In short, Q2 GDP was weaker than expected. Household spending and business investment provided a strong lift but inventories, residential investment, government spending and net exports were drags on growth," Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note. "The level of output surpassed the pre-pandemic level in the second quarter with GDP 0.8% above where it was in Q4-19."

"A solid pace of growth in Q2 is expected to moderate in the second half of 2021," Farooqi added. "The extent of slowdown is still not clear, but we expect GDP growth to remain above trend over coming quarters."

'Middle of the cycle'
Many economists expected last quarter to mark the top of the recovery growth rate for the U.S. economy, with crisis-era fiscal and monetary policy support now waning, and the initial bump in reopening-related spending starting to fade.

And Wall Street has already begun to temper expectations: Goldman Sachs cut its outlook for third- and fourth-quarter GDP growth earlier this week, citing a slower service-sector recovery given recent Delta variant fears.

"We do see a decelerating growth environment," Matt Miskin, John Hancock Investment Management co-chief investment strategist, told Yahoo Finance. "The end of the first quarter was really the peak in the economic growth rate."

Still, "we're still going to be growing at likely mid-single digits here into the third quarter. And then as we get into next year, we think it's more like a low-single digit growth environment that we used to have in past cycles. We believe we're in the middle of the cycle." "

MY COMMENT

The CONSUMER is driving the economy......the DRAG on the economy....government spending and weak exports. NOT a big surprise.....government actions and spending NEVER stimulate the economy....at least in REAL terms. Government does not CREATE anything.....they take money from the economy through taxes....and....reallocate that money in supremely NON-PRODUCTIVE ways. In addition to the consumer we are seeing very nice business investment.

As to exports.....DUH....the rest of the world is way behind us in re-opening.....and our business base is focused on the basics in THIS country.

 

Robinhood? Who? Oh yeah......

 

A BABY BOOMER ICON has died.......he was not a baby boomer......but this man was a staple on the late night and television hours that were watched by kids and teens in the late 1950's and 1960's. A TRUE capitalist. No...I am not talking about Dusty Hill...the ZZ Top bass player that recently died in Houston.....RIP. I am talking about Ron Popiel.

I know....anyone that is not an early baby boomer is saying.....WHO? BUT...this guy was a capitalist marketing genius......one of the fathers of the TV infomercial. Perhaps you remember....RONCO. Some of his ICONIC products.....sold by his company RONCO include Popeil’s Pocket Fisherman, Mr. Microphone, Hair in a Can, Inside the eggshell egg scrambler, a food dehydrator, and many, many, more.

Ron Popeil Was the Sizzle of American Ingenuity, Personified

Read Newsmax: Ron Popeil Was the Sizzle of American Ingenuity, Personified | Newsmax.com
Important: Find Your Real Retirement Date in Minutes! More Info Here

https://www.newsmax.com/finance/streettalk/ron-popeil-american-obituary/2021/07/29/id/1030374/

Ron Popeil, infomercial icon, dead at 86

https://www.foxnews.com/entertainment/ron-popeil-infomercial-icon-dead

 

Good to see you posting Alex......some time tell us about your investing process and holdings.

I dont see a negative end to the week this week. We are having a STRONG start today and we have been up for three of the past five market days for a gain over that time of 1.36% for the SP500. BUT...you are right....a few negative days and the......"it is the end of the world"....comments start up. Actually....this is a big positive indicator.....when the comments are ALL UNIFORMLY euphoric.....that is the time to watch out.....if you are a short term investor. Being a TOTALLY long term investor...I find the day to day stuff entertaining and often FUNNY to watch.

I looked at my account a short time ago......ALL green....except for the STAR of the day Amazon. I am very satisfied....but so far today I dont seem to be able to catch up with the SP500 as it continues to stay ahead of me by about 0.10% for the day.

I often think this thread is like the Seinfeld Show......a thread about NOTHING. Lots of short term market talk....but the real GUTS of the thread....LONG TERM INVESTING.......NOTHING but siting, waiting, and watching. The daily averages...jerking around....are Kramer. The FED is NEWMAN. The average investor is JERRY.....bemusedly watching what is going on around him. The short term traders and investors are represented by GEORGE. The financial media.....is represented by the SOUP NAZI.

Ok....you can tell I am bored today and making silly analogies.

 

I LIKE that attitude oldmanram.......controlled aggressiveness.....whip those ETF's into shape.

Pmw55....what is your goal with the dividend ETF or with the dividends in general? Is it INCOME or GROWTH....or both...or something else. I do note that the VOO SP500 Index beats the VYM performance HANDILY over 10....5.....3.....and 1 years....as well as life of the fund.

The difference if your goal is income.....VYM 30 day SEC yield 2.75%....VOO 30 day SEC yield 1.29%.

 

HERE is some info that might give you some ideas.

8 Best Funds for Regular Dividend Income

https://www.investopedia.com/articles/investing/102615/best-8-funds-regular-dividend-income.asp

"Reinvestment, in which the generated interim income is reinvested back into the investment, is known to increase long-term returns. However, some investors opt to receive periodic payments from their investments, depending on their specific needs. Periodic coupon or interest payments from bonds, which are debt instruments, and regular dividends, which are cash payments from stocks and mutual funds, can offer investors a steady stream of income. In this article, we explore eight of the best dividend mutual funds, which are known to pay dividends regularly.

Key Takeaways

• Many mutual funds offer aggregate dividends from multiple stocks that are either reinvested or paid out to account holders.
• Dividend funds are paid out after fees, meaning the best dividend mutual funds should have low expense ratios and high yields.
• Dividend-paying mutual funds tend to focus on large, well-established companies with a strong track record of paying dividends or are expected to increase their dividend payments.

How Do Mutual Funds Pay Dividends?
Mutual funds often contain a basket of securities including equities or stocks, which may pay dividends. Dividends are paid to shareholders at different times. Mutual funds following a dividend reinvestment plan, for example, reinvest the received dividend amount back into the stocks. Other funds follow the dividend payment plan by continuing to aggregate dividend income over a monthly, quarterly, or sometimes six-month period, and then making a periodic dividend payment to account holders.


A fund pays income after expenses. If a fund is getting regular yield from the dividend-paying constituent stocks, those expenses can be covered fully or partially from dividend income. Depending on the local laws, dividend income may be tax-free, which can add to an investor's overall return.


Investors should also note that companies are not obliged to make dividend payments on their stocks, meaning dividends are not guaranteed. Investors looking for dividend income may find dividend-paying mutual funds a better bet than individual stocks, as the latter aggregates the available dividend income from multiple stocks. A mutual fund also helps with diversifying risk from depreciating stock prices since the money invested is spread between dozens of companies.


Top Dividend-Paying Mutual Funds
Here are the best mutual funds that pay high-dividend yields. A useful benchmark for gauging the dividend-paying performance of a fund is to compare the mutual fund yield against the yield of the benchmark S&P 500 index.


Also, the 30-day SEC Yield is a standard measurement in the industry mandated by the U.S. Securities and Exchange Commission (SEC) to help investors compare funds before investing.


Please note that any fund that invests in stocks, bonds, or other securities can realize gains in losses due to the price movements of the holdings. Although the market gains can lead to enhanced capital gains in addition to the SEC yield, market losses can also occur. These losses can be so significant that the SEC yield can not only be wiped out but also a loss of the initial investment is possible.

1. The Vanguard High Dividend Yield Index Admiral Shares (VHYAX)
VHYAX is an index fund that attempts to replicate the performance of the FTSE High Dividend Yield Index. This index contains stocks of companies, which usually pay higher than expected, or greater than average, dividends. Being an index fund, the VHYAX replicates the benchmark stock constituents in the same proportion. This fund has maintained a consistent history of paying quarterly dividends since its inception on Feb. 7, 2019.1

Being an index fund, this has one of the lowest expense ratios of 0.08% and SEC yield was 2.75%. The fund has a $3,000 minimum investment requirement. It may be a perfect low-cost fund for anyone looking for higher than average dividend income.1

For investors looking for a lower minimum investment requirement, Vanguard offers this fund as an exchange traded fund (ETF), which has many similar characteristics. The ETF version is called the Vanguard High Dividend Yield ETF (VYM).2

2. The Vanguard Dividend Appreciation Index Admiral Shares (VDADX)
VDADX is an index fund, which attempts to replicate the performance of the benchmark NASDAQ US Dividend Achievers Select Index. This unique index consists of stocks that have been increasing the dividend payouts over time. Being an index fund, VDADX replicates the benchmark stock constituents in the same proportion. This fund is also a consistent payer of quarterly dividends since its inception date of Dec. 19, 2013.3

The VDADX also has one of the lowest expense ratios of 0.08% and an SEC yield of 1.65%. The fund has a $3,000 minimum investment requirement.3

For investors looking for a lower minimum investment requirement, Vanguard offers this fund as an ETF, which has many similar characteristics. The ETF version is called the Vanguard Dividend Appreciation ETF (VIG).4

3. The Columbia Dividend Opportunity Fund (INUTX)
Columbia's INUTX focuses on delivering dividends by investing in the stocks of companies that have historically paid consistent and increasing dividends. The fund offers a diversified portfolio of holdings that include common stocks, preferred stocks, and derivatives for both U.S. and foreign securities of various sized companies.

The INTUX has an expense ratio of 1.05% and an SEC yield of 1.96%. The fund's inception date was Aug. 1, 1988, and also has a $2,000 minimum investment requirement.5

4. The Vanguard Dividend Growth Fund (VDIGX)
The Vanguard Dividend Growth Fund (VDIGX) primarily invests in a diversified portfolio of large-cap (and occasionally mid-cap) U.S. and global companies, which are undervalued relative to the market and have the potential for paying dividends regularly. The fund research attempts to identify companies that have high earnings growth potential leading to more income, as well as the willingness of company management to increase dividend payouts.

The VDIGX has an expense ratio of 0.26% and an SEC yield of 1.48%. The fund's inception date was May 15, 1992, and also has a $3,000 minimum investment requirement.6

5. The T. Rowe Price Dividend Growth Fund (PRDGX)
Based on the principle that increasing dividends over a period are positive indicators of a company’s financial health and growth, PRDGX looks to invest in mostly stocks of large companies with some mid-sized companies mixed in. The fund seeks companies that have a strong track record of paying dividends or that are expected to increase their dividends over time.

The PRDGX contains mostly stocks of large U.S. companies that pay quarterly dividends. The PRDGX has an expense ratio of 0.63%. The fund's inception date was Dec. 30, 1992, and has a $2,500 minimum initial investment requirement.7

6. The Federated Strategic Value Dividend Fund (SVAAX)
For investors who are not satisfied with quarterly dividends, the SVAAX from Federated offers monthly dividends. The fund's investment strategy includes generating income and long-term capital appreciation by focusing on higher-dividend-paying stocks than that of the broader equity market. The fund also seeks out companies with dividend growth potential and the fund is primarily benchmarked to the Dow Jones U.S. Select Dividend Index.

The SVAAX contains mostly stocks of large U.S. companies with some foreign securities. The SVAAX has an expense ratio of 1.06% and an SEC yield of 3.21%. The fund's inception date was March 30, 2005, and has a $1,500 minimum initial investment requirement.8

7. The Vanguard Equity Income Fund Investor Shares (VEIPX)
The VEIPX from Vanguard focuses primarily on established U.S. companies that are consistent dividend payers. The fund's holdings tend to be slow-growth but high-yield companies. As a result, the stock price gains may be limited when compared to other funds. This fund pays regular quarterly dividends and has an inception date of March 21, 1988. The VEIPX has an expense ratio of 0.28% and an SEC yield of 2.24%. The VEIPX has a $3,000 minimum investment requirement.9

8. The Neuberger Berman Equity Income Fund (NBHAX)
The NBHAX looks to earn dividend income and capital appreciation by investing in high dividend-paying equities that include common stocks, utilities, real estate investment trusts (REITs), convertible preferred stock, convertible securities such as bonds, and derivative instruments like call and put options.

The fund's inception date was June 9, 2008, and has a $1,000 minimum initial investment requirement. It pays dividends with an SEC yield of 1.50% and has an expense ratio of 1.06%.10

The Bottom Line
A company's dividend payments are typically paid from the company’s retained earnings, which represent the saved profit from prior years. However, companies may be better off reinvesting the dividend money back in the business, leading to higher revenue and an appreciation of their stock prices.

Also, dividend payments limit the reinvestment gains due to compounding. Investors looking for regular dividend income should weigh both the benefits of dividend income with the limitations before investing in high dividend-paying mutual funds."

MY COMMENT

NOT recommending any of the above funds of info....since I have not checked any of it out....just thinking it might give you some info to use as a starting point in your analysis of what you want to do with dividends. Looks like the ETF you are considering is higher or equal in SEC yield compared to ALL the above except for #6. I AM NOT recommending for or against #6...just making an observation....I know NOTHING about it.

 

YEAH......I couldn't think of anything for ELAINE either.