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Personal retirement strategy

Discussion in 'Personal Finance' started by Jerseysomerset, Apr 12, 2018.

  1. Jerseysomerset

    Jerseysomerset New Member

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    Hi, I’m a private individual. I hate trying to track the indices and am more risk tolerant than the average person. I have found a wonderful stock, OXLC that pays dividends in excess of 10% per year. What’s wrong with buying this stock only and reinvesting the dividend income when paid? Obviously price could drop but it hasn’t and has been stable for years. Looking for any gotchas that I missed...
     
    T0rm3nted likes this.
  2. T0rm3nted

    T0rm3nted Moderator
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    Hello @Jerseysomerset and welcome to the forums! I have done VERY LITTLE research on the company you posted, but I just pulled up the chart to see what you were talking about. This is the monthly chart dating back to when this stock was listed in 2011. Now to me, that looks to be very clearly in a downtrend LONG-TERM which is what you would be considered with in a retirement account.

    There's a reason sayings like "Don't put all your eggs in one basket" exist, and why people always recommend being diversified. If your goal is long-term investment stocks though and accruing dividends, you'll be hard-pressed to find anything better HISTORICALLY than the dividend aristocrats. I would greatly recommend taking a look into those, and then dividing your money amongst some different sectors to remove some of the risk.

    @JerryM is our resident expert on long-term investing and divends/dividend reinvesting/etc. Maybe he can shed some more light.

    Also, if I may ask, are you close to retirement, or planning pretty far ahead?

    upload_2018-4-13_6-46-42.png
     
  3. Jerseysomerset

    Jerseysomerset New Member

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    Hi and thanks for your insight! I am about 20 to 25 years out from retirement. My thinking is that by reinvesting the devidends, I can get the benefit of increased stock volume ownership ad aggregate the increasing dividends. What are the dividend aristocrats to when he you referred? I will of course go look them up. While I completely concede that what I am doing is very risky, most of my retirement assets as under private management (the typical 1-2% a year but they are not growing anywhere close to the growth I see on this one stock. The same company also offers another stock that I was in initially but this one seems to get a higher return. The dividends have been lowering over time which is concerning but perhaps that’s only because folks are earning more from stock price appreciation in this climate, but maybe that will change longer term and folks will refocus on dividends longer term should the market turn south?
     
  4. Three Eyes

    Three Eyes Active Member

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    Look at the U.S. Dividend Champions section of this page. Download the Excel Spreadsheet or PDF file. Enjoy!
     
    Jerseysomerset likes this.
  5. T0rm3nted

    T0rm3nted Moderator
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    I understand your premise of reinvesting the dividends, but if those reinvested shares continue decreasing over the next 25 years like that stock has done (down 50% since it's inception), you will still lose money because every share will lose value.

    The dividend aristocrats are the safer, more diverse, proven stocks that provide dividends. You can feel safe that these companies might not necessarily ALWAYS make you money, but historically they have proven to be the best.

    If I wanted to just play it safe and invest long-term for my future, that is the method I would use. If I had (for example), $50K saved up that I wanted to invest, I would stick $5K-$10K in 5-10 of the stocks from the dividend aristocrats and would set them up to automatically reinvest the dividends.

    Dividend Aristocrats - https://www.suredividend.com/dividend-aristocrats-list/
     
    Jerseysomerset and Three Eyes like this.
  6. Jerseysomerset

    Jerseysomerset New Member

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    This is a very valuable resource! Thanks so much! As my timing is reliably poor, the price of my little OXLC is up the last couple days, but if I needed to sell, this would be a good time! I only bought in about a year ago around $10.70 so I’ve done ok, but this information you guys provided is so tremendously useful, I’ll do a ton more research and make some slow moves I think. Thank you all again!
     
    T0rm3nted likes this.
  7. Bridget Mallory

    Bridget Mallory New Member

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    What is the best age to start investing for your retirement?
     
  8. T0rm3nted

    T0rm3nted Moderator
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    Whenever you start your first job! You can never start too early. The longer you wait, the higher the chances you'll be working well into your 70's to save enough. You start early enough, you increase your odds of a very early retirement!
     
    Jrich likes this.
  9. Bridget Mallory

    Bridget Mallory New Member

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    Thanks a lot for answering!
     

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