Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

@Boyk1182 have any thoughts on why SPHD did another minor div. reduction this month? Seems most are in better shape than they were in may or June, but they are still trimming back. I know you’ve looked into how they operate a little bit. Is this just from the reduced value of the companies they hold and not where those companies dividends are at?

 

I am not completely sure, but my guess is that they're stuck holding 50 companies until the semi-annual rebalance. If some of those companies cut or eliminate their dividends, the fund is stuck holding them. That's my best guess, I don't think valuation of the companies would affect anything other than maybe the share price of SPHD. It's still a high yield so I didn't give it much concern.

Edit: When I see a drop from $0.15 to $0.1497 from one month to the next, it makes sense that a company (or even a few) cut their dividends to cause this.

 

Yea, it’s not concerning, talking about a % of a penny, just curious. Do they say what % of dividends they receive they pay out?

 

https://www.youtube.com/watch?v=yZjCQ3T5yXo

 

I don't know, but that's a good question. I was kind of hoping it was 100% minus the fee.

 

It might be, I have no idea. I’m sure they have some that are yielding better for them than currently and some that are down. Just didn’t know if it was something they advertised.

 

Depends. I know @Boyk1182 philosophy is: you cut, you get cut, so even if it's a percent of a penny, no bueno - but he's hunting long term stable dividends, even a minor cut like that (if it was a company instead of an ETF) is an indication of potential instability.

I could be reading this wrong:
https://screener.fidelity.com/ftgw/etf/goto/snapshot/distributions.jhtml?symbols=SPHD

this is saying dividends: In = Out. Might not be reading it right - might just be telling me how much of their dividend payout comes from dividends vs cap gains etc. This is just saying all of their distribution comes from dividends, maybe. So in that case I assume the above was right - 100% minus the fees are distributed.

 

That's interesting, as I read this, I realized I'm not completely black and white on that philosophy. If they eliminate for suspend the dividend, they're cut by me. If they cut a fraction of a penny, I am not sure what I'd do. I don't think I've ever seen that happen, but I'd probably have to assess a lot deeper if that ever happened. Interesting, glad you posted that.

 

looks like VIX is reacting to a lot of puts, me thinks a lot of people are betting on a dive.



Kind of funny to see VIX green as much as it is, alongside everything else green as much as they are though

PS @Boyk1182 good to know, always adapt - as you learn a new case, you'll learn a new strategy and how you'll deal with it. Thinking about it now and laying out the guidelines means that when the time comes, you know what you're going to do and don't have to decide that under pressure. Also PS to you, I'm starting to move some of my boring investing into dividend hunting ETFs. SDIV, DIV, and SPHD split evenly, right now ~25% of my boring account funds (non retirement, including my retirement its 12% of total invested portfolio) are now split evenly among those 3 ETFs. You've inspired me.

 

I have the $25 OCT20 VXX puts...and I'd like to unload them for $420+...that represents a $100/per profit....come on stability!

 

If you have 30+ years to do this, I think this chart is all the inspiration you’ll need (see, it’s not just about the dividend payouts):

 

I am on the opposite train of thought. I won't play with options, let alone against VXX right now. Still a newbie. BUT I have a feeling October will bring some minor chaos. Good luck, I hope I'm wrong because I don't have money on the line for it.

But that's only 25 years




I'm liking the idea of it. It's flipside to His Holiness Warren though, who doesn't pay dividends at all - but I'm happy to pay taxes on the extra income every month. Will just have to remember that I'll have taxes to pay on it, since right now I'm W-2 and all my taxes are deducted in my paychecks, I don't really have to think about it. This will change some things....

PS for anyone who's still new to this whole thing like me (which is another reason you shouldn't listen to anything I say or take any advice from me....), DRIP does take taxes as well, you just don't see the income from it. Just something to keep an eye on if you DRIP.

 

Fuuuuu....I could have put $10K in in 1993...but it would have been all of my summer job $$...I was a lifeguard and the ONLY one for the pool that was open 12-7M-F and 11-8 on weekends...including set up and closing I was getting (adjusted for 20 hours of O.T. at 1.5...) $12.50x70hrs A WEEK....$875 for a summer job...for 12 weeks...$10,500 first summer. The guy told me every year I come back I get a $1 raise..I worked there all through college and my last year I was getting $17.50/hr base...$1,225 a week...Made over 12K my final summer...I took a pay cut when I started my first real job

 

The reason I think it works is this: the market is irrational. It goes up massively, crashes massively, then goes up, down, etc. If you timed your ins and outs, you could probably crush dividend investing. But people can't usually do that, so they find themselves down 50%+ every decade or so that recessions hit. With dividend investing, over decades, you have to reinvest it all. Then, you bought a hell of a lot over that time, so your principal grew through all of the ebbs and flows of the market. I doubt I explained that well, but it makes sense to me that dividend payers outperform over very long periods.

 

Oh, I'm a crazy bastard...I bought the October puts while holding November CALLS
I believe the market will settle into october and then the chaos will ramp...
I've got a Nov $40 VXX call just in case of a post elections he said he said legal fiasco...

It looks like the OCT puts will pay the premium for the NOV call...so if it expires I've paid for it already

 

Here is a good one that I haven't seen before, that explains the difference in returns with dividends reinvested vs. not reinvested:

 

I think there's a level of "buy and hold" that pays off. Even if you bought SPHD for the principal investment instead of dividends, 2014 to 2020 was 53%, that's an 8.8% annual growth, in principal, regardless of your dividends.

If you timed your ins and outs. IF. Time in the market will be better than timing the market, I'm sure a lot of people hit March 23rd dead nuts, I'm also sure a lot MORE people missed it.

Similar to the mortgage discussion for the past few pages, I don't think any way is right or wrong. That's why I'm at 25% right now, since I'm taking the dividends and not reinvesting them (directly....my monthly investment budget will probably go up magically by the same amount, less taxes, as these added dividends.....)

I want a dose of whatever you're on. Want to share your crystal ball?

Joke aside, overall you might be right. October might be a bit messy but not terrible, depends how earnings go - I think earnings will be as expected, at this point we all expect "mediocrity" compared to 2019, so that's not a surprise. October for the airlines will be a harsh month, I think anyone with Oct puts in any of the airlines is going to make out like bandits. Not sure how this winter will shake out. I'm definitely intrigued, I'll tell you that much - but I'm still only going to be "playing" with my monopoly account, my boring accounts/retirements will continue to be buy and hold. Might up my contribution in September so it hits for my October pay periods to my 401k actually.

 

Umm..It keeps saying buy SRNE so I did...and now I'm only down 52% -$2,700...Although my NRGD and NRGU play worked out so far..

 

nope. Toyota Dealer