Weekly Dividend Investing Roundup – October 5, 2007

Weekly Roundup

Wow, another week has gone has flown by and it is time for this week’s edition of The Dividend Guy’s Weekly Dividend Investing Roundup. The following article, although not all directly related to dividend investing, are pertinent and interesting from an overall investing perspective.

1. They say that in investing, money is made when you buy and not when you sell. That being said, one of the most difficult thing to do is to know when to sell. It is important to have clear rules in your selling strategy and to stick with them. A long time ago I sold Merck for what I thought were good reason but it turned out I was wrong. Nonetheless I had my principles and stuck to them. Aaron at Grow Your Funds has provided an excellent list of his 5 reasons to sell a stock.

2. JLP provided us with a good post on how to calculate year-to-date returns using monthly data. You may ask yourself why this is important if you can just go to the site to get it – my response is that the key to not getting bamboozled in the investing marketing world is to understand where the numbers they tout come from!

3. I have written a few times on this blog about ensuring that emotions don’t rule your investment decisions. On the Get Rich Slowly blog, guest poster Jamie discusses how our temperament can impact financial decisions. This has direct implications on dividend investing. Know what your hot buttons are and manage them.

4. Want to get a little academic with your investing? Then be sure to read Tweedy Browne’s (pdf document) paper on High Dividend Stock research and its impact on portfolio returns. In a nutshell and the most important point IMHO: Over the last 100 plus years, an investment in a market-oriented portfolio which included, most importantly, reinvested dividends would have produced 85 times the wealth generated by the same portfolio relying solely on capital gains

5. If you are concerned about industry trends and future opportunities (and the lack thereof), check out the article on MSNBC on the 10 businesses facing extinction in 10 years. I actually think they are a little late to the party on some of these (i.e. camera film) but it is interesting nonetheless.

6. And to top it all off, Punny Money provided the most realistic view of global warming I have ever seen. I am not going to be buying shares in snow removal companies any time soon.

Thanks to all the writers who contributed these pieces of work. The learning opportunities from this “blogging thing” never cease to amaze me.

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  1. hivemind says

    I too sold Merck, but only recently and to raise cash for better opportunities: A basket of large cap banks paying substantially higher dividends. I had held it for several years, through the Vioxx debacle, adding on occasion. I see MRK has risen in the very short term since my sale, but the corresponding replacement buys have in aggregate done just as well (or a bit better) and the payout is higher with histories of yearly div bumps. My primary reason for choosing MRK as a source of cash was the comparatively lower yield and lack of a strong dividend growth history in recent years.

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