Weekend Reading – March 16, 2013

Ahh, the weekend. A joyous time in my life. I worked about 55 hours this past week. Usually the department I am in has two people running it – myself and one other. Well, that other person took a week off. So, that 55 hour workweek was especially grueling. Not fun. But, that’s why I’m doing what I’m doing. Could those 55 hours have been spent in ways that better enriched my life? I most certainly think so.

I recently wrote my manifesto as I showed everyone out there exactly what I’ve accomplished over the last three years. I wanted to take just one more moment to thank everyone who stopped by and commented on that article, and also thank everyone who has supported me on this wild journey to financial independence. I feel really grateful to be part of such a wonderful community of like-minded people who want more out of life than work-spend-sleep-work. I’m here to celebrate life, and I think life holds a lot more wonder and promise than a hamster wheel (job) and a block of cheese (stuff).

The stock market continues its historic run. Am I concerned? Do I plan to sell everything and go cash? Nope. I continue to put on my headphones and ignore all the noise out there. I put a plan forth back in early 2010 and I continue to stick with it. I believe that buying a part-ownership stake in high quality companies that have a lengthy history of paying out and raising dividends will serve me best over the long haul. If the market crashes next week then my capital will go further and allow me to buy even larger stakes in these companies. If the market continues going up I’ll just continue to value individual companies and buy what I think is most attractive, as I always do.

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

Wells Fargo Raises Dividend 20 Percent as Fed Gives Approval
Yes! The dividend raise I felt was coming, has come. Wells Fargo & Company (WFC) decided to raise the dividend another 20%, after a 14% raise that came just earlier this year. I decided to pick up shares in WFC not long ago, as I felt the company was undervalued and the dividend was going to be hiked again significantly. WFC is the top U.S. bank, in my opinion. I only regret not buying more when I did, or not buying it sooner when I first started seriously considering it. I see another large raise next year.

Illinois Tool Works Dividend Stock Analysis 2013
Dividend Monk put forth an excellent analysis on ITW here. This is another company I wish I would have bought more of when I did. But, alas…so many stocks and so little capital. I agree with Matt on this one. ITW is fairly valued, and has had quite a run over the last year or so. However, I still think it’s one of the more solid plays a dividend growth investor has in the industrial space.

February 2013 Dividend Income Update
My Own Advisor is up to $6,600 in annual dividend income. That’s averaging over $500 per month in dividend income. Pretty incredible, if you ask me! I can’t wait to get to that point and hope to be there within the next few years.

How Spending Cuts Will Hit Your Portfolio
The Dividend Guy discusses potential macroeconomic events and how they may impact your portfolio. Macroeconomics is a tricky area. There’s a lot of moving parts to the global economy, and a lot of it is way above my little head. I just try to focus on what I can control: my savings and what I do with those savings.

Recent Transaction
Passive Income Pursuit recently decided to sell a put against WFC. Like I said above, I think this is the highest quality bank in the U.S. I’m glad to own a small stake, and would love to double it or more.

What Do You Mean “You Don’t Track Your Finances”?!
Kraig recently made some great points here in this article which points out just how important budgeting is. If you don’t know where your money is going, how can you possibly save it? Setting up a budget and monitoring every single expense has been crucial to my success so far and I think this is the first step for anyone who’s looking for financial improvement.

Why You Want to Own Stocks Now
This article over at Daily Trade Alert links stock market returns and the spread between long-term interest rates and short-term interest rates. An interesting read.

S&P 8000 – The power of reinvested dividends in action
DGI recently showed the power of reinvested dividends in this article and goes on to show how the S&P 500 should really be over 8,000 points instead of the 1,560 or so it sits at today. Dividends are wonderful, aren’t they?

Stock Bought: KMI
DGM recently bought shares in Kinder Morgan Inc. (KMI), adding to his position. This is actually one of my top ideas right now and I fully anticipated buying shares on Friday. Unfortunately I was so busy at work (as I alluded to earlier) that I couldn’t get a fund transfer in on time and lost my opportunity. I’ll be circling the waters around KMI next week.

Sold – UNS / New Purchase – KMI, EMB
Compounding Income also bought shares in KMI, after he sold most of his stake in UNS Energy Corp. (UNS). I also recently sold my entire stake in this utility as I felt it was overvalued and the dividend growth has been unimpressive.

New Purchase – TD, WFC, RDS.B
All About Interest recently bought shares in all three companies as he feels they are all attractively valued. I agree that all three are some of the better opportunities on the market, and recently bought stakes in the former two.

Full Disclosure: Long WFC, KMI, TD, ITW

Thanks for reading.

Photo Credit: Benoit Mahe

Comments

    • says

      Journey,

      I’m with you. This market is making it difficult for value investors to find attractive opportunities. I haven’t been deploying capital as much as I’d like to, but patience is prudent here.

      Hope you’re enjoying your weekend!

      Best wishes.

  1. says

    That WFC 20% dividend hike made me almost want to do cartwheels from joy around my desk. It came so unexpected for me, I thought the next increase was sceduled somewhere around jan/feb 2014!

    Unexpected dividend increases bring me joy.

    Take care!

    • says

      Exponential Dividends,

      I feel like doing cartwheels as well!

      I anticipate WFC being a great holding over the long haul as Wachovia fully integrates and they buy back some of the shares that were issued to pick that bank up in the first place.

      Best wishes!

  2. says

    Nice articles and useful! Have a good rest after this awful week. Did not know you were working so much in the US ! You are right to stick with your plan ( How I regret to have sold MCD in 2001 or so ! ) Yes I know it hurts when most stocks go down, but this time I will make a superhuman effort to hold them all. I admit I do not like at all all these market timers and other charlatans on the news, as they only try to frighten us. As said once Warren Buffett: the stock market should be forbidden to kids.

    • says

      Aspenhawk,

      Yeah, I work way more than I’d like to. I suppose my distaste with my job and schedule is what continues to drive me. I think I’d still pursue this plan no matter what, but having a job I enjoyed much more would probably not motivate me to stay so aggressive with the plan.

      I hope you’re enjoying your weekend over there.

      Best regards.

    • says

      Kraig,

      No problem on the mention! I’m fully with you on the importance of budgeting.

      I know you work long, grueling hours as well. We’ll be home free in a few years my friend!

      Take care.

    • says

      Pursuit,

      I’m sure many investors are pleasantly surprised by this raise. I felt one was coming, and could be sizable. I think we’re in for another pretty strong raise next year. I like WFC going forward and only wish I would have invested in the mid-$20′s when I first considered it.

      Best regards!

  3. says

    Thanks for this post.
    I don’t also take in account too much noise, excepted for some.
    It’s why I put my fiat on some bullion, it’s always good to be diversified, especially when you see how fast our money is devalued
    Anyway the stock market, even here in Canada, is depressively high. I only bought a venture on the TSXV (yep they aren’t all scam) undervalued with good business and prospect. But the rest on my monitoring is too costly for now.
    It’s time for a new 2008, it will be a shopping spree.

    Take care DM.

    • says

      JF Baconnet,

      I wouldn’t mind a fire sale. I think if the Fed even hints about removing some liquidity, the market would come down pretty strong. That would present some great opportunities for the long-term investor. It’s hard to say what’s going to happen going forward. I’m certainly no macroeconomic expert. I just focus on what I can control.

      Best wishes!

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