# Anyone Invested In Utilities?



## OneEyedDiva

I've had a utility fund for decades even though it's performance may not be as spectacular as other investments. I just invested in another one. I've read articles that tout utilities funds as good choices for bear (down) markets as they are considered "defensive investments". I've experienced the cushioning of the economic blow through bear markets. The advantages of ownership: Performance not necessarily correlated to market conditions, no matter what the economic environment is...people will need to use utilities.  They pay usually healthy dividends and capital gains. Disadvantages: Rises in interest rates have negative impacts on these funds and according to the article below "Utility funds also face difficulty at times in passing along changes in energy prices efficiently to consumers and investors due to price regulations".  I was wondering if anyone here has utility mutual funds or ETFs in his/her portfolio.
https://www.investopedia.com/articles/mutualfund/08/utility-funds.asp


----------



## mathjak107

i don't  buy sector funds ...  those are funds that in a particular area only .... to much risk if it is a poor time for that area


----------



## Myquest55

As customers (in the 1990's), in Nevada, we were able to purchase stocks directly from both the natural gas and electric company.  Minimum purchase was $25 and with three school-age sons, I could actually afford that, most months!  When we moved back east the electric company required that we sell the stock but we retained the natural gas.  I tried to make regular purchases and it has grown.  They used to post dividends every month but went public, some years ago and now only post dividends every quarter.  It is still growing and I anticipate gifting some to our, now grown, sons to help with their portfolios.  It isn't enough to live off the dividends (wish it was) but makes a great emergency fund, in case we need it!


----------



## OneEyedDiva

mathjak107 said:


> i don't  buy sector funds ...  those are funds that in a particular area only .... to much risk if it is a poor time for that area


And that is the reason I have a diversified portfolio MJ.  The utility funds make up only a portion. But thanks for answering because I was curious to know your thoughts about it.


----------



## Knight

Our portfolios are diversified for obvious reasons but our first venture into investing was in utilities. Our logic pretty much the same, manufacturing & the general population need electricity. Over 30 years of investing built a decent amount of shares. To the point after those 30 years of sending in money to purchase shares we decided that sending in money to buy more shares was no longer necessary. With regular buying & dividend reinvesting we exceeded and continue to exceed what we targeted as a goal. 

Zero doubt that there will be rise and fall  the key  is starting early with a long term goal.  During those 30 years stock splits of two for one took place, that feature helped our long term  goal.


----------



## 911

My opinion only, I believe that investors who buy into utilities usually do so for two reasons. 1. Growth and 2. Income. Investors in utilities wait for their companies to expand and grow, thus why I say growth. Many electric companies have merged with other gas and electric companies to be one huge players in the utility market. The Income part comes from their dividends. 

Some years ago, I invested in BG&E (Baltimore Gas & Electric), which merged with Exelon. Back in the day, about the late 80’s, I bought a few hundred shares of BG&E for $8.00. When they started talking to Exelon, the stock went up. After the merger, it rose again and as Exelon grew, so did the value of my shares. (I think we received 1 share of Exelon for every 3 or 4 shares of BG&E.) Anyway, we sold a few years after the merger and made a nice return, even after paying the capital gains. 

I also received X number of shares of Bell Telephone from my Uncle’s estate back in the early 60’s while I was still in high school. This uncle was one of my dad’s brothers who never married, so he divided his estate among his nieces and nephews. I know, nice man. Yes, he was a very nice person who treated everyone with respect and dignity. (He died young due to a devastating illness.) Continuing on, I think it was either the late 70’s or early 80’s that Bell was forced to breakup and the shareholders had to decide if they wanted to either exchange their shares for one of the other Bell’s companies, or cash in. I knew absolutely nothing about stocks or the market, so I let my dad handle it. Instead of cashing in the Bell stock, he exchanged my shares for Pac Bell, which then became AT&T. It floundered for awhile, but recovered and I had a nice return. Well, seeing how the stock never cost me anything, how could I not? 

So, yes, I have dipped into utilities, but like I wrote earlier, they are mainly for growth and the income part comes from their normally good dividends, which is why many seniors invest in them. They use the dividends to either purchase more of that same stock, or take the cash to help them through retirement. 

Right now, I like First Energy (FE). There’s probably better, but FE has been very consistent and also growing.


----------



## OneEyedDiva

911 said:


> My opinion only, I believe that investors who buy into utilities usually do so for two reasons. 1. Growth and 2. Income. Investors in utilities wait for their companies to expand and grow, thus why I say growth. Many electric companies have merged with other gas and electric companies to be one huge players in the utility market. The Income part comes from their dividends.
> 
> Some years ago, I invested in BG&E (Baltimore Gas & Electric), which merged with Exelon. Back in the day, about the late 80’s, I bought a few hundred shares of BG&E for $8.00. When they started talking to Exelon, the stock went up. After the merger, it rose again and as Exelon grew, so did the value of my shares. (I think we received 1 share of Exelon for every 3 or 4 shares of BG&E.) Anyway, we sold a few years after the merger and made a nice return, even after paying the capital gains.
> 
> I also received X number of shares of Bell Telephone from my Uncle’s estate back in the early 60’s while I was still in high school. This uncle was one of my dad’s brothers who never married, so he divided his estate among his nieces and nephews. I know, nice man. Yes, he was a very nice person who treated everyone with respect and dignity. (He died young due to a devastating illness.) Continuing on, I think it was either the late 70’s or early 80’s that Bell was forced to breakup and the shareholders had to decide if they wanted to either exchange their shares for one of the other Bell’s companies, or cash in. I knew absolutely nothing about stocks or the market, so I let my dad handle it. Instead of cashing in the Bell stock, he exchanged my shares for Pac Bell, which then became AT&T. It floundered for awhile, but recovered and I had a nice return. Well, seeing how the stock never cost me anything, how could I not?
> 
> So, yes, I have dipped into utilities, but like I wrote earlier, they are mainly for growth and the income part comes from their normally good dividends, which is why many seniors invest in them. They use the dividends to either purchase more of that same stock, or take the cash to help them through retirement.
> 
> Right now, I like First Energy (FE). There’s probably better, but FE has been very consistent and also growing.


Nice 911 !  I rarely take the dividends and healthy capital gains distributions from my utilities fund(s), prefer to keep reinvesting them so my shares have grown quite a bit over the years as well. I had the presence of mind to put the funds into a Roth so all those gains are tax free.


----------



## OneEyedDiva

Knight said:


> Our portfolios are diversified for obvious reasons but our first venture into investing was in utilities. Our logic pretty much the same, manufacturing & the general population need electricity. Over 30 years of investing built a decent amount of shares. To the point after those 30 years of sending in money to purchase shares we decided that sending in money to buy more shares was no longer necessary. With regular buying & dividend reinvesting we exceeded and continue to exceed what we targeted as a goal.
> 
> Zero doubt that there will be rise and fall  the key  is starting early with a long term goal.  During those 30 years stock splits of two for one took place, that feature helped our long term  goal.


Congratulations on exceeding your investment goals Knight! I love hearing stories like yours. The utility fund was one of my first investments too. In fact, I got "bored" with the target fund I originally invested in with that particular brokerage and switched to it's utilities fund. I've never regretted it.  While I don't use "new money" to buy shares (couldn't anyway because it's in a Roth and I have been retired for 21 years), I have chosen to reinvest most of the income.


----------



## mathjak107

meh---- in the end it is all about total return . a utility like PPL  when all was said and done , dividends , reinvestment and all has seen not even a 3% average return over the last 5 years  . on the other hand a simple s&p index has returned  10% ... other utilities lagged  as well ,  verizon 7% ,  at&t 5% ....

in the end you can get better returns , far more diversification and LESS  volatility in just a broad based index .  the old myth about utilities being less volatile has not been true for many years ... they tend to have huge swings like any other stock does . ..


----------



## Knight

To each their own mathjak107. A lot of people read posts about investing to gain an understanding about what works for others.  We are not concerned with where PPL is now since we have exceeded our goal & that is intended to be part of inheritance for our kids. And yes ups & downs can hurt if depending on that as an income or revenue source to live on was the goal.  

Selling a 5 bedroom home on 8 acres of land  that was mortgage free during the height of a sellers market with no tax on the capital gains because of the rule at age 55 wasn't part of our original plan but worked for us. During the 1980's investing all but $25.00 of my wife's pay in Kraft stock building 1600 shares was a short of the goal of 2000 shares. But the that stock split 2 for 1. Kraft went thru a restructuring, we could have sold at a premium but didn't. Then a tobacco company bought Kraft offered to buy at a premium didn't sell.  Not greedy just felt that as a company Kraft was a winner & 3200 plus shares was good to have. Not long after acquiring Kraft the stock split 2 for 1 making the share accumulation 6400 plus. & yes we knew the split meant the same as before the share price dropped. About two years later the stock went as best as I can remember to around $187.00 a share then split again 4 for 1.  We sold, paid the capital gains tax, paid the small remaining mortgage & invested the rest in what we thought was good for us. 

Our plan was for me to retire at 55 but with the good fortune we had in investing and being offered a great retirement package to leave at age 54. Retiring to enjoy life is what we are doing. I think it's understandable that having direct deposit money from 2 pensions, 2 Social Sec. 2  each having MRD traditional IRA  & self directed IRA. At 78 being concerned with what percent PPL  has performed at just isn't part of our life.  We live well enjoying our last years together.


----------



## mathjak107

the ppl comment was not directed to you .. it is just a general comment ... sector investing can be risky and especially volatile if individual stocks ... most would be far better served buying the s&p 500 and stay away from individual stocks and specific sectors.

there is nothing magical about dividends ..you need the same exact increase in appreciation to see the dividend as a return ... it is not free money sprinkled by fairy's on unicorns ...  there is an equal reduction in your investment value that most people have no idea happens . it is NOT  like interest which is on top of what you have ... these payouts are offset by an equal decrease in what you have .

they are nooooo different then when a fund pays out ..appreciation or a drop does it's thing , the fund pays out and the next day if you reinvested your value invested is identical to what you had before the payout ... it just is arraigned differently like a stock split would be .


----------



## OneEyedDiva

mathjak107 said:


> meh---- in the end it is all about total return . a utility like PPL  when all was said and done , dividends , reinvestment and all has seen not even a 3% average return over the last 5 years  . on the other hand a simple s&p index has returned  10% ... other utilities lagged  as well ,  verizon 7% ,  at&t 5% ....
> 
> in the end you can get better returns , far more diversification and LESS  volatility in just a broad based index .  the old myth about utilities being less volatile has not been true for many years ... they tend to have huge swings like any other stock does . ..


One of my utility *funds* has a YTD return 19%, the other 12%.  Their 5 year average annual returns are 17.5% and 17.9%.  And during the last "crash" when stocks plummeted over 600 points (forgot the exact number), while other investments lost between 50 cents and a dollar per share, the utilities only lost pennies per share.  I believe one was 3 cents and the other 5 cents.


----------



## mathjak107

OneEyedDiva said:


> One of my utility *funds* has a YTD return 19%, the other 12%.  Their 5 year average annual returns are 17.5% and 17.9%.  And during the last "crash" when stocks plummeted over 600 points (forgot the exact number), while other investments lost between 50 cents and a dollar per share, the utilities only lost pennies per share.  I believe one was 3 cents and the other 5 cents.


the same can be true of all stocks ... the returns depend on what you own ....

what utility  funds are you referring to  , i want to look it up ?


----------



## Liberty

Knight said:


> To each their own mathjak107. A lot of people read posts about investing to gain an understanding about what works for others.  We are not concerned with where PPL is now since we have exceeded our goal & that is intended to be part of inheritance for our kids. And yes ups & downs can hurt if depending on that as an income or revenue source to live on was the goal.
> 
> Selling a 5 bedroom home on 8 acres of land  that was mortgage free during the height of a sellers market with no tax on the capital gains because of the rule at age 55 wasn't part of our original plan but worked for us. During the 1980's investing all but $25.00 of my wife's pay in Kraft stock building 1600 shares was a short of the goal of 2000 shares. But the that stock split 2 for 1. Kraft went thru a restructuring, we could have sold at a premium but didn't. Then a tobacco company bought Kraft offered to buy at a premium didn't sell.  Not greedy just felt that as a company Kraft was a winner & 3200 plus shares was good to have. Not long after acquiring Kraft the stock split 2 for 1 making the share accumulation 6400 plus. & yes we knew the split meant the same as before the share price dropped. About two years later the stock went as best as I can remember to around $187.00 a share then split again 4 for 1.  We sold, paid the capital gains tax, paid the small remaining mortgage & invested the rest in what we thought was good for us.
> 
> Our plan was for me to retire at 55 but with the good fortune we had in investing and being offered a great retirement package to leave at age 54. Retiring to enjoy life is what we are doing. I think it's understandable that having direct deposit money from 2 pensions, 2 Social Sec. 2  each having MRD traditional IRA  & self directed IRA. At 78 being concerned with what percent PPL  has performed at just isn't part of our life.  We live well enjoying our last years together.


Knight...just think some people enjoy managing their portfolios as an "interest" in retirement. My husband plays tournament poker and some of the big winners...millions and up, have quit playing poker and started "doing stocks", as one said its "way simpler and way way easier".  Lets face it, several days of big money table play poker is  very hard work.


----------



## mathjak107

buying equity funds is very different than poker . poker has a loser for every winner .. equities does not ..  i can buy something and sell it at a gain , they can buy it from me an sell it a gain , so on and so on ..that is very different from gambling .


----------



## Liberty

mathjak107 said:


> buying equity funds is very different than poker . poker has a loser for every winner .. equities does not ..  i can buy something and sell it at a gain , they can buy it from me an sell it a gain , so on and so on ..that is very different from gambling .


You missed my point...its all about "interests".  If you don't like or care for poker you wouldn't have done it in the first place, now would you? If you liked poker and have have made a ton of money and worked hard at it, you may want to find something else you like...in this case, something that's easier on body...lol.  Its all about "interests".


----------



## OneEyedDiva

mathjak107 said:


> the same can be true of all stocks ... the returns depend on what you own ....
> 
> what utility  funds are you referring to  , i want to look it up ?


Exactly...it depends on what you own.  Ya know...as much good things as I've read about index funds, I've never invested in one. No particular reason either.


----------



## OneEyedDiva

mathjak107 said:


> the ppl comment was not directed to you .. it is just a general comment ... sector investing can be risky and especially volatile if individual stocks ... most would be far better served buying the s&p 500 and stay away from individual stocks and specific sectors.
> 
> there is nothing magical about dividends ..you need the same exact increase in appreciation to see the dividend as a return ... it is not free money sprinkled by fairy's on unicorns ...  there is an equal reduction in your investment value that most people have no idea happens . it is NOT  like interest which is on top of what you have ... these payouts are offset by an equal decrease in what you have .
> 
> they are nooooo different then when a fund pays out ..appreciation or a drop does it's thing , the fund pays out and the next day if you reinvested your value invested is identical to what you had before the payout ... it just is arraigned differently like a stock split would be .


It would be hard for anyone who is paying attention not to notice that after their dividend distribution, Fund X dropped 35 cents (the exact or almost exact amount of the distribution). But as I've said before, the 35 cent drop IS NOT PERMANENT.  The share price rebounds, sometimes within days and usually goes on to go much higher so that the original shares and ones bought from reinvestment of dividends increase in value.  Of course, I realize not everyone is reinvesting their shares and perhaps that's the scenario you're referring to.


----------



## mathjak107

OneEyedDiva said:


> It would be hard for anyone who is paying attention not to notice that after their dividend distribution, Fund X dropped 35 cents (the exact or almost exact amount of the distribution). But as I've said before, the 35 cent drop IS NOT PERMANENT.  The share price rebounds, sometimes within days and usually goes on to go much higher so that the original shares and ones bought from reinvestment of dividends increase in value.  Of course, I realize not everyone is reinvesting their shares and perhaps that's the scenario you're referring to.



irrelevant  how many shares you have  . it is like stock split each time ..just do the math to see how the price set back and increase in shares equal the dollars you had prior which markets compound ...it is only about the appreciation on the dollars invested not how those dollars are configured ..it can be one share at the price that equals the dollars invested .....compounding is always on dollars not how many shares those dollars are made up by .

reinvesting merely switches the existing value around so it is configured differently but adds no more new dollars . in fact it does the opposite if you do not reinvest and leaves you with less dollars starting out being acted on .

if you have 1000 shares of a 100 dollar stock, that is 100k invested

.if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left for markets to act upon . if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share .

the opposite happens if markets compound it up but the dollars stay the same.

it is no different than a fund distribution ...you go to sleep and wake with more shares at a lower price ..the same dollars you had before are compounded on . number of shares changing is irrelevant when you reinvest ...

people have a hard time understanding the fact that they have exactly the same dollars working for them both before the stock goes ex div and after the stock adjusts and they reinvest .

the gain you get is from appreciation , so after the stock appreciates  they hand you  back  a piece and subtract the dollars off your balance ..if you reinvest they put those dollars back in but at an adjusted share price worth less with  more shares to offset it  but same dollars being compounded as you had


----------



## OneEyedDiva

mathjak107 said:


> the same can be true of all stocks ... the returns depend on what you own ....
> 
> what utility  funds are you referring to  , i want to look it up ?


I've seen different return rates from different sources. This is one of the utility funds I own as reported by Morningstar's Instant X-Ray.  Slightly different numbers than Schwab's "Report Card".  Dates used to compile reports are a factor I'm sure.
https://www.morningstar.com/funds/xnas/pruax/quote


----------



## mathjak107

Total return is good for that one


----------



## CallmeIshmael

Dividends also represent an opportunity to reallocate capital in a way that company management cannot.  If dividends are received in an portfolio with funds with low-ish correlations (e.g., stocks/bonds, US/international, growth/value, large cap/small cap) then dividends offer an opportunity to buy low with dividend cash flow.  It can work especially well in a tax deferred account like an IRA or 401(k).

I don’t have utilities, but I bought a healthy dose of REITs for somewhat similar reasons during the middle of last year - primarily for their low correlations to my other asset classes and the dividend cash flow.  

There’s also a psychological benefit to receiving cash without selling down equity principal, which is an underappreciated aspect of behavioral finance.


----------



## mathjak107

CallmeIshmael said:


> Dividends also represent an opportunity to reallocate capital in a way that company management cannot.  If dividends are received in an portfolio with funds with low-ish correlations (e.g., stocks/bonds, US/international, growth/value, large cap/small cap) then dividends offer an opportunity to buy low with dividend cash flow.  It can work especially well in a tax deferred account like an IRA or 401(k).
> 
> I don’t have utilities, but I bought a healthy dose of REITs for somewhat similar reasons during the middle of last year - primarily for their low correlations to my other asset classes and the dividend cash flow.
> 
> There’s also a psychological benefit to receiving cash without selling down equity principal, which is an underappreciated aspect of behavioral finance.



dividends do not accomplish anything that can't be accomplished by selling equal dollars from a portfolio . as long as total return is the same or greater they will have identical balances and last just as long .

as far as management not squandering money ?  think again ... there is no evidence they spend and waste any less .

case in point .

AT&T paid $100 billion to enter the cable business

AT&T thought it would be a good idea to diversify by paying $100 billion to take on cable company TCI. It was wrong! AT&T broke itself up a few years later and sold off the cable assets.

AT&T tried to elbow its way into the personal computer business with a hostile $7 billion takeover of NCR. It didn't work, and AT&T later spun the company back out at a $4 billion valuation.

Microsoft paid an estimated $500 million for mobile phone company Danger. It was supposed to be working on new phones for Microsoft, but most of the key employees left the company. The end result of the acquisition was the Kin, a social smartphone from Microsoft that totally bombed.

Cisco probably bought Pure Digital, the company that makes the Flip, right at the peak of its value in 2009. Since then high definition video cameras have been built into just about every smartphone making the Flip pretty much worthless in the long run. Which is probably why Cisco killed the $590 million acquisition earlier this year.

After Google bought DoubleClick, Microsoft tried to keep up by buying ad company aQuantive for $6 billion. The acquisition never really worked out. The aQuantive executives left two years after the deal closed and the technology was discarded.
..
AOL-Time Warner is obviously the worst

i can go on and on


----------



## mathjak107

Dividends were once a company’s way of saying look at me .. I am doing so well I have money I don’t even need .it was a sign of health and investors liked that .

But of course we found that was not really true ..boards voted to pay dividends right up in to the financial graveyard as they went bankrupt....

Dividends have a whole lot of myth and mis information believed by the uninformed , but if they simply did the math all they are is a return of a piece of the share price so you have less dollars invested .

If you reinvest you merely end up back to where you were in total dollars invested before the stock traded ex div ...there is nothing magical going on or free money ....otherwise we would all buy the day before it went ex div and sell after ..so obviously that accomplishes nothing ....there is not even a benefit to reinvesting when markets fall ...the math stays the same because to make a difference you need to add more dollars then you had


----------



## CallmeIshmael

I think you are making part of my point.  I would rather reallocate excess cash than giving management the opportunity to do so.  Management is notoriously bad an reinvesting their own cash (there are always exceptions).  There’s no downside to dividends in a tax deferred account.

And selling equities is easy to do in a bull market with healthy gains, not sure it will be as easy in a deep bear market - and if management does not feel comfortable making distributions because they need the cash, then they’ll keep it - otherwise I’ll take that cash dividend and buy whatever is cheapest within my portfolio (i.e., rebalance).


----------



## mathjak107

CallmeIshmael said:


> I think you are making part of my point.  I would rather reallocate excess cash than giving management the opportunity to do so.  Management is notoriously bad an reinvesting their own cash (there are always exceptions).  There’s no downside to dividends in a tax deferred account.
> 
> And selling equities is easy to do in a bull market with healthy gains, not sure it will be as easy in a deep bear market - and if management does not feel comfortable making distributions because they need the cash, then they’ll keep it - otherwise I’ll take that cash dividend and buy whatever is cheapest within my portfolio (i.e., rebalance).


So you can just as  easily sell some shares from a non div payer .


----------



## CallmeIshmael

mathjak107 said:


> Dividends were once a company’s way of saying look at me .. I am doing so well I have money I don’t even need .it was a sign of health and investors liked that .
> 
> But of course we found that was not really true ..boards voted to pay dividends right up in to the financial graveyard as they went bankrupt....
> 
> Dividends have a whole lot of myth and mis information believed by the uninformed , but if they simply did the math all they are is a return of a piece of the share price so you have less dollars invested .
> 
> If you reinvest you merely end up back to where you were in total dollars invested before the stock traded ex div ...there is nothing magical going on or free money ....otherwise we would all buy the day before it went ex div and sell after ..so obviously that accomplishes nothing ....there is not even a benefit to reinvesting when markets fall ...the math stays the same because to make a difference you need to add more dollars then you had



That’s only true if you reinvest within the same security.  If you have better opportunities in another asset, you can invest there.


----------



## mathjak107

CallmeIshmael said:


> That’s only true if you reinvest within the same security.  If you have better opportunities in another asset, you can invest there.


Huh ?  I can sell the same dollars from a non div payer and deploy it any where else I want ....there is no difference


----------



## CallmeIshmael

mathjak107 said:


> So you can just as  easily sell some shares from a non div payer .



That’s definitely true.  I do like dividends in tax-deferred though, as noted earlier, I have an inherent mistrust in how management handles excess cash.


----------



## mathjak107

CallmeIshmael said:


> That’s definitely true.  I do like dividends in tax-deferred though, as noted earlier, I have an inherent mistrust in how management handles excess cash.


Well dividends don’t stop it ...my examples above show just as stupid actions as any stock


----------



## CallmeIshmael

mathjak107 said:


> Huh ?  I can sell the same dollars from a non div payer and deploy it any where else I want ....there is no difference



Another, different reason - take a REIT in a Roth IRA account.  You have converted real estate income from a single level of tax at the shareholder level (i.e., a REIT dividend) into a completely non-taxed source of income.


----------



## mathjak107

Personally all my serious money is in broad based funds , I don’t want to take on the additional risk  to market risk of adding individual company risk in to the equation


----------



## CallmeIshmael

mathjak107 said:


> Personally all my serious money is in broad based funds , I don’t want to take on the additional risk  to market risk of adding individual company risk in to the equation



Yes, agree - VNQ for me.


----------



## mathjak107

CallmeIshmael said:


> Another, different reason - take a REIT in a Roth IRA account.  You have converted real estate income from a single level of tax at the shareholder level (i.e., a REIT dividend) into a completely non-taxed source of income.


Meh ,, it works out the same regardless ......you merely paid the taxes up front in a Roth ....

If I want to convert or get 5k in a Roth at the 25% bracket I need 6666.00 in pretax dollars ...if I get that 5k in a Roth and my reit doubles I have 10k ...

If I have 6666 in a traditional 401k and it doubles , assuming the same tax bracket it has the same 10k after tax balance ...
The Roth has you paying with pretax dollars up front that could be deployed elsewhere if it did not go for taxes ....the problem is people never calculate correctly.


----------



## CallmeIshmael

mathjak107 said:


> Meh ,, it works out the same regardless ......you merely paid the taxes up front in a Roth ....
> 
> If I want to convert or get 5k in a Roth at the 25% bracket I need 6666.00 in pretax dollars ...if I get that 5k in a Roth and my reit doubles I have 10k ...
> 
> If I have 6666 in a traditional 401k and it doubles , assuming the same tax bracket it has the same 10k after tax balance ...
> The Roth has you paying with pretax dollars up front that could be deployed elsewhere if it did not go for taxes ....the problem is people never calculate correctly.




Yeah, I paid the tax a long time ago in a lower tax bracket than I am in today.


----------



## mathjak107

CallmeIshmael said:


> Yeah, I paid the tax a long time ago in a lower tax bracket than I am in today.


Most people look at that wrong too.

Most people look at their final years of working and then go I will be in a lower bracket in retirement .. that could not be more flawed ....most of us have had normal jobs where we ramp up in income over 30-40 years... we start off really low and end up usually much higher by retirement...it is the average over those 40 years that determines what your average bracket is , not the final years people mistakenly look at ...in most cases we are higher in retirement then that average ...... unless you are in a career like doctor ,lawyer , etc where you start off in high brackets , the way things are looked at is flawed


----------



## CallmeIshmael

mathjak107 said:


> Most people look at that wrong too.
> 
> Most people look at their final years of working and then go I will be in a lower bracket in retirement .. that could not be more flawed ....most of us have had normal jobs where we ramp up in income over 30-40 years... we start off really low and end up usually much higher by retirement...it is the average over those 40 years that determines what your average bracket is , not the final years people mistakenly look at ...in most cases we are higher in retirement then that average ...... unless you are in a career like doctor ,lawyer , etc where you start off in high brackets , the way things are looked at is flawed


Roth IRAs do not have RMDs, which can be a significant benefit over regular IRAs when trying to manage taxable income in retirement.  Roth IRAs are also more beneficial if you are likely to leave significant assets to your heirs.


----------



## mathjak107

CallmeIshmael said:


> Roth IRAs do not have RMDs, which can be a significant benefit over regular IRAs when trying to manage taxable income in retirement.  Roth IRAs are also more beneficial if you are likely to leave significant assets to your heirs.


Roth’s have a lot of other benefits  that are not tax bracket related ...no rmd’s ,  at 70-1/2 unlike traditional accounts the gains are still not taxed on future earnings....

Roth’s can help you maybe not get social security taxed ...it may help you get an aca subsidy , etc ...so there are quite a few perks besides comparing tax brackets


----------



## mathjak107

CallmeIshmael said:


> I think you are making part of my point.  I would rather reallocate excess cash than giving management the opportunity to do so.  Management is notoriously bad an reinvesting their own cash (there are always exceptions).  There’s no downside to dividends in a tax deferred account.
> 
> And selling equities is easy to do in a bull market with healthy gains, not sure it will be as easy in a deep bear market - and if management does not feel comfortable making distributions because they need the cash, then they’ll keep it - otherwise I’ll take that cash dividend and buy whatever is cheapest within my portfolio (i.e., rebalance).




bull or bear market , the same dollars as the dividend  from a portfolio of non div payers  will leave you with the same cash flow and balance as the dividend payer  as long as total returns are the same or greater .

here is a down market scenario


if you have 1000 shares of a 100 dollar stock, that is 100k invested

if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left which equals 81k  for markets to act upon .

if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same exact 90k you had .


on the other hand a portfolio of non div payers with 100k invested can drop the same 10% which is 90k ,,,sell off 9k to create the dividend and guess what , you got the same 81k left for markets to compound on .

if you put the 9k back in and decided not to take it you have the same 90k left

it just consists of less shares at a higher price since there is no mandatory roll back like with the div payer . the div payer ends up with more shares at a lower price  but they equal the same dollars being acted on by the markets .

in both cases if markets double the investment your balances are identical .

people get all confused because they see the share balance increase , but they fail to realize it increases on a lower share price then had the dividend not been paid out .

ALL GROWTH COMES FROM SHARE APPRECIATION IN BOTH CASES .   how you draw some out is irrelevant


----------



## OneEyedDiva

mathjak107 said:


> Most people look at that wrong too.
> 
> Most people look at their final years of working and then go I will be in a lower bracket in retirement .. that could not be more flawed ....most of us have had normal jobs where we ramp up in income over 30-40 years... we start off really low and end up usually much higher by retirement...it is the average over those 40 years that determines what your average bracket is , not the final years people mistakenly look at ...in most cases we are higher in retirement then that average ...... unless you are in a career like doctor ,lawyer , etc where you start off in high brackets , the way things are looked at is flawed


For me, I also was in a lower tax bracket when I converted to a Roth and I paid taxes on *much* less money (a mere fraction) than I would if I had to pay taxes on my holdings now.


----------



## mathjak107

OneEyedDiva said:


> For me, I also was in a lower tax bracket when I converted to a Roth and I paid taxes on *much* less money (a mere fraction) than I would if I had to pay taxes on my holdings now.


It can work out the same depending on brackets ....like I said there is a price to pay for laying out all those pretax dollars for a roth  up front ..... if you remember my example you can take 6666.00 from a traditional  and convert 5k to a Roth ... that Roth can double and go to 10k  ...so you now have 10k clean .

But that 6666.00 in the traditional which is the equal in pretax dollars would also double and assuming the same tax bracket also net 10k clear after paying those taxes even though the Roth paid them on just 5k ....


----------



## CallmeIshmael

mathjak107 said:


> bull or bear market , the same dollars as the dividend  from a portfolio of non div payers  will leave you with the same cash flow and balance as the dividend payer  as long as total returns are the same or greater .
> 
> here is a down market scenario
> 
> 
> if you have 1000 shares of a 100 dollar stock, that is 100k invested
> 
> if it falls 10% over the quarter to 90k and pays a 10% dividend you will have 81k left invested after the mandatory roll back and 9k in pocket so you have 1000 shares at 81 a share left which equals 81k  for markets to act upon .
> 
> if you reinvest the 9k back in back in at this reduced price of 81 dollars you will have 1111 shares at 81 a share or the same exact 90k you had .
> 
> 
> on the other hand a portfolio of non div payers with 100k invested can drop the same 10% which is 90k ,,,sell off 9k to create the dividend and guess what , you got the same 81k left for markets to compound on .
> 
> if you put the 9k back in and decided not to take it you have the same 90k left
> 
> it just consists of less shares at a higher price since there is no mandatory roll back like with the div payer . the div payer ends up with more shares at a lower price  but they equal the same dollars being acted on by the markets .
> 
> in both cases if markets double the investment your balances are identical .
> 
> people get all confused because they see the share balance increase , but they fail to realize it increases on a lower share price then had the dividend not been paid out .
> 
> ALL GROWTH COMES FROM SHARE APPRECIATION IN BOTH CASES .   how you draw some out is irrelevant


Yes, I understand the math.  I think you should study behavioral finance - just because the rationality of the math is so clear to you doesn’t mean its so clear to, I don’t know, your significant others.  If it is clear to them and they are on completely the same page, then that’s great - you have a very thoughtful, tax-efficient, diversified retirement portfolio and many are far worse off than you.  DW does not take the same interest in our portfolio as I do, so I think cash flows from dividends will work very well for her especially once we shift from an accumulation phase to an income conversion phase.


----------



## mathjak107

Funny you mentioned it .....my wife was a widow once.  Her husband dropped a bunch of investments in her lap that she did not understand...she went to the guy at the bank whom she trusted and at the time he put her in dot coms and tech stock ..when the smoke cleared she lost half her savings ..

So our plan had to be simple and understandable by her.....our portfolios are simply rebalanced yearly to raise spending cash ...she knows they all get reduced down to the original allocations we decided on ....that is it ...that is the entire plan.. we fill the checking account once a year with all the spending money.

we  put the dividends and fund distributions towards the following years money ....why ? Trying to live off cash flow as it comes in directly ends up being all over the map ...dividends get cut , dividends get suspended , interest goes up and down  so without a buffer bucket to spend from you can come up short at the worst of times ....

So we find that-saving the distributions towards next years budget works the best for us ....we have a constant flow from the checking account all year with no surprises or coming up short.

Then next year we see what is in the bucket from all the stuff coming in and anything we need to top it off comes from rebalancing the portfolio back to the allocation we want.

We found trying to live hand to mouth directly from distributions was to much work as the amounts coming in varied , especially fund distributions....


----------



## CallmeIshmael

mathjak107 said:


> Funny you mentioned it .....my wife was a widow once.  Her husband dropped a bunch of investments in her lap that she did not understand...she went to the guy at the bank whom she trusted and at the time he put her in dot coms and tech stock ..when the smoke cleared she lost half her savings ..
> 
> So our plan had to be simple and understandable by her.....our portfolios are simply rebalanced yearly to raise spending cash ...she knows they all get reduced down to the original allocations we decided on ....that is it ...that is the entire plan.. we fill the checking account once a year with all the spending money.
> 
> we  put the dividends and fund distributions towards the following years money ....why ? Trying to live off cash flow as it comes in directly ends up being all over the map ...dividends get cut , dividends get suspended , interest goes up and down  so without a buffer bucket to spend from you can come up short at the worst of times ....
> 
> So we find that-saving the distributions towards next years budget works the best for us ....we have a constant flow from the checking account all year with no surprises or coming up short.
> 
> Then next year we see what is in the bucket from all the stuff coming in and anything we need to top it off comes from rebalancing the portfolio back to the allocation we want.
> 
> We found trying to live hand to mouth directly from distributions was to much work as the amounts coming in varied , especially fund distributions....



That’s helpful and very similar to what we have in mind.


----------



## mathjak107

CallmeIshmael said:


> That’s helpful and very similar to what we have in mind.


For more than 30 years I have been using the fidelity insight newsletter ....I can put portfolios together in my sleep , but I like using them because I never have to think about our portfolios.... 30 second update each week keeps you on track ....if I was in control I would always 
be  thinking about future shifts or second guessing the last moves ......

This way we devote really no time to managing a multi 7 figure portfolio ....it is so easy my 80 year old aunt does hers this way ......

There really is nothing to do except for an occasional fund swap ...


----------



## oldmontana

OneEyedDiva said:


> I've had a utility fund for decades even though it's performance may not be as spectacular as other investments. I just invested in another one. I've read articles that tout utilities funds as good choices for bear (down) markets as they are considered "defensive investments". I've experienced the cushioning of the economic blow through bear markets. The advantages of ownership: Performance not necessarily correlated to market conditions, no matter what the economic environment is...people will need to use utilities.  They pay usually healthy dividends and capital gains. Disadvantages: Rises in interest rates have negative impacts on these funds and according to the article below "Utility funds also face difficulty at times in passing along changes in energy prices efficiently to consumers and investors due to price regulations".  I was wondering if anyone here has utility mutual funds or ETFs in his/her portfolio.
> https://www.investopedia.com/articles/mutualfund/08/utility-funds.asp


----------



## mathjak107

Not in many many years .


----------



## oldmontana

Yes, I have owned many utilities and I have done very well.  They not only pay good dividends but their stock prices go up over the years....most but not all.

I have about 40% of my portfolio in utilities.  I subscribe to The Utility Forecaster and Kiplinger's Investing for Income.  

I also use TD Amertrade's research tools. 

Today its hard to get a decent return on CD's and I do not like Bonds.


----------



## Trade

Let's see. Counting the internet, phone, gas, electric, and water, I estimate that I invest about $400 a month in utility bills. Does that count?


----------



## mathjak107

oldmontana said:


> Yes, I have owned many utilities and I have done very well.  They not only pay good dividends but their stock prices go up over the years....most but not all.
> 
> I have about 40% of my portfolio in utilities.  I subscribe to The Utility Forecaster and Kiplinger's Investing for Income.
> 
> I also use TD Amertrade's research tools.
> 
> Today its hard to get a decent return on CD's and I do not like Bonds.




no stocks are ever a proxy for interest bearing instruments- ever .... they still have the risk and volatility of equities regardless of what they are . heck , at&t can move the equal of a few hundred points in the market in a single session  ..... there are reasons we use both  interest bearing stuff and equities and neither should be thought of an equal to the other


----------



## Liberty

mathjak107 said:


> Not in many many years .


math...why haven't you been investing in them, just curious. What do you use in place of that type of stock genre , if anything?


----------



## mathjak107

Liberty said:


> math...why haven't you been investing in them, just curious. What do you use in place of that type of stock genre , if anything?


i see no reason to ...  my diversified equity funds have better returns , and less risk since they are far more diversified . betting on a sector is a much higher risk game then just the volatility of a  diversified etf , fund or index ...
 people don't realize how risky betting on the whims of a sector can be. a balanced fund has the same beta ( volatility) as many utilities , less risk overall and better long term returns.

the bulk of most sector funds is electric power ...  the advent of larger more efficient battery packs and solar panels have been seeing more and more large users go in to generating their own power ... vegas utilities have been getting killed as more and more large users are divorcing themselves from utilities. this is a trend that will continue


----------



## Liberty

mathjak107 said:


> i see no reason to ...  my diversified equity funds have better returns , and less risk since they are far more diversified . betting on a sector is a much higher risk game then just the volatility of a  diversified etf , fund or index ...
> people don't realize how risky betting on the whims of a sector can be. a balanced fund has the same beta ( volatility) as many utilities , less risk overall and better long term returns.
> 
> the bulk of most sector funds is electric power ...  the advent of larger more efficient battery packs and solar panels have been seeing more and more large users go in to generating their own power ... vegas utilities have been getting killed as more and more large users are divorcing themselves from utilities. this is a trend that will continue


What you are saying then, is that you always make  good money, each and every year?


----------



## mathjak107

Liberty said:


> What you are saying then, is that you always make  good money, each and every year?


no  , markets are never consistent year to year in returns , not even utilities .. they are stocks , they are long term investments and generate good returns usually over longer periods of time . even vanguards utility index lost money at times , as well as returns vary . last year it made 4% .... it lost money in 2015   , this year it is up 27%.  so there is no such thing as making good money every year. what you want is an acceptable long term average return with an appropriate risk ...  buying individual stocks , utilities or not  , take on a whole other layer of risk that diversified funds do not have ....namely individual company risk plus market risk  as well as utilities have a high amount of interest rate risk too . rising rates are the kryptonite to them since they run on so much borrowed money


----------



## Liberty

mathjak107 said:


> no  , markets are never consistent year to year in returns , not even utilities .. they are stocks , they are long term investments and generate good returns usually over longer periods of time . even vanguards utility index lost money at times , as well as returns vary . last year it made 4% .... it lost money in 2015   , this year it is up 27%.  so there is no such thing as making good money every year. what you want is an acceptable long term average return with an appropriate risk ...  buying individual stocks , utilities or not  , take on a whole other layer of risk that diversified funds do not have ....namely individual company risk plus market risk  as well as utilities have a high amount of interest rate risk too . rising rates are the kryptonite to them since they run on so much borrowed money


Yeah, but with the interest rates being knocked down so much, would think some utilities - like Duke would be good investments for the next few years.  Its politics!

Think the world's largest battery maker now also needs a recharge...lol.


----------



## mathjak107

Liberty said:


> Yeah, but with the interest rates being knocked down so much, would think some utilities - like Duke would be good investments for the next few years.  Its politics!
> 
> Think the world's largest battery maker now also needs a recharge...lol.



rates stand a pretty good chance of continuing their rise once this trade thing is settled . investors want more  interest to take the risk of going out 10-30 years on bonds and it is investors who control bond rates not the fed.


----------



## Liberty

mathjak107 said:


> rates stand a pretty good chance of continuing their rise once this trade thing is settled . investors want more  interest to take the risk of going out 10-30 years on bonds and it is investors who control bond rates not the fed.


Yes, but with the feds being "beat on" to continue to "beat down" the rates, it doesn't look good for interests to rise unless the political sector changes.


----------



## mathjak107

Liberty said:


> Yes, but with the feds being "beat on" to continue to "beat down" the rates, it doesn't look good for interests to rise unless the political sector changes.


it is irrelevant what the fed wants when it come to bond rates ...that is why we have the inverted yield curve ...the fed wanted higher rates and investors did not see it that way so they bid bond rates lower than the feds  rates for short term .

predicting interest rates is much harder than predicting the stock market .  so betting on one outcome is very risky compared to a broad based fund .


----------



## Liberty

mathjak107 said:


> it is irrelevant what the fed wants when it come to bond rates ...that is why we have the inverted yield curve ...the fed wanted higher rates and investors did not see it that way so they bid bond rates lower than the feds  rates for short term .
> 
> predicting interest rates is much harder than predicting the stock market .  so betting on one outcome is very risky compared to a broad based fund .


Door #1 investment grade bonds - Door #2 Junk bonds!


----------



## mathjak107

I use both ....I use short term high yield bonds as a less volatile proxy for some equities , not bonds .... I have assorted bond funds laddered the same way cd s are laddered as to when the money is needed ....


----------



## Knight

Had some extra fun money last year so decided to do a little over 1 year  experiment of utility stock vs. CD.  According to this calculator combined with yearly income still have to pay a small amount of capital gains tax.
Capital Gains Tax Calculator
https://smartasset.com/investing/capital-gains-tax-calculator#8tnTZYOaVG
The utility I bought 1000 shares of on 5/17/2018 was @$26.75. On 10/1/2018 2nd. dividend reinvested share total 1028.556

1/1/2019 1028.556 X.41 = $421.707 divided by 27.01 = 11.074  + 1028.556 =  1039.63

4/1/2019 1039.63 X .412 = $428.327 divided by 30.79 = 13.911 + 1039.63 = 1053.541

7/1/2019  1053.541 X .412 = $434.058 divided by 30.16 = 14.391 + 1053.541 = 1067.932

10/1/2019 1067.932 X .412= $439.987 divided by 31.31 = 14.052 + 1067.932 = 1081.984

sold on the open this a/m for $33.23 
$35,954.32. - $26,750.00 = $9204.32


A $26,750.00 CD with 3 % rate. would return $802.50 That was used for only for comparative purposes.

The gain isn't exciting but putting $30,000.00 back in fun money and giving my wife the rest to blow on whatever she feels like made me some points.


----------



## Catlady

I don't have any utilities, but they are considered defensive and don't move much in bear markets, don't move much in any markets, but their dividends are good.  I prefer ETFs with a broad base of stocks, such as SPY and QQQ.  Here's a list I found of utility ETFs =

*Top Utilities Funds*

Fidelity® MSCI Utilities ETF.
Invesco S&P 500® Equal Weight Utilts ETF.
Vanguard Utilities ETF.
Utilities Select Sector SPDR® ETF.
iShares US Utilities ETF.
iShares Global Utilities ETF.
Invesco DWA Utilities Momentum ETF.


----------



## oldmontana

Utilities do have done well in the last three three years..some of them we have have more than doubled.  Three are NEE,  AEP and AWK have doubled.  That does not include the dividends.  

Its picking the right stocks.  I do not do indexes.


----------



## treeguy64

I did incredibly well investing in separate utility companies.  I bailed right before the crash of '08.  My profits were great, just as my capital gains taxes were the opposite of great.


----------



## mathjak107

short term returns mean little . take ppl for example.

they are having a very good year up 21% ytd . but even with that and reinvesting all dividends,   investors  saw a mere 4.23% over the last 3 years and 4.94% the last 5 years  as an average return , and that is only that high because they had a good year this year .

in contrast to a diversified fund like the s&p 500 which is up 21.86 ytd ,  14% the last 3 years and 11.05% the last 5 years.

ppl has had some wild swings too so it isn't like you were spared. there is almost a 20% range in movement


----------



## Knight

mathjak107 said:


> short term returns mean little . take ppl for example.
> 
> they are having a very good year up 21% ytd . but even with that and reinvesting all dividends,   investors  saw a mere 4.23% over the last 3 years and 4.94% the last 5 years  as an average return , and that is only that high because they had a good year this year .
> 
> in contrast to a diversified fund like the s&p 500 which is up 21.86 ytd ,  14% the last 3 years and 11.05% the last 5 years.
> 
> ppl has had some wild swings too so it isn't like you were spared. there is almost a 20% range in movement


That little over a year long contrast between A CD & investing was an experiment I wanted to try. 

What works for you doesn't necessarily work for everyone. As part of a portfolio AND not needed to live on, but as a nice gift to our sons as an inheritance PPL works just fine. 

If PPL stock fluctuation was a concern going from $39.00 & change to $26.00 & change would probably panic anyone. Since capital gain isn't the reason for buying & holding PPL stock It didn't matter. A little over three years ago we stopped reinvesting and had the dividend put into cash reserves. That works for us even though it jacked up our federal tax.  At 45,774.677 shares divided 3 ways the way I look at it as getting anything as an inheritance beats getting a bill for putting parents in the ground. Planning ahead I've already told them to sell & use the 774.677 shares for legal expenses. 

But all that might change depending on whether or not PPL merges with a Connecticut utility.


----------



## mathjak107

as i stated over and over , a dividend is no different than just drawing the same dollars from a portfolio of non div payers .. they both will have the same income ,  and the same balance as long as total return is the same ...so   we are  ALL in it for appreciation whether we want to be or not ..dividends are not like interest .

dividends are not on top of  your balance like interest , your value invested is reduced by the amount paid or if reinvested it is exactly what you had before it went ex div ...

so when i see it repeated over and over  by mis-informed people in forums that i want the dividends to live on and i don't care about appreciation , that is a myth that needs correcting . so while i am not saying you are mis-informed , many are .

you need at least the amount of appreciation as the payout just to have markets compound on the same amount you had or you have less invested

itr is no different than pulling 4% from a portfolio  of non div payers and not seeing at least 4% in appreciation ...  no matter what , in the end it is all about total return . some just are misinformed and think that somehow because they get a dividend they are no longer dependent on appreciation  . they could not be more wrong .

personally if i wanted a lower volatility investment than  100% equities and less riskier than betting on the outcome of one company  , a balanced fund like vanguard vbinx was a far better choice than ppl  would have been . vbinx  is 60/40

vbinx returned 9.53% the last 3 years , vs ppl 4.14

the last 5 years vbinx was at 7.72% , ppl  4.98%

the last 10 years vbinx  was at 9.33% -ppl 5.30%

the last 15 years vbinx was at 8.18 -ppl 5.41

risk was way way less in vbinx compared to betting on one company.

this is a perfect example of why small investors left to their own devices don't do as well as they should have. short term trading  is very different than long term investing . individual companies are fine for short term trading ... but if one is comparing long term  investing than proper benchmarks need to be compared .

i made over 90k  just trading in and out of gold , long term treasuries , a few individual stocks and funds  and oil this year aside from my regular portfolio of funds  which rarely change  . but i would not compare this short term trading   to a more diversified long term portfolio.

so i get what you are saying . you had a choice of a short term cd or doing something different  with the money , the same as i had a choice of a short term cd or buying gold  or long term treasuries and then selling out in a  short time frame .

but no one should confuse fun short term trading with what they should be doing for their real long term investing.

there is no time frame except very short ones where buying a utility like ppl would have out performed a balanced fund and did so with less risk


----------



## oldmontana

Some good points but you are pointing to one stock vs a fund.

Using your logic, one like me that depends on dividends to supplement our retirement would have to sell some stock for that income...nothing wrong with that but not my cup of tea. 

I love to get a utility that pays a good dividend that goes up every year and the stock price also goes up.  That is long term investing.

I believe in a diversified  portfolio so utilities are only about 45% of it.


----------



## mathjak107

oldmontana said:


> Some good points but you are pointing to one stock vs a fund.
> 
> Using your logic, one like me that depends on dividends to supplement our retirement would have to sell some stock for that income...nothing wrong with that but not my cup of tea.
> 
> I love to get a utility that pays a good dividend that goes up every year and the stock price also goes up.  That is long term investing.
> 
> I believe in a diversified  portfolio so utilities are only about 45% of it.


Tax wise selling the dollars in stock or a fund is far more efficient then the company  selling off a piece of your value and handing it to you. You are taxed on the entire dividend.  Selling a bit of shares has you taxed only on the gain


----------



## oldmontana

mathjak107 said:


> Tax wise selling the dollars in stock or a fund is far more efficient then the company  selling off a piece of your value and handing it to you. You are taxed on the entire dividend.  Selling a bit of shares has you taxed only on the gain


----------



## oldmontana

"You are taxed on the entire dividend."

You are assuming that everyone pays Federal income taxes.  Many that are retired do not.   For the last few years we have not.  We had our own business and instead of drawing large salaries we put money back into our business so we get only about $1,500.00 a month from SS.   Our business was a corporation...we as individuals (not the corporation) owned the building our business was in....income from that we did not pay SS taxes. We sold the building.

Bottom line there are many different situations.


----------



## mathjak107

oldmontana said:


> "You are taxed on the entire dividend."
> 
> You are assuming that everyone pays Federal income taxes.  Many that are retired do not.   For the last few years we have not.  We had our own business and instead of drawing large salaries we put money back into our business so we get only about $1,500.00 a month from SS.   Our business was a corporation...we as individuals (not the corporation) owned the building our business was in....income from that we did not pay SS taxes. We sold the building.
> 
> Bottom line there are many different situations.


If you pay no taxes then either selling a share amount or them selling a piece of your share value is the same thing ...same cash flow ,same balance


----------



## WhatInThe

Use utilities and utility funds for dividends and distributions-income. Every now and then tech related utilities experience bumps, spikes etc that make them a worth buy low sell high stock.


----------



## Liberty

WhatInThe said:


> Use utilities and utility funds for dividends and distributions-income. Every now and then tech related utilities experience bumps, spikes etc that make them a worth buy low sell high stock.


That's what I'm waiting for right now...a nice low price on a good dividend paying utility stock!
If you know of any good buys out there now, please let me know.  Thanks!


----------



## oldmontana

mathjak107 said:


> If you pay no taxes then either selling a share amount or them selling a piece of your share value is the same thing ...same cash flow ,same balance



----------------------------------------------------------------------------------------------------------

I do not understand that.  The fact is that a company decides what they do with their profits...they can use part of their profits to pay dividends, but back stock, or use profits to expand their business ..that could be buying another company or updating their generation plants etc.

The fact I pay no taxes is not because I am selling any of my stock.


----------



## Knight

oldmontana said:


> Bottom line there are many different situations.



I think that is a great statement.


----------



## CountryBoy

OneEyedDiva said:


> I've had a utility fund for decades even though it's performance may not be as spectacular as other investments. I just invested in another one. I've read articles that tout utilities funds as good choices for bear (down) markets as they are considered "defensive investments". I've experienced the cushioning of the economic blow through bear markets. The advantages of ownership: Performance not necessarily correlated to market conditions, no matter what the economic environment is...people will need to use utilities.  They pay usually healthy dividends and capital gains. Disadvantages: Rises in interest rates have negative impacts on these funds and according to the article below "Utility funds also face difficulty at times in passing along changes in energy prices efficiently to consumers and investors due to price regulations".  I was wondering if anyone here has utility mutual funds or ETFs in his/her portfolio.
> https://www.investopedia.com/articles/mutualfund/08/utility-funds.asp


Keep in mind, that in investing, there is something called Mean Reversion
https://www.investopedia.com/terms/m/meanreversion.asp


----------



## mathjak107

no , i  wont bother with utilities as a sector . never did



electricity and natural gas  consumption is predictable — we know that growth will likely be proportional to population growth. Seeing as this country adds new people quite slowly — the population expands at about 0.7% to 1% per year —so growth is much less   than your average S&P 500 component.   a balanced portfolio has provided better growth , better holding up in a recession and better diversification than buying a sector investment in just utilities 


In a low-yield climate like we have now, investors snap up utilities like they’re going out of style. Currently, the utility industry trades at a 20% premium to the S&P 500 on a price-to-earnings basis.

Historically, it traded at a 20% discount to the S&P 500. Should valuations revert to the mean, stock prices will have to drop by 33%.


----------



## Gary O'

I first invested in utilities
Pretty much a roll of the dice



The returns weren't near as good as railroads


----------



## OneEyedDiva

CountryBoy said:


> Keep in mind, that in investing, there is something called Mean Reversion
> https://www.investopedia.com/terms/m/meanreversion.asp


Thank you for this article CountryBoy.


----------



## oldmontana

mathjak107 said:


> no , i  wont bother with utilities as a sector . never did
> 
> 
> 
> electricity and natural gas  consumption is predictable — we know that growth will likely be proportional to population growth. Seeing as this country adds new people quite slowly — the population expands at about 0.7% to 1% per year —so growth is much less   than your average S&P 500 component.   a balanced portfolio has provided better growth , better holding up in a recession and better diversification than buying a sector investment in just utilities
> 
> 
> In a low-yield climate like we have now, investors snap up utilities like they’re going out of style. Currently, the utility industry trades at a 20% premium to the S&P 500 on a price-to-earnings basis.
> 
> Historically, it traded at a 20% discount to the S&P 500. Should valuations revert to the mean, stock prices will have to drop by 33%.


----------



## oldmontana

mathjak107 said:


> no , i  wont bother with utilities as a sector . never did
> 
> 
> 
> electricity and natural gas  consumption is predictable — we know that growth will likely be proportional to population growth. Seeing as this country adds new people quite slowly — the population expands at about 0.7% to 1% per year —so growth is much less   than your average S&P 500 component.   a balanced portfolio has provided better growth , better holding up in a recession and better diversification than buying a sector investment in just utilities
> 
> 
> In a low-yield climate like we have now, investors snap up utilities like they’re going out of style. Currently, the utility industry trades at a 20% premium to the S&P 500 on a price-to-earnings basis.
> 
> Historically, it traded at a 20% discount to the S&P 500. Should valuations revert to the mean, stock prices will have to drop by 33%.


 ====================================================================
"Historically, it traded at a 20% discount to the S&P 500. Should valuations revert to the mean, stock prices will have to drop by 33%."

With their dividend I do not think that will happen.  I have owned individual utilities for over 40 years and as a rule there stock prices and dividends keep going up.


----------



## mathjak107

oldmontana said:


> ====================================================================
> "Historically, it traded at a 20% discount to the S&P 500. Should valuations revert to the mean, stock prices will have to drop by 33%."
> 
> With their dividend I do not think that will happen.  I have owned individual utilities for over 40 years and as a rule there stock prices and dividends keep going up.


Everything is as compared to what ...looking at ppl as an example for taking on the risk of   an individual company,  the last 3 , 5, or 10 years gave you almost half of what the s&p 500 did  and that includes dividends and that is with no individual company risk In the s&p ... in fact a 60/40 balanced fund blew the doors off ppl with less risk  ......in the investing world just going up does not cut it , it is all about returns and risk taken


----------



## OneEyedDiva

Gary O' said:


> I first invested in utilities
> Pretty much a roll of the dice
> 
> View attachment 80039
> 
> The returns weren't near as good as railroads
> 
> View attachment 80041


I guess this was my first foray into utilities too Gary!  LOL


----------



## oldmontana

mathjak107 said:


> Everything is as compared to what ...looking at ppl as an example for taking on the risk of   an individual company,  the last 3 , 5, or 10 years gave you almost half of what the s&p 500 did  and that includes dividends and that is with no individual company risk In the s&p ... in fact a 60/40 balanced fund blew the doors off ppl with less risk  ......in the investing world just going up does not cut it , it is all about returns and risk taken


----------



## oldmontana

mathjak107 said:


> Everything is as compared to what ...looking at ppl as an example for taking on the risk of   an individual company,  the last 3 , 5, or 10 years gave you almost half of what the s&p 500 did  and that includes dividends and that is with no individual company risk In the s&p ... in fact a 60/40 balanced fund blew the doors off ppl with less risk  ......in the investing world just going up does not cut it , it is all about returns and risk taken
> =======================================================================
> PPL ..one stock and I do not or have ever owned PPL.
> 
> We own many utilities stock and it is about returns and risks.. that is why we have about 50% of our three portfolios in utilities.
> 
> It seems you have a problem with utilities,  fine do not invest in them.


----------



## mathjak107

I have no problem with utilities ...but I do try to give people enough of a  view  So they don’t run on myth and believing their own bull shit ,which is what most learn from other misinformed people ....investing in individual companies and being subject to the outcome of those individual companies no matter what the field takes on a whole other level of risk compared to broad index’s and just volatility .

once you can argue for and against an investment equally well , then you can evaluate that investment in a better light .... generally my experience is many of those who invest in utilities do so based on information they may have heard or read from others . They tend to be fairly weak in investing knowledge or they likely would have far broader diversified portfolios , but somehow got sold on them being safer or very confused as to what the dividend represents and think it is like interest.

for those who understand what they own and what the risks are great , but for those who are buying these things because they are gun shy investors , need to get better educated so they can make a better informed decision as to what is right for them , before they screw up and regret it.

the less you have the more important it is to get the investing part right ...like I said , it has no financial logicall sense to buying a  ppl as an example when it is riskier than a balanced fund , which would be putting more money in your pocket with less risk and no individual company risk from missed earnings  or what PGE  is going through.

the biggest problem is Few understand dividends ....they think it is like interest ... it is not ..it is the company selling off a piece of your share value with every penny paid out ...this is a major misunderstanding that people have and it is a concept they fail to grasp ...there is no extra money like interest which goes on top of principal .

rather these utility dividends are no different than fund distributions.. you go to sleep with x amount and wakeup the next day with the exact same dollars only consisting of more shares at a lower price ..your dollars compounded on by markets has not changed if you reinvested or they are less then you had if  you spend them ...it is never ever about dividends ,it is only about total return.....
 Yet so few grasp this


----------



## Colli❤️

I contacted Regal Assets about rolling over my IRA/401(k) into precious metals and cryptocurrency. Nobody can touch that and if inflation hits will be a great asset to have here is where I went to for information https://regalassets.com/request-free-gold-investment-kit?id=0


----------



## mathjak107

don't need that stuff , i am a Nigerian prince


----------



## mathjak107

even utilities were no match for this sell off . PPL down a wicked 26% including dividends in a  month


----------



## Liberty

Got a good friend in New York who told me yesterday 'I'm afraid to look at my portfolio".  

Gotta give it to my hub though...that pro poker player  side came out in him when last month he said "you know, 
if I was in that @#$% market, I'd sell everything out NOW!  He said...how could you not see this coming.


----------



## mathjak107

Liberty said:


> Got a good friend in New York who told me yesterday 'I'm afraid to look at my portfolio".
> 
> Gotta give it to my hub though...that pro poker player  side came out in him when last month he said "you know,
> if I was in that @#$% market, I'd sell everything out NOW!  He said...how could you not see this coming.


down turns are always part of the cycle . we just don't know when … no one sees them coming because what triggers them is not things on the radar .

once they appear these daily negatives are written off as just noise - that is until they are not .

then machine selling today drives us down in days what used to take months


----------



## Liberty

mathjak107 said:


> down turns are always part of the cycle . we just don't know when … no one sees them coming because what triggers them is not things on the radar .
> 
> once they appear these daily negatives are written off as just noise - that is until they are not .
> 
> then machine selling today drives us down in days what used to take months


Well, hub saw it clearly .  He'd have had a lot of bucks to invest back in...lol
He likes pro poker.  Way less variables and more skill I guess ...lol. 

Hey, its only money.  Don't ever play with what you can't afford to lose anyway.


----------



## mathjak107

Liberty said:


> Well, hub saw it clearly .  He'd have had a lot of bucks to invest back in...lol
> He likes pro poker.  Way less variables and more skill I guess ...lol.
> 
> Hey, its only money.  Don't ever play with what you can't afford to lose anyway.


Long term no one ever lost a penny in any 10 or 20 year period with a 50/50 mix ...on the other hand many lost money via inflation hiding out in a bank


----------



## Liberty

mathjak107 said:


> Long term no one ever lost a penny in any 10 or 20 year period with a 50/50 mix ...on the other hand many lost money via inflation hiding out in a bank


That's your story...lol.  Know a lot of folks that have lost a lot of money in the market and a lot that didn't have 10 or 20 years to recoup.    To each his own.  Also know quite a few that have made lots of money in other enterprises rather than the market.  Those sectors been very very good to them.  They are living well and enjoying their elder years.  Can only wish that for everyone, no matter what mode of investment choices they choose to make (or not).  You can't take it with you, so enjoy it while you are here on planet earth.


----------



## Aunt Bea

IMO the big difference is in people who play the markets and people that invest in the markets.

When I was young I had my share of losses playing hot tips and sure things in the financial markets.

Now I invest in boring balanced mutual funds that grow steadily over time with very little blood sweat and tears.

I don't have any big wins but I also don't have any big losses, it works for me.


----------



## Liberty

Aunt Bea said:


> IMO the big difference is in people who play the markets and people that invest in the markets.
> 
> When I was young I had my share of losses playing hot tips and sure things in the financial markets.
> 
> Now I invest in boring balanced mutual funds that grow steadily over time with very little blood sweat and tears.
> 
> I don't have any big wins but I also don't have any big losses, it works for me.


Guess if you don't have to wait 10 years to get back the money you thought you did have then you are doing fine as frog's hair...lol.


----------



## Catlady

I only have ONE mutual fund, an original pick in my IRA account, don't like them, am using it for my RMD withdrawals.  I have a few ETFs and the rest are stocks. I like the ETFs, similar to mutuals, because of their safety and dividends, but I prefer stocks.  With stocks you have bigger losses, but you also have bigger gains.  I like some excitement, my life is already too boring.


----------



## mathjak107

Liberty said:


> That's your story...lol.  Know a lot of folks that have lost a lot of money in the market and a lot that didn't have 10 or 20 years to recoup.    To each his own.  Also know quite a few that have made lots of money in other enterprises rather than the market.  Those sectors been very very good to them.  They are living well and enjoying their elder years.  Can only wish that for everyone, no matter what mode of investment choices they choose to make (or not).  You can't take it with you, so enjoy it while you are here on planet earth.


Bad investor behavior loses money ...markets and diversified funds have only gone higher long term so you can’t blame markets ...people panic , people use long term investments for short term needs


----------



## JimBob1952

OneEyedDiva said:


> I've had a utility fund for decades even though it's performance may not be as spectacular as other investments. I just invested in another one. I've read articles that tout utilities funds as good choices for bear (down) markets as they are considered "defensive investments". I've experienced the cushioning of the economic blow through bear markets. The advantages of ownership: Performance not necessarily correlated to market conditions, no matter what the economic environment is...people will need to use utilities.  They pay usually healthy dividends and capital gains. Disadvantages: Rises in interest rates have negative impacts on these funds and according to the article below "Utility funds also face difficulty at times in passing along changes in energy prices efficiently to consumers and investors due to price regulations".  I was wondering if anyone here has utility mutual funds or ETFs in his/her portfolio.
> https://www.investopedia.com/articles/mutualfund/08/utility-funds.asp


I own a utility ETF as well as shares in Southern Company, Dominion and Wisconsin Electric.  We have been very happy with performance, even in the current selloff.


----------



## OneEyedDiva

Catlady said:


> I only have ONE mutual fund, an original pick in my IRA account, don't like them, am using it for my RMD withdrawals.  I have a few ETFs and the rest are stocks. I like the ETFs, similar to mutuals, because of their safety and dividends, but I prefer stocks.  With stocks you have bigger losses, but you also have bigger gains.  I like some excitement, my life is already too boring.


I started with mutual funds and have only owned three individual stocks....PPD (which used to be Pre Paid Legal), Apple and Facebook. I sold PPD over a decade ago to help my son and never got back into it. Apple and FB are still up 175% and 346% respectively, even with the dive the market has taken, but I don't have that many shares of either. Being I'm already retired, I feel safer being in funds and ETFs. I like that I can see realtime share prices when I buy ETFs. I only own two different ones...I wish I'd started with them earlier and had more.


----------



## OneEyedDiva

Colli❤ said:


> I contacted Regal Assets about rolling over my IRA/401(k) into precious metals and cryptocurrency. Nobody can touch that and if inflation hits will be a great asset to have here is where I went to for information https://regalassets.com/request-free-gold-investment-kit?id=0


Crypto currency is too volatile; I wouldn't want my retirement assets tied up in them. I've lost 85% of my very, very tiny investment (less than a half of a percent of assets) in Litecoin, which I invested in when my son did, just out of curiosity  It's in my son's account and I'm leaving it for  him anyway, so hopefully it climbs up by the time he needs it. I remember Bitcoin had risen to the $20,000 rage per coin. Now it's a little over $5,000.


----------



## treeguy64

Made big bucks with utility stocks, many years ago.  From what I've heard, they're still a good investment.  Then again, what can you count on, these days?

I'm back out of the market, as of yesterday.  I think I may be out, for good.  Insult to injury, though, I'll still be paying taxes on my (reduced) gains.  I guess it could be worse, as in no taxes, but BIG losses.


----------



## OneEyedDiva

treeguy64 said:


> Made big bucks with utility stocks, many years ago.  From what I've heard, they're still a good investment.  Then again, what can you count on, these days?
> 
> I'm back out of the market, as of yesterday.  I think I may be out, for good.  Insult to injury, though, I'll still be paying taxes on my (reduced) gains.  I guess it could be worse, as in no taxes, but BIG losses.


Don't tell me you panic sold Treeguy! And on the day of the worst point drop ever!?


----------



## treeguy64

OneEyedDiva said:


> Crypto currency is too volatile; I wouldn't want my retirement assets tied up in them. I've lost 85% of my very, very tiny investment (less than a half of a percent of assets) in Litecoin, which I invested in when my son did, just out of curiosity  It's in my son's account and I'm leaving it for  him anyway, so hopefully it climbs up by the time he needs it. I remember Bitcoin had risen to the $20,000 rage per coin. Now it's a little over $5,000.


I'd NEVER invest in any of that digital currency.  To me it's all garbage, with some smoke and mirrors, and heavy tech-speak.  Please understand, if YOU understand it, thoroughly, AND you've made good gains on your investments, then my hat's off to you!


----------



## treeguy64

OneEyedDiva said:


> Don't tell me you panic sold Treeguy! And on the day of the worst point drop ever!?


My stocks were very conservative, gain-wise, and stability-wise, so they did NOT get hit very hard.  I also had my Sell order in before the giant slide, so I caught a small break.  Bottom line: I made 10% on my original investment, so I'm OK with that.  Fairly short-term, in truth.


----------



## Catlady

I'm weird, I guess, I LOVE bear markets!  I've been saving cash and had a list of stocks I want to buy first time or add to, and the buying goal for them is at 52 week low or 50% off 52 week high prices.  That's good enough for me, no matter how much lower they go after that.  This old bull NEEDS to die so we can begin anew with a new bull.  Weird how it (seems) to have died on its 11th year anniversary (3/9/2009).  Once this pandemic is over we can start going up again.


----------



## 911

Utilities were a good investment at one time, back when they were paying a decent dividend. A lot of Seniors enjoyed that ride.

I have never been a Buffet or Cuban guy because I don’t have the money they do. I saw yesterday where Cuban bought Twitter shares. The stock is down somewhere around 40%. That’s probably a good investment, as long as it recovers. Otherwise, they’ll make an a$$ out of him on SNL.


----------



## Catlady

OneEyedDiva said:


> I feel safer being in funds and ETFs. I like that I can see realtime share prices when I buy ETFs. I only own two different ones...I wish I'd started with them earlier and had more.



There are two ETFs that I like and plan to add to whenever possible, SPY and QQQ.  I plan to make them my core holdings. 

I'm also buying the etf  MJ now that pot is down in the dumps.  Once pot is federally legalized, those pot companies are going to do well, plus MJ pays a good dividend of 6%+.  I don't use pot, but will if I have pain in the future, rather use that than opiates.  And most old people do suffer some form of pain and pot use is increasing in the over-65 population.


----------



## Liberty

Catlady said:


> There are two ETFs that I like and plan to add to whenever possible, SPY and QQQ.  I plan to make them my core holdings.
> 
> I'm also buying the etf  MJ now that pot is down in the dumps.  Once pot is federally legalized, those pot companies are going to do well, plus MJ pays a good dividend of 6%+.  I don't use pot, but will if I have pain in the future, rather use that than opiates.  And most old people do suffer some form of pain and pot use is increasing in the over-65 population.


You sound excited Catlady...having fun.  So happy to hear that among us oldsters.  We all need something to have fun with.


----------



## JimBob1952

911 said:


> Utilities were a good investment at one time, back when they were paying a decent dividend. A lot of Seniors enjoyed that ride.
> 
> I have never been a Buffet or Cuban guy because I don’t have the money they do. I saw yesterday where Cuban bought Twitter shares. The stock is down somewhere around 40%. That’s probably a good investment, as long as it recovers. Otherwise, they’ll make an a$$ out of him on SNL.


I bought shares of Southern Company somewhere around 1998 for $14.  Even after the selloff they stand at $54.  I have been receiving dividends in the 4-5% range all that time.  So I have definitely enjoyed the ride, and will continue to do so.


----------



## JimBob1952

Catlady said:


> I'm weird, I guess, I LOVE bear markets!  I've been saving cash and had a list of stocks I want to buy first time or add to, and the buying goal for them is at 52 week low or 50% off 52 week high prices.  That's good enough for me, no matter how much lower they go after that.  This old bull NEEDS to die so we can begin anew with a new bull.  Weird how it (seems) to have died on its 11th year anniversary (3/9/2009).  Once this pandemic is over we can start going up again.


Like your attitude Catlady!


----------



## Catlady

Liberty said:


> You sound excited Catlady...having fun.  So happy to hear that among us oldsters.  We all need something to have fun with.


I have as much fun buying/selling stocks as some women enjoy buying clothes or shoes, which I never cared for.   My daughter will probably end up enjoying the fruits of my labor, but in the meantime I'm having fun ''gambling''.  LOL


----------



## oldmontana

JimBob1952 said:


> I bought shares of Southern Company somewhere around 1998 for $14.  Even after the selloff they stand at $54.  I have been receiving dividends in the 4-5% range all that time.  So I have definitely enjoyed the ride, and will continue to do so.


I could name many utility stocks I have purchased over the years that gone up over 200% plus the dividends they have paid over the years.


----------



## JimBob1952

oldmontana said:


> I could name many utility stocks I have purchased over the years that gone up over 200% plus the dividends they have paid over the years.


That is a wonderful thing.  Good luck during the current unpleasantness, it will pass. (Up almost 2000 points today, not that it means anything)


----------



## Catlady

JimBob1952 said:


> That is a wonderful thing.  Good luck during the current unpleasantness, it will pass. (*Up almost 2000 points today*, not that it means anything)


I remember when the DOW used to go up-down 3-5 points a day.  Lately it was 100+ a day, and now it's 1000+ a day.  I'm assuming it's because of the computerized trades or the virus or whatever.  We'll see what happens Monday, another 1000-2000 up or down day?  It's a roller coaster ride for sure!


----------



## oldman

Catlady said:


> I remember when the DOW used to go up-down 3-5 points a day.  Lately it was 100+ a day, and now it's 1000+ a day.  I'm assuming it's because of the computerized trades or the virus or whatever.  We'll see what happens Monday, another 1000-2000 up or down day?  It's a roller coaster ride for sure!


Your sentence, “We’ll see what happens Monday.” That’s what bothers me. Too many things can happen over a weekend and most of them seem to be bad. That puts us small investors at a disadvantage.


----------



## mathjak107

90% of all trading volume in a day is machines with no human interaction...they just follow the software


----------



## OneEyedDiva

treeguy64 said:


> I'd NEVER invest in any of that digital currency.  To me it's all garbage, with some smoke and mirrors, and heavy tech-speak.  Please understand, if YOU understand it, thoroughly, AND you've made good gains on your investments, then my hat's off to you!


Treeguy...what I invested amounted to "pocket change". I admit though, I wish I had invested in Bitcoin when I first heard about it which was a few dollars a coin. Even after the spike at $20,000 and the subsequent slide down to $5,000 it still would have been a nice profit. I do not even consider what I invested in Litecoin part of my portfolio. I'm leaving it for my son. It's good you didn't lose out. Sounds like when I sold some shares during the 2008 recession. I didn't lose money at all; that too was a relatively conservative fund.


----------



## Catlady

oldman said:


> Your sentence, “We’ll see what happens Monday.” That’s what bothers me. Too *many things can happen over a weekend *and most of them seem to be bad. That puts us small investors at a disadvantage.


I've been paying attention to after hours and pre market prices.  I was able to buy one stock at $48 after hours (my goal was $48), and when it opened the next day it shot-up to $54.  I didn't know I could do that before that day.  *I don't know if they allow it on the weekends.* Right now, there are some stocks that have gone down after hours, but not much. Check out your stocks.


----------



## oldman

mathjak107 said:


> 90% of all trading volume in a day is machines with no human interaction...they just follow the software


I’ve read this also on the CNBC website. That makes perfect sense and being that technology is what is, I would expect it. Every trade I make is over the Internet. I don’t own a seat on the Exchange and even then, the men and women sitting in the gallery trade electronically also. 


Catlady said:


> I've been paying attention to after hours and pre market prices.  I was able to buy one stock at $48 after hours (my goal was $48), and when it opened the next day it shot-up to $54.  I didn't know I could do that before that day.  *I don't know if they allow it on the weekends.* Right now, there are some stocks that have gone down after hours, but not much. Check out your stocks.


If you deal with a brokerage house that does after hours trader, you’re good to go.


----------



## Catlady

oldman said:


> If you deal with a brokerage house that does after hours trader, you’re good to go.



I use Ameritrade, love it.


----------



## mathjak107

oldman said:


> I’ve read this also on the CNBC website. That makes perfect sense and being that technology is what is, I would expect it. Every trade I make is over the Internet. I don’t own a seat on the Exchange and even then, the men and women sitting in the gallery trade electronically also.
> 
> If you deal with a brokerage house that does after hours trader, you’re good to go.


No trading on weekends


----------



## oldman

mathjak107 said:


> No trading on weekends


Yes, thank goodness. However, geopolitical events, a refinery fire and other bad news can sure play havoc on the market come Monday morning.


----------



## oldman

Catlady said:


> I use Ameritrade, love it.


That’s one of the three that I use.


----------



## OneEyedDiva

Catlady said:


> I use Ameritrade, love it.


I don't like Ameritrade but am keeping my relatively small amount invested there because they charge to transfer the funds. No other brokerage has done that and I've transferred assets quite a few times over the years.  I'm hoping that with the Schwab merger, at some point in time I can just transfer over to Schwab without that hefty $75 transfer fee.  Last year, someone in the brokerage took it upon themselves to cancel my reinvest dividend option. No one could tell me who did it but the rep I spoke with did put the option back on. Also, I don't like the Ameritrade site interface.


----------



## Catlady

OneEyedDiva said:


> I don't like Ameritrade but am keeping my relatively small amount invested there because they charge to transfer the funds. No other brokerage has done that and I've transferred assets quite a few times over the years.  I'm hoping that with the Schwab merger, at some point in time I can just transfer over to Schwab without that hefty $75 transfer fee.  Last year, someone in the brokerage took it upon themselves to cancel my reinvest dividend option. No one could tell me who did it but the rep I spoke with did put the option back on. Also, I don't like the Ameritrade site interface.


I thought they all charge that $75 transfer fee.   I had to when I transferred over from MerrilLynch.  For me it was worth it, Ameritrade charged much less for trades than ML.  The only thing I don't like about Ameritrade is that they don't show  my cost for each trade, only the average.  At Vanguard I can look up every trade cost per symbol.


----------



## OneEyedDiva

Catlady said:


> I thought they all charge that $75 transfer fee.   I had to when I transferred over from MerrilLynch.  For me it was worth it, Ameritrade charged much less for trades than ML.  The only thing I don't like about Ameritrade is that they don't show  my cost for each trade, only the average.  At Vanguard I can look up every trade cost per symbol.


I've transferred from American Century, Vanguard, Saturna and what used to be Dean, Witter, Reynolds as well as others decades ago....no fees. I can't remember if Fidelity charged a fee. If they did I know it wasn't more than $45.  Ameritrade does show the cost of your trades, but you have to go through layers to find it. One of the things I don't like about their site. I think you will find cost per trade on their history page.


----------



## oldmontana

OneEyedDiva said:


> I've transferred from American Century, Vanguard, Saturna and what used to be Dean, Witter, Reynolds as well as others decades ago....no fees. I can't remember if Fidelity charged a fee. If they did I know it wasn't more than $45.  Ameritrade does show the cost of your trades, but you have to go through layers to find it. One of the things I don't like about their site. I think you will find cost per trade on their history page.


I use TD Ameritrade and I get trade conformation in the mail.  They show the cost of trade (which now is Zero)   Never had a problem with them. I also like the year end information they send with has all the information I need to do my taxes..no need for me to list my transactions.


----------



## Catlady

Ooops, by the ''cost of trade'', I meant what I paid each time for  a stock.  Ameritrade shows it as an average on each symbol on the ''positions'' page, or I can look up each transaction in the ''confirmations'' page.  At Vanguard I can click on the symbol and it will tell me what I paid for each transaction of that symbol and the date I bought it (much more convenient).  What I do at Ameritrade is print out each full year's confirmation page and keep that as a handy record when I need to look up the trades.  The year end info stays with my tax return in case I get audited.

Diva, I'm jealous that you didn't have to pay those pesky transfer fees.


----------



## mathjak107

For anyone who thought because stocks pay dividends they are immune to these drops guess again ...I remember people touting how safe ppl was ..well including dividends it lost 34% the last 3 months .

Stocks are stocks and they are never a replacement for fixed income in a balanced portfolio


----------



## OneEyedDiva

mathjak107 said:


> For anyone who thought because stocks pay dividends they are immune to these drops guess again ...I remember people touting how safe ppl was ..well including dividends it lost 34% the last 3 months .
> 
> Stocks are stocks and they are never a replacement for fixed income in a balanced portfolio


I think anyone who's been investing for several years (especially if before 2008 or 1987) realizes dividend paying investments are not immune to steep declines in bear markets and recessions.  I would hope they do anyway.


----------



## mathjak107

I can tell you from what I see on financial forums that is not the case .....people think some how because a company gives you a forced withdrawal of your own money they are some how immune from all the things that effect stocks .

I wish I had a dollar for every time some gave the poor advice to buy dividend paying stocks as a. Proxy for bonds


----------



## oldmontana

mathjak107 said:


> I can tell you from what I see on financial forums that is not the case .....people think some how because a company gives you a forced withdrawal of your own money they are some how immune from all the things that effect stocks .
> 
> I wish I had a dollar for every time some gave the poor advice to buy dividend paying stocks as a. Proxy for bonds


Back with your forced withdrawal "thing" and bashing of dividend paying stocks.


----------



## mathjak107

oldmontana said:


> Back with your forced withdrawal "thing" and bashing of dividend paying stocks.


I don’t bash them , but people here get misled by misinformation,myth and poor advice from other misinformed people ....dividend paying stocks depending on the stock are fine investments  ...BUT IF SOMEONE WANTS A FIXED INCOME INVESTMENT BECAUSE THEY HAVE A BALANCED PORTFOLIO,   PEOPLE TELLING THEM TO BUY DIVIDEND PAYING  STOCKS IS HORRIBLE ADVICE  ...STOCKS ARE STOCKS   END OF STORY ....LIKE I SAID THEY ARE FINE FOR THE EQUITY SIDE OF THINGS. but they are never a replacement for the fixed income side of a portfolio..

Plus it is obvious most have no clue what a dividend represents or how they work ...that is a given here.

Some take the time to learn while others go on believing their own bull sh*t


----------



## mathjak107

CallmeIshmael said:


> I think you are making part of my point.  I would rather reallocate excess cash than giving management the opportunity to do so.  Management is notoriously bad an reinvesting their own cash (there are always exceptions).  There’s no downside to dividends in a tax deferred account.
> 
> And selling equities is easy to do in a bull market with healthy gains, not sure it will be as easy in a deep bear market - and if management does not feel comfortable making distributions because they need the cash, then they’ll keep it - otherwise I’ll take that cash dividend and buy whatever is cheapest within my portfolio (i.e., rebalance).


With many reinvesting the dividends anyway it is a moot point ...personally if I didn’t trust mgmt to invest the company money I wouldn’t own the stock.

in fact many of the bluest of blue chip dividend payers have been the most irresponsible with company money .


case in point .

AT&T paid $100 billion to enter the cable business

AT&T thought it would be a good idea to diversify by paying $100 billion to take on cable company TCI. It was wrong! AT&T broke itself up a few years later and sold off the cable assets.

AT&T tried to elbow its way into the personal computer business with a hostile $7 billion takeover of NCR. It didn't work, and AT&T later spun the company back out at a $4 billion valuation.

Microsoft paid an estimated $500 million for mobile phone company Danger. It was supposed to be working on new phones for Microsoft, but most of the key employees left the company. The end result of the acquisition was the Kin, a social smartphone from Microsoft that totally bombed.

Cisco probably bought Pure Digital, the company that makes the Flip, right at the peak of its value in 2009. Since then high definition video cameras have been built into just about every smartphone making the Flip pretty much worthless in the long run. Which is probably why Cisco killed the $590 million acquisition earlier this year.

After Google bought DoubleClick, Microsoft tried to keep up by buying ad company aQuantive for $6 billion. The acquisition never really worked out. The aQuantive executives left two years after the deal closed and the technology was discarded.
..
AOL-Time Warner is obviously the worst

i can go on and on


----------



## oldmontana

mathjak107 said:


> With many reinvesting the dividends anyway it is a moot point ...personally if I didn’t trust mgmt to invest the company money I wouldn’t own the stock.
> 
> in fact many of the bluest of blue chip dividend payers have been the most irresponsible with company money .
> 
> 
> case in point .
> 
> AT&T paid $100 billion to enter the cable business
> 
> AT&T thought it would be a good idea to diversify by paying $100 billion to take on cable company TCI. It was wrong! AT&T broke itself up a few years later and sold off the cable assets.
> 
> AT&T tried to elbow its way into the personal computer business with a hostile $7 billion takeover of NCR. It didn't work, and AT&T later spun the company back out at a $4 billion valuation.
> 
> Microsoft paid an estimated $500 million for mobile phone company Danger. It was supposed to be working on new phones for Microsoft, but most of the key employees left the company. The end result of the acquisition was the Kin, a social smartphone from Microsoft that totally bombed.
> 
> Cisco probably bought Pure Digital, the company that makes the Flip, right at the peak of its value in 2009. Since then high definition video cameras have been built into just about every smartphone making the Flip pretty much worthless in the long run. Which is probably why Cisco killed the $590 million acquisition earlier this year.
> 
> After Google bought DoubleClick, Microsoft tried to keep up by buying ad company aQuantive for $6 billion. The acquisition never really worked out. The aQuantive executives left two years after the deal closed and the technology was discarded.
> ..
> AOL-Time Warner is obviously the worst
> 
> i can go on and on



"i can go on and on"  do what you want.

You bash dividend paying utility stocks.  You do not understand the fact that because a company pays out part of their profits in dividends it does not effect the FUTURE price of that stock.

You have a lot to learn.


----------



## mathjak107

oldmontana said:


> "i can go on and on"  do what you want.
> 
> You bash dividend paying utility stocks.  You do not understand the fact that because a company pays out part of their profits in dividends it does not effect the FUTURE price of that stock.
> 
> You have a lot to learn.


Stop...you learned nothing about how things work ,,,So just go on believing your own bull..there is no need to keep chiming in spreading more misinformation...total return determines a stocks out come not whether it pays a dividend or not


You can never pull money out of your invested dollars  via a dividend if  a stock nor a portfolio without the market action on the balance being effected long term.

And no I will not explain the math to you again


----------



## Knight

mathjak107 said:


> For anyone who thought because stocks pay dividends they are immune to these drops guess again ...I remember people touting how safe ppl was ..well including dividends it lost 34% the last 3 months .
> 
> Stocks are stocks and they are never a replacement for fixed income in a balanced portfolio


Didn't say PPL was safe just posted that PPL has consistently paid a dividend for over 60 years. The recent increase works for us. I think you mentioned somewhere that companies that increase their dividend were better than the % gain due to a stock price price dropping.

At our age if buying low were the objective I would have placed an order to buy 5000 shares of PPL on the open this Monday. PPL is not an exciting stock just one that is positioned well to recover decently when the fear dissipates.  To be clear at our age the expectation for a gain that would make a difference just isn't there.  With 8 income sources most of what we have will make great non taxed inheritance for our sons. One of the reasons our planning included no state taxes on inheritance. 

Everything is on paper so there is no gain or loss until the paper is turned into cash.


----------



## mathjak107

Knight said:


> Didn't say PPL was safe just posted that PPL has consistently paid a dividend for over 60 years. The recent increase works for us. I think you mentioned somewhere that companies that increase their dividend were better than the % gain due to a stock price price dropping.
> 
> At our age if buying low were the objective I would have placed an order to buy 5000 shares of PPL on the open this Monday. PPL is not an exciting stock just one that is positioned well to recover decently when the fear dissipates.  To be clear at our age the expectation for a gain that would make a difference just isn't there.  With 8 income sources most of what we have will make great non taxed inheritance for our sons. One of the reasons our planning included no state taxes on inheritance.
> 
> Everything is on paper so there is no gain or loss until the paper is turned into cash.


there is no such thing as it is only a paper loss ....all you do is hope it goes back but at any point in time  that is your value ...

you may choose not to care at the moment but that value counts and represents your net worth and the money you have for the taking .

in fact as a retiree my draw each year is based on that value ... so selling or not that value is very important to me .

your total return tells the whole story .... and the story is  dividends or not all stocks are in the same boat and you have companies with histories of rising dividends doing worse then some non div payers ....

each stock is on its own merit .

including all dividends ppl is now down a whopping 44% ytd ..... on the other hand the s&p 500 is only down 28% and fidelity contra one of my favorite growth funds for decades  is down just 22% .........

if we go as far back as 15 years , ppl has returned an average of 3.39% with all dividends included . contra has returned almost 9% .

going back the last 3 and 5 years , including all dividends ppl lost money for anyone still  holding it , 10 years it averaged 2.86% with dividends .

a simple s&p 500 fund made money the last 3 , 5 and 10 years with the 10 years still up 9.22% .....

ppl has been insanely risky for what investors got in return and dividends and now they got to be down a whopping 44% that takes almost 2x the gains of a growth fund just to get back .

to be honest , i fail to see the reason for owning it , one gets  2x the volatility of a simple index  fund  and 2x the loss of the s&p 500 , so there  certainly is no safety in it . the returns stink even when you include the dividends  and the  risk certainly  stinks as investors lost almost half their investment in it this year . .


----------



## oldman

When the Dow dropped to 26,500, I exited the market. I had to leave some money on the table in some of the funds, only because they are closed to new investors. My money is with Fidelity, so for example, I left $3000 in the Fidelity Growth Fund (FDGRX). There were three other funds that I left a small amount in so I could get back in after the recovery.

Going forward, I will not be buying anything until after the first quarter earnings come in next month. That will (as they say) tell the tale of the tape. I have, in the meantime, made up a wish list that I will be buying after they announce their earnings. With earnings expected to take a hit, it is likely that prices will drop and I will buy on the drop. The old saying, “Never buy a stick on the way down,” probably doesn’t apply to the present situation.

I went to an investment seminar years back and the lead speaker was Peter Lynch who was the head of the very successful Magellan Fund. During his presentation, he made the comment that when the market goes haywire, meaning in times like these, that it would be wise to look to hedge funds, commodities and/or contrarian funds, but only in the short term. And, if you like individual stocks, look for stocks with lower p/e’s. 

That has always confused me. Anyone understand that strategy?


----------



## mathjak107

oldman said:


> When the Dow dropped to 26,500, I exited the market. I had to leave some money on the table in some of the funds, only because they are closed to new investors. My money is with Fidelity, so for example, I left $3000 in the Fidelity Growth Fund (FDGRX). There were three other funds that I left a small amount in so I could get back in after the recovery.
> 
> Going forward, I will not be buying anything until after the first quarter earnings come in next month. That will (as they say) tell the tale of the tape. I have, in the meantime, made up a wish list that I will be buying after they announce their earnings. With earnings expected to take a hit, it is likely that prices will drop and I will buy on the drop. The old saying, “Never buy a stick on the way down,” probably doesn’t apply to the present situation.
> 
> I went to an investment seminar years back and the lead speaker was Peter Lynch who was the head of the very successful Magellan Fund. During his presentation, he made the comment that when the market goes haywire, meaning in times like these, that it would be wise to look to hedge funds, commodities and/or contrarian funds, but only in the short term. And, if you like individual stocks, look for stocks with lower p/e’s.
> 
> That has always confused me. Anyone understand that strategy?


FDGRX  is a fabulous fund ..... good idea staying put ,  it has been closed to new money for years .  i have that and contra decades ...  FDGRX , FCNTX AND FBGRX  are the trinity from fidelity that have beat indexing for decades . all 3 are my core holdings .

perfect examples of how if you stick to the 20% largest  mega funds in investor dollars your odds of beating indexing jumps to 80%


----------



## oldman

I own FBGRX. I also own FTBFX, which I use to hedge losses. It was giving back a nice return.


----------



## Catlady

What's so great about FBGRX?  It has imploded just like everything else and has a hefty .83% expense ratio

https://www.google.com/search?clien...=1092&bih=909#scso=_EYN3XrbkKoaU-gS5q57YBg1:0


----------



## mathjak107

Catlady said:


> What's so great about FBGRX?  It has imploded just like everything else and has a hefty .83% expense ratio
> 
> https://www.google.com/search?clien...=1092&bih=909#scso=_EYN3XrbkKoaU-gS5q57YBg1:0


it isnt just about a down turn ...stocks are stocks regardless ...they go down in down turns 

but take a look at this fund compared to indexing in vti vanguards  LOW COST  total market fund ,,, here is a lesson about going by fund expenses ....as well as believing indexing always beats managed funds

which fund would you rather own fgbrx or a low cost VANGUARD  total market fund

ytd  fbgrx down 23.97   vanuard low cost vti down 29.60, 

1 yr fbgrx down 12.52     vti down 18.98

3 yr fbgrx  up 7.90      vti down .10

5 yr fbgrx 6.85     vti up 2.94

10yr fbgrx  up 12,85    vti 8.97

15 yr fbgrx up 9.22 vti 6.73


----------



## Catlady

mathjak107 said:


> it isnt just about a down turn ...stocks are stocks regardless ...they go down in down turns
> 
> but take a look at this fund compared to indexing in vti vanguards  LOW COST  total market fund ,,, here is a lesson about going by fund expenses ....as well as believing indexing always beats managed funds
> 
> which fund would you rather own fgbrx or a low cost VANGUARD  total market fund
> 
> ytd  fbgrx down 23.97   vanuard low cost vti down 29.60,
> 
> 1 yr fbgrx down 12.52     vti down 18.98
> 
> 3 yr fbgrx  up 7.90      vti down .10
> 
> 5 yr fbgrx 6.85     vti up 2.94
> 
> 10yr fbgrx  up 12,85    vti 8.97
> 
> 15 yr fbgrx up 9.22 vti 6.73



I guess I just don't like mutual funds of any kind.

In my IRA I started out with four mutuals, that is all my compnay offered when I inititially opened the IRA.  After I was forced to take out RMD, I started depleting them and bought stocks and ETFs.  I only have one fund left, Wellesley, and now the RMD is coming out of that until it has been depleted.  I won't be buying any more mutuals, just sector ETFs.


----------



## mathjak107

if you diversify with a few sector funds you can do very well ..... the fidelity insight sector portfolio has an amazing record. they typically run 4-5 sector funds at a time ....

100k back in 1988 was 4.9 million as of  12/31 .

the same 100k in an s&p index fund  or total market fund is 2.25 million .... that is millions in difference compared to LOW COST INDEXING.

vanguard marketing did a great job getting everyone to focus so much on fees .... it helps all these  top great funds  with active mgmt  do so much better


----------



## Knight

mathjak107 said:


> you may choose not to care at the moment but that value counts and represents your net worth and the money you have for the taking .
> 
> in fact as a retiree my draw each year is based on that value ... so selling or not that value is very important to me .



I cut this down to what I care to respond to. All the research you did probably gives you something to do but matters not to me. We don't look at PPL stock as part of our net worth since PPL is not a source of income for us, it's an inheritence for our sons. Long term dividend reinvestment is building what is there for them. How it performs makes no difference in our lives. 

I'm guessing you need the income from your draw, that is where we differ. PPL is a an electric utility company so unless people, manufacturing & businesses decide to stop using electricity PPL will continue to serve the needs of those used to that convenience.  


Your input may help others in deciding what direction to go for that they should be thankful.


----------



## mathjak107

Knight said:


> I cut this down to what I care to respond to. All the research you did probably gives you something to do but matters not to me. We don't look at PPL stock as part of our net worth since PPL is not a source of income for us, it's an inheritence for our sons. Long term dividend reinvestment is building what is there for them. How it performs makes no difference in our lives.
> 
> I'm guessing you need the income from your draw, that is where we differ. PPL is a an electric utility company so unless people, manufacturing & businesses decide to stop using electricity PPL will continue to serve the needs of those used to that convenience.
> 
> 
> Your input may help others in deciding what direction to go for that they should be thankful.


so total return doesnt matter to investors ?   tell you what , i will pay anyone here more than the income from their dividend  and since they don't care what the total return is i keep the principal ...after all only the income is a concern it seems here..

personally i fail to see the point of owning a stock like ppl vs just an s&p 500 fund ... the s&p fund has better total returns , less risk , less volatility and can provide higher income because of the greater total returns .


----------



## Catlady

mathjak107 said:


> if you diversify with a few sector funds you can do very well ..... the fidelity insight sector portfolio has an amazing record. they typically run 4-5 sector funds at a time ....
> 
> 100k back in 1988 was 4.9 million as of  12/31 .
> 
> the same 100k in an s&p index fund  or total market fund is 2.25 million .... that is millions in difference compared to LOW COST INDEXING



I already have sector ETFs in all the industries I care to invest in, I don't need mutuals for that.  I may buy another ETF for utilities, that's about it, I prefer individual stocks for the rest of my portfolio.


----------



## mathjak107

Catlady said:


> I already have sector ETFs in all the industries I care to invest in, I don't need mutuals for that.  I may buy another ETF for utilities, that's about it, I prefer individual stocks for the rest of my portfolio.


with fidelity you have a choice , you can buy their sectors as etf's  or as funds . they have sector funds that don't even exist as etf's .... so i prefer the sector funds when i do use them since you have a much wider choice than etf's .


----------



## Catlady

LOL @mathjak107 - I'm beginning to wonder if you work for Fidelity, you sure promote ONLY Fidelity.

I just looked and when I'm ready and have the money, I will buy XLU if/when it implodes to $35 (50% off their 52week high of $71).  End of this discussion for me, need to get off my ass and do a few things around here.


----------



## mathjak107

here is an example of AN OLD  insight newsletter ....do not use it . it is outdated .

the select model is the sector funds . so back at that time those are the sectors in play .








Catlady said:


> LOL @mathjak107 - I'm beginning to wonder if you work for Fidelity, you sure promote ONLY Fidelity.
> 
> I just looked and when I'm ready and have the money, I will buy XLU if/when it implodes to $35 (50% off their 52week high of $71).  End of this discussion for me, need to get off my ass and do a few things around here.





nope never worked  a day of my life in the financial industry . but i have been with fidelity over 30 years ... tried vanguard and dumped them for a few reasons


----------



## Knight

mathjak107 said:


> so total return doesnt matter to investors ?   tell you what , i will pay anyone here more than the income from their dividend  and since they don't care what the total return is i keep the principal ...after all only the income is a concern it seems here..
> 
> personally i fail to see the point of owning a stock like ppl vs just an s&p 500 fund ... the s&p fund has better total returns , less risk , less volatility and can provide higher income because of the greater total returns .



You need to take another look at my post. I reflected on what matters to me & my wife. No where at any time did I post that total return doesn't matter to investors.  All I've done is present another view for those that have a long time ahead & maybe a desire to leave their heirs something. It's not advice it's only what I've done that works for me.  

Money pays the bills it doesn't assure good health or happiness. Thankfully we enjoy good health & are happy because we have been together for 57 years with 25 of those together 24/7 for the last 25 in retirement.  I wish you the same in your retirement years.


----------



## mathjak107

investing is only about risk vs return ...that is true no matter what the goal
no one wants or should take on more risk than is required for a desired return ...yet people do it all the time ...then they get burned eventually ..i am not picking on ppl in particular ... i am pointing out that for most small investors  they do not understand the risks involved in what they buy 

i mean in this case ppl has lost more than a 100% equity portfolio yet lagged in return for 15 years in comparison ..

most would be far better served in an index fund rather than trying to pick individual stocks blindly based on who knows what .


----------



## mathjak107

utilities have given back 5 years of gains in 4 weeks  looking at the utility index xlu  ...

Utility stocks dropped nearly 20% between last Tuesday and last Friday with many now down more than the s&p 500 or total market funds .

This has to be concerning to investors that bought these stocks as strong defensive plays or so they thought 

there was an interesting article  as to why .

"
*Potential Issues: Declining Demand, Declining Returns On Equity*
Interestingly, there's been (at least that I've seen) little discussion of the economic impact of the current situation on utility companies. Sure, some folks are considering the possibility of the government stopping utilities from collecting on past due clients for the duration of the crisis. That could hurt a bit on a marginal basis.

But zoom out. If the economy grinds to a halt for a few months, what happens to electricity usage? Over in the oil market, traders have quickly reacted to the slowdown by absolutely slamming the price of crude, and its refined products such as gasoline. Oil is more sensitive to the economy than electricity, as oil is the dominate transportation fuel. Most electricity uses, by contrast, aren't greatly impacted by a near-term economic slowdown.

Still, it probably isn't reasonable to think that electricity demand will remain steady. What do we have for data? I haven't seen much yet, but I did run across this interesting data point on New York City electricity usage.  NYC  is down to a  fraction of it's daily usage .

There's a ton of caveats here, as it's just one city, the weather could be a factor, and so on. But there appears to be a sharp rollover that started in the week of March 16th:


----------



## oldmontana

mathjak107 said:


> utilities have given back 5 years of gains in 4 weeks  looking at the utility index xlu  ...
> 
> Utility stocks dropped nearly 20% between last Tuesday and last Friday.
> 
> This has to be concerning to investors that bought these stocks as strong defensive plays.
> 
> there was an interesting article  as to why .
> 
> "
> *Potential Issues: Declining Demand, Declining Returns On Equity*
> Interestingly, there's been (at least that I've seen) little discussion of the economic impact of the current situation on utility companies. Sure, some folks are considering the possibility of the government stopping utilities from collecting on past due clients for the duration of the crisis. That could hurt a bit on a marginal basis.
> 
> But zoom out. If the economy grinds to a halt for a few months, what happens to electricity usage? Over in the oil market, traders have quickly reacted to the slowdown by absolutely slamming the price of crude, and its refined products such as gasoline. Oil is more sensitive to the economy than electricity, as oil is the dominate transportation fuel. Most electricity uses, by contrast, aren't greatly impacted by a near-term economic slowdown.
> 
> Still, it probably isn't reasonable to think that electricity demand will remain steady. What do we have for data? I haven't seen much yet, but I did run across this interesting data point on New York City electricity usage.  NYC  is down to a  fraction of it's daily usage .
> 
> There's a ton of caveats here, as it's just one city, the weather could be a factor, and so on. But there appears to be a sharp rollover that started in the week of March 16th:


----------



## oldmontana

[/QUOTE]
utilities have given back 5 years of gains in 4 weeks looking at the utility index xlu ...

Utility stocks dropped nearly 20% between last Tuesday and last Friday.

This has to be concerning to investors that bought these stocks as strong defensive plays.

there was an interesting article as to why . 
==================================================================

The utilities we own will keep paying a nice dividend while we wait for the prices to come back.


----------



## mathjak107

..enjoy the drop with each payout..

it is only about total return -period    .....


----------



## oldmontana

mathjak107 said:


> ..enjoy the drop with each payout..
> 
> it is only about total return -period    .....


I love the total return on ALL the utilities we own.

You post "enjoy the drop with each payout.."  You just do not get it after I tried to explain it...slow learner?  Or a blind spot about dividends? I say both.

Hope for the best plan for the worst.


----------



## mathjak107

oldmontana said:


> I love the total return on ALL the utilities we own.


Ha ha ha  yeah right ...... tell us what you own   I want to see what there is to love


----------



## oldmontana

mathjak107 said:


> Ha ha ha  yeah right ...... tell us what you own   I want to see what there is to love


Thanks for asking .  Three that I have owed over the years ...this increase does not include dividends..number from my brokerage firm .. they give the increases as there were many trades...

NEE up 273.62 %

AEP up 53.71 %

AWK up 148.07 %

----------

XEL up 16.98%...over less than 2 years

I love their total return.  

Carry on.


----------



## mathjak107

total return wise they did fine if you were a longer term holder... in fact they were far better than  the stock i was discussing  which was  PPL , as failing to see why one would want to own it   .. but anyone who bought them recently  as a place to hide got clobbered worse than the s&p 500 or total market , dividends included.

like all stocks in the market you need to look at each one individually ... you can't just say " utilities " like the subject because there are some real dogs in there .  i can see zero reason for buying a PPL  over an index fund ... i can see your picks  though as they are fine .


----------



## oldmontana

mathjak107 said:


> total return wise they did fine if you were a longer term holder... in fact they were far better than  the stock i was discussing  which was  PPL , as failing to see why one would want to own it   .. but anyone who bought them recently  as a place to hide got clobbered worse than the s&p 500 or total market , dividends included.
> 
> like all stocks in the market you need to look at each one individually ... you can't just say " utilities " like the subject because there are some real dogs in there .  i can see zero reason for buying a PPL  over an index fund ... i can see your picks  though as they are fine .


". but anyone who bought them recently  as a place to hide got clobbered worse than the s&p 500 or total market , dividends included."

Anyone that bought these stocks recently got good dividend paying stocks on sale.  Not a bad thing to do. 

The return was after the resent fell off, it was this morning.  

What you keep posting..... I believe more than never, less than always.


----------



## mathjak107

i t is only about total return not dividends  or not .there are poor dividend stocks and good dividend stocks the same as there are good and bad stocks that pay no dividends ...the return tells all  as well as the risk vs reward for that return .. ...

a lower total return  than an index fund that gets beat up more as soon as markets are in a down cycle is a poor stock choice -period .
again.   your choices are  fine but not all dividend payers are worth owning because they pay a dividend  out . ..


----------



## fmdog44

Con Ed would be my choice


----------



## mathjak107

based on the volatility in it i would take an s&p fund over it any day. it has been less volatile than other utilities but under performed many of them too . i much prefer oldmontana's choices as well


----------



## OneEyedDiva

oldmontana said:


> Thanks for asking .  Three that I have owed over the years ...this increase does not include dividends..number from my brokerage firm .. they give the increases as there were many trades...
> 
> NEE up 273.62 %
> 
> AEP up 53.71 %
> 
> AWK up 148.07 %
> 
> ----------
> 
> XEL up 16.98%...over less than 2 years
> 
> I love their total return.
> 
> Carry on.


Just curious Oldmontana.  What do the dividend per share prices look like for these stocks?  Are they about in the same price range? And do the stocks pay capital gains?  My utility funds dividends have ranged from about .09 - 16 cents a share and the cap gains from .39 - 1.29 per share.


----------



## oldmontana

OneEyedDiva said:


> Just curious Oldmontana.  What do the dividend per share prices look like for these stocks?  Are they about in the same price range? And do the stocks pay capital gains?  My utility funds dividends have ranged from about .09 - 16 cents a share and the cap gains from .39 - 1.29 per share.


NEE 2.57%

AEP 3.75%

AWK 1.77%

They do not pay capital gains.


----------



## fmdog44

I used ML years ago but I did not like their lengthy, convoluted statements-way too full of numbers that don't reflect what I need to know. Add to the fact their "advisors" are not required to possess financial training/education priory to hiring in.


----------



## OneEyedDiva

fmdog44 said:


> I used ML years ago but I did not like their lengthy, convoluted statements-way too full of numbers that don't reflect what I need to know. Add to the fact their "advisors" are not required to possess financial training/education priory to hiring in.


ML ??


----------

