Super Stock Blog

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The Allure of Dividend Stocks

When I first started investing, I was never really was interested in dividend stocks.  I wanted appreciation.  I wanted to find the next Google (GOOG), Apple (APPL), Microsoft (MSFT), that next stock that will leap 1000% in appreciation retuns.  The further I have gone into stock investing the more I understood that its rare to find these good stocks.  I also know for retirement accounts which do not get hit with capital gain taxes when you sell that they are perfect for dividend stocks.

If I have a choice to a brokerage account or retirement account, you always want to invest the dividend stocks into the retirement account.  You get the interest without any of the taxes involved.  If I had bought the dividend stock in my normal after-tax brokerage account, I would have to pay taxes on the interest.  Therefore, I rather load up my retirement accounts with dividend stocks that will pay for the long-term.  This means I am looking for dividend stocks that have continued to raise their dividend year-after-year and they have a long-term track record of stock rising.  It doesn’t matter that it appreciates only a little at a time because I am getting the nice dividends.

In the past year, I have advocated oil stocks like Chevron (CVX).  It pays a nice dividend but it also has appreciated rapidly since my recommendations.  The price makes it more tough to recommend such a stock since that means the dividend percentage is lower when you purchase at the price currently at $113 which gives it a 3.87% dividend.  This isn’t bad but I also think the price is a little high.

I rather look at stocks that are weak now and undervalued.  With the Fed planning to meet in the middle of December, there is a high chance that they will raise interest rates.  This means strong dividend stocks will most likely get sold off.  I am setting my radar on Omega Healthcare Investors (OHI) which pays over 8% dividend.  I am also looking at New Senior Investment Group (SNR) which pays over 10% dividend.  I have discussed them in the past article and I think they will be nice long-term holds that will continue to pay the dividend and hopefully raise it long term.

Apple Has Topped Out!

That’s right.  The apple chart shows an evening star doji.  I still expect this to be a great stock moving forward, but it has leaped 30 points in one month giving it almost a 40% gain.  It doesn’t help that Steve Jobs is not at work anymore.  We can only wish for more excellent keynotes from the great orator of Apple.  However, Apple is still pushing out great products.  They have the best mobile phone, and arguably, the best laptops.  They continue to carry the best line of music devices through the IPod.  Sheesh, they are just doing a great job.

If you like to gamble, throw some short sells into Apple.  However, I suggest not risking too much.  Don’t lose your house over this trade.  It might be in a bearish mode, but expect it to continue moving up.  As a safety net, I suggest short-selling this thing for at max 10 points to be conservative.  Also, remember to put in your stops.