Anyone Invested In Utilities?

[OneEyedDiva]

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]

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]

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]

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]

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]

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]

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]

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]

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]

"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]

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]

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]

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]

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]

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]

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]

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]

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.