Sunday, October 30, 2011

October Dividend Income

Well, another month has almost passed, making it time to take a look back and see how I did dividend-wise.  This was a great month for me; I'm almost debt free now (hope to be totally debt free by the end of the year) and I finally have my roth IRA in the brokerage house I want it in; I'm now just waiting on a market dip to purchase stocks for it.  I also made a 2500 dollar contribution to it, I hope to make the full 5k contribution in the next few months.  As far as dividends in taxable accounts, it was a great month:

ERH - 42.38
NM - 18.00
O - 10.16
GE - 15.00
CIM - 195.00
Bank Stock - 2954.00

TOTAL - $3,234.54

As far as what I did with the money, the bank stock money went towards the 2500 I recently put into the roth; the rest was put in a savings account.  The dividends from the other stocks are just sitting idle for the time being in my scottrade account; I'll collect some more dividends in the beginning of November, plus now that I don't have a car payment, I can throw some more money in there, and aim to make another purchase in my taxable account next month as well.

Saturday, October 29, 2011

Banking Hiccup

I keep savings accounts at 2 different banks.  No real good reason, I opened a second one a few years ago when they were giving away $150 dollars to open up an account.  For that second one, I rarely deposit/take out money from it, and for the most part, I don't pay attention to it.

Once a month I check on all of my accounts.  When I went to check on that particular account this month, I noticed that I was charges a 30 dollar maintenance fee.  I immediately called the bank, and I was told that I wasn't keeping enough money in the account for them to waive the fee.  Mind you, I only have $19,500 in that account, so I guess it's understandable on their end, right (what a joke)?  They wouldn't refund me over the phone, so I took a trip down to the local branch.

The woman at the bank was more than happy to refund the fee, and put me into the appropriate account.  You see, if she hadn't, I was fully prepared to close my account, TAKE CASH, and make her stand there and count every last dollar.  I guess the 30 dollar fee wasn't worth it to her.  Moral of the story - keep track of these banks; I had no idea they were going to start charging this fee.  Also, if something like this happens to you, STAND UP FOR YOURSELF.  This isn't their money, its yours!  They should be happy that I've given them access to almost 20 thousand dollars to loan out at a higher interest rate than what they are paying me at, they're not doing me a favor by keeping my money for me!

On a good note, all of the money in my roth ira has transferred over to the new account and I'm simply waiting on a market dip to make some new purchases.  Also, October was a great month for my dividend total; the update is coming out soon!

Saturday, October 22, 2011

Roth IRA almost rolled over, now what to buy?

I've filed the paperwork for the conversion for my roth from a mutual fund company over to a discount brokerage.  I'm looking at about another week to 10 days before the money transfers.  Until the transfer is complete, I'm trying to figure out how I want to invest the money.  We're not talking about a lot of money here; after combining both the transferred cash and the new contribution, somewhere around 7k, so my initial investment will probably only be in one thing; with future contributions being used to purchase other things.

My initial idea was to purchase shares of an mREIT.  These are companies that make money by financing real estate.  In essence, they are borrowing cash at short term (smaller) rates and then lend the cash for mortgages at long term (higher rates), but it is somewhat more complicated than this, as a lot of times they're just buying mortgages and re-securitizing them to sell to another mREIT or some other entity.  The other thing about mREITs that is appealing is that they must pay out 90% of their earnings to shareholders in the form of a dividend, so yields can be quite high.

I currently own one mREIT - Chimera (CIM) (which invests primarily in non-agency (non-governmnet) backed mortgages in my taxable account.  These are inherently riskier investments, as we're all aware with the risks of real estate investments these days, but it currently yields close to 18%.  I still think this a good buy right now, however I think I'm going to invest with another mREIT.  A roth IRA is a good place to invest in one of these, as the high yield is protected from taxation.  The two I'm currently considering are as follows:

Annaly Capital (NLY) is sort of the parent company of chimera, except that it invests in agency backed mortgages, making it a safer play.  Its currently trading around 16 dollars a share, with a dividend yield right at 15%.

Armour residential reit (ARR) also invests in agency backed mortgages, but it focuses on residential real estate.  Its currently trading at 6.78 per share, with a dividend yield at 19.4%.  I should mention that ARR is a fairly new company, probably riskier than NLY, and recently trimmed its hefty dividend by 8.5%.  I feel though at this price, its a great buy, as the book value is 7.11 per share.

The grand idea here with my roth is to initially invest it in high risk, high yielding stocks, then step down in both yield and risk with future purchases.

What do you think?

Saturday, October 15, 2011

A rule for 401k's

Well, after almost 6 months, my old 401k came out of the "blackout" period and was finally deposited into my new one.  I don't think the whole process is supposed to take 6 months, and probably it would still be going if enough people hadn't complained.  So this week, I logged on to see what funds I should move this money into, and I was surprised at what I found.

The first thing - we still don't have access to "thousands" of funds, just the same old, tired 20 dogs we had before.  Ok, well maybe there are SOME decent funds in here, so I go and take a look at the fund histories in an attempt to pick them out.  The first thing I notice is a fund called "cash reserves" which from what I understand, is nothing more than a money market fund.  Interestingly, the 10-year return on this fund is 2.04%.  Not bad, but certainly not great.  However, since its just money market investments, you can't really expect much.   What shocked me was the sheer number of funds that had a 10 year history, yet came in markedly worse than 2.04%, with several coming in negative.

Which leads me to a rule I'd like to propose - any fund that has a 10 year history and can't beat a cash reserve account has no business in a 401k plan, and should be removed.  In all honesty, the fund shouldn't even exist, but if people want to go out of their way to own these dogs, then that's their problem.  Remember, you're PAYING a fund manager who in the last 10 years, can't even beat a basket of money market accounts.  Why are these things in here?  Does anyone out there agree with me?

Wednesday, October 12, 2011

Calumet Announces Distribution Increase

One of my recent purchases, Calumet Specialty Products (CLMT) announced a distribution increase from 49.5 cents per share to 50 cents per share.  My expected distribution of $276.25 this quarter went up to $279.  Not much, but every bit helps!  Hopefully, more good news is on the way.

Saturday, October 8, 2011

Another reason to change my roth IRA

I've written before that I want to switch my roth IRA account from oppenhiemer to a discount brokerage, and I planned on doing it towards the end of this month.  I got a letter in the mail yesterday further reinforcing that decision. 
It was the oppenhiemer funds account statement.  Since my last statement, I have lost close to 15% of value in the fund.  This isn't to be unexpected, the markets have had a rough few months.  The kick in the teeth comes in the fees that I have been charged for the privilege of losing money.  At least with scottrade or something like that, I get charged once when I pruchase, and once a long way in the future when I sell.  Anyway, I hope to get the paperwork rolling on this after my big dividend check comes in on the 16th.

Saturday, October 1, 2011

September Dividend Income

Well, another month comes and goes as we approach winter (my least favorite season).  It was certainly and up and (mostly) down month for the markets.  My net worth took a hit, but this was still a good month for me, as I was able to pay off my car and put myself that much closer to being debt free.  As far as dividend income goes, September was a small month (as expected) as I don't own many stocks that pay out in september.  I'd like to change that, does anyone have any good suggestions of what to buy?

Dividends paid out:
ERH - $42.38
O - 10.14
DUK - 21.20

Total for the month:  $73.77

So overall, a quiet month for me on the investing front, but as I've posted before, next month should be interesting...