Managing your portfolios

IMPORTANT TIP #1: Be sure to find out if your broker has a method (usually at no extra cost) for you to designate that your dividends be automatically re-invested in fractional shares of any stock paying a dividend, if so make that designation.  Often such a program is referred to as a "DRIP" (Dividend Re-Investment Program).

M-1) Finally, we provide recommendations and tips for how to best structure and manage a portfolio created from the stocks in our screens, or a portfolio created with stocks that you identify with the manual criteria/approach we recommend

a) MOST IMPORTANTLY you should ONLY NO LONGER BUY (or continue to accumulate) A STOCK WHEN you’ve purchased our current HOLD (don't sell) List (Primary Screen) and you find that a Dividend Growth stock you own isn’t still on our current HOLD List (Primary Screen).  Not being on our HOLD List (Primary Screen) means a stock may have met at least one, or more, of the following first 5 criteria for when to consider no longer accumulating a Dividend Growth stock:

  (Also, using you can manually obtain the data to apply the following criteria for deciding when to consider no longer accumulating a Dividend Growth stock [for detailed instructions of how to manually obtain the data and make the calculations for i. through v. that follow click this link How_to_ID_what_to_invest_in:]


 ii. or the % dividend payout exceeds 95% of EPS (Earning Per Share);

iii. or the % dividend payout is between 75% - 95% of EPS for two consecutive years;

 iv. or there has been no dividend increase for 3 years (EXCEPT A STOCK SPLIT CAN BE COUNTED AS EQUIVALENT TO A DIVIDEND INCREASE);

  v. or consider no longer accumulating a Dividend Growth stock as long as this condition persists: if, assuming dividends have been paid for the last 6 years, the annual per share DIVIDEND PAID FOR the most recent FULL- year isn't at least 1.4 times the annual per share DIVIDEND PAID FOR the FULL-sixth year back (in making this calculation be careful to properly adjust the divisor, "annual per share DIVIDEND PAID FOR the FULL-sixth year back", for any stock splits during the five+ year time frame).

 vi. or consider no longer accumulating a Dividend Growth stock, if a "STOCK BUY-BACK" is announced AND THERE IS NO DIVIDEND INCREASE ANNOUNCED;

vii. and consider no longer accumulating a Dividend Growth stock, if there is an unexpected departure of the company's CFO (Chief Financial Officer).

[Please note: The above criteria for no longer accumulating a Dividend Growth stock have no relationship to the current price of a stock, and no relationship to the purchase price of a stock, because what we are recommending is a buy-and-hold strategy for dividend-growth stocks!! ALSO, THESE "no longer accumulate" RULES SHOULD BE SUSPENDED (for probably 12 to 18 months) WHEN ANY VERY UNUSUAL MARKET DROP OCCURS ("crashes" such as in 1987, or the "once in 100 years" events in 1929 or 2008, or the "flash-crash" of May 6, 2010), because after every such event in the history of the market new highs have eventually occurred.]

b) Because approximately one out of every twenty investable companies will "screw up" so badly that their common stockholders will lose everything, make certain you invest in a diversified portfolio of at least twenty companies so you only lose one-twentieth (5%) of your originally invested funds when that happens! Consider the following as a more detailed guide of how to accomplish this:

c) GIVEN THE FOLLOWING TEN "SECTORS" OF THE ECONOMY (each of which having multiple "Industry" sub-categories, which sub-categories should be ignored for simplicity) : Basic Materials; Consumer Cyclicals; Consumer Non-Cyclicals; Energy; Financials; Healthcare; Industrials; Technology; Telecommunications Services; Utilities. After first excluding Over-The-Counter Exchange companies and ADR/ADS companies, USE "EQUAL WEIGHT INVESTING" FOR EACH of these ten SECTORS, by identifying AN EQUAL NUMBER OF COMPANIES FOR EACH SECTOR (BUT AT LEAST TWO COMPANIES FOR EACH SECTOR) that meet our criteria/screen as "a company in which you can invest". THEN INVEST APPROXIMATELY EQUAL AMOUNTS IN EACH OF THE COMPANIES (i.e. if you have $10,000 to invest in 20 companies then that means you should invest $500 in each - therefore you will divide the equal amount you are going to invest in each company by the price per share of each company, and buy that many shares).

IMPORTANT TIP #2: Almost never, never, NEVER, "rebalance", without first carefully evaluating the "opportunity-lost-cost" related to SELLING a long-term-investment, which is revealed as "The UNEXPECTED INSIGHT" at the "About Us" link in our header, above  !

Only rebalance if the value of your holdings in a company exceeds 30% of the total value of your portfolio, THEN "REBALANCE" only ONCE EVERY 12 MONTHS BY  SELLING "one-fifth" OF THAT POSITION UNTIL IT IS LESS THAN 15% OF YOUR TOTAL PORTFOLIO.  THEN STOP ALL "REBALANCING" UNTIL A POSITION AGAIN EXCEEDS 30% OF THE TOTAL PORTFOLIO!!

M-2) If you would prefer to utilize a "managed" dividend growth investing system with a similar style of diversified composition to minimize risk, as well as utilizing equal-weight investing, and a buy-and-hold objective, where a portfolio of 24 specific stocks is recommended - as well as weekly updates of any additions and deletions that you should make to your portfolio - then you should consider a subscription (as of the date of this writing: $199 annually) to the AAII (American Association of Individual Investors) Dividend Investing advisory service at Please be advised that we have observed that the AAII Dividend Investing service's screening methodology is sufficiently different from our site, so that, at any given time, only approximately 55% (plus or minus 15%) of AAII's 24 stocks can be found in our HOLD List (Primary Screen), and only approximately 30% (plus or minus 15%) of AAII's 24 stocks can be found in our BUY List (Secondary Screen). Additionally, the AAII Dividend Investing service provides a large amount of very informative weekly comment to keep you fully informed from a "due diligence" perspective. Where, in contrast, all the rules you need to manage your do-it-yourself portfolio selections from our site are concisely presented at manage_your_do_it_yourself_portfolio.

As one example of the very informative comment provided by AAII we would like to share this excerpt of the concluding paragraph to the article "More Experience Won't Necessarily Improve Returns", published in the Thursday, July 17, 2014, issue of the AAII Journal by Charles Rotblut, CFA, Editor:

"Even if an investor has average levels of investing skill, there are steps he can take to improve his long-term returns. Implementing mechanisms to limit the impact of his emotions is a big one, whether that means using written buy and sell rules (this website's editor: what our website provides) or relying on the help of an advisor (this website's editor: what AAII Dividend Investing provides). Placing greater emphasis on factors historically linked to better returns, such as fundamental strength, attractive valuations, dividends, and even momentum, is also important. Staying diversified limits the blow of bear markets and prevents any one single investment from destroying a portfolio. Finally, it's critical to focus on the things you can control, constantly focus on the long term and accept the complete lack of control you have over both the direction of the markets and the economy."

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