Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Bruce, Russ, and all.

Forgive me for jumping in here, but I've been following this thread with interest. Thanks for all the insightful ideas.

I thought I would throw in my real-world problem, and maybe keep the discussion going.

Some background. I'm fairly new to income/dividend investing, but have followed the FF and BSP strategies for sometime. I don't need income from my investments as I won't be drawing for retirement for some time.

My IRA and 401K are both in mutual funds, but hold several stocks in a taxable brokerage accnt (E*Trade). I really enjoy managing my investments on my own in this accnt and have been very fortunate.

My 1st high dividend paying stock was PSD, my local utility, that pays a nice 4.6% dividend. It is the only stock I own that is set up for a drip.

My 2nd high dividend paying stock was GM, which I bought in May 2003 for 35.00 a share. When I bought it, everyone hated GM and F, and the news was universally bad. I thought it would be a good contrarian play, and it payed a hefty 5.7% dividend.

My 3rd high-dividend stock is BMY, which I just purchased last week.

Well, since then, GM is up 50% and I'm contemplating what to do.

Thought 1: Sell GM and lock in the profit, pay the Cap gains and re-invest in another high-yield stock. My gut was right and I should reap the reward of my good fortune.

Thought 2. My original investment is still paying a 5.7% dividend. AND, since it's appreciated so much, I have a nice cushion to sell should they cut the dividend or bad news befalls it.

My "gut" says to hang on to it at least until I've held it a year. I think it's got upside to 65, but put a threshold stop in to lock in profits should it drop precipitously. But I really haven't decided.

I would appreciate your insights very much on this and I hope I've added to the discussion a bit.

I'll be making two more buys on Friday. I've chosen VZ and WM. I would appreciate any thoughts on those two also.


Thanks again so much, and Merry Christmas!
Steve
Print the post  

Announcements

When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement