No. of Recommendations: 19
- yes would be eating into capital.

Firstly, there is nothing wrong with “eating into capital.” It also depends how you define this. If stocks’ prices appreciate because of rising earnings and a rising market, making your own distribution is not that different from being handed a portion of a company’s earnings in the form of a dividend by a good and thriving company. Instead you are taking a portion of those earnings, already nominally yours, on your own schedule.

Provided a company prospers and grows its earnings over time its stock price is likely to rise, albeit in fits and starts, but taking profits beyond your cost basis is paying your own dividend and participating in capital appreciation too.

Even if you are selling stock below your cost basis, you can’t take it with you. Most people plan to, and expect to, spend down during their elder years.

If you are eating into capital--You might want to upgrade your current portfolio by selling a loser and adding to a winner.

The trouble with this suggestion is winners, at any point, can become losers. Doubling down on winners can lead to more pain later. Nobody is immune to this possibility however good a stock picker they believe themselves to be.

I look where nobody else looks---at the increasing dividends over time.

The focus of this board is to look at increasing dividends over time. Here, you’re one of the herd, not someone who looks “where nobody else looks.”

kelbon
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