I've been adding to my ARCC the past 2 weeks as it's been heading towards $16 a share . Today it closed a tad over $16 at $16.03. Could continue up some more as it prepares to go X Div next week on March 14b&w
Is there particular motivation for adding ARCC?What's the thinking of the dividend?
Is there particular motivation for adding ARCC?What's the thinking of the dividend?----------------------I am adding to ARCC because I believe the company is growing and I think the dividend will be continue to be paid at this level and maybe a bit higher in the future. Meanwhile at the current share price it is yielding 9.915%. The entire ARCC positions I hold are in my IRA and ROTH accounts. The dividends get reinvested in additional shares or other income securities based on their current return------------------------My portfolios are geared towards income. I am retired almost 15 years and live entirely off the income derived from my portfolio. No pension , No annuities, Minimal SS---just portfolio income and the reinvesting of the excess income to cover all living expenses and FED and STATE taxes and any discretionary expenses such as Gifts and Contributions I choose to spend. Over the years I have built up the income received to where I currently spend about 30% to 40% for everything and the excess is reinvested for additional income to cover inflation, higher taxes and whatever comes down the road. In an attempt to control taxes, I seek, wherever possible, tax deferred investments. My largest taxable event each year usually is RMD's I'm required to take out of my IRA. I avoid selling securities for capital gains, so I just keep accumulating additional cash distributions that get redeployed for additional income. My entire portfolio currently yields 8.387% annually Good luckb&w
Thanks for perspective. My main concern is safety of dividend. I came over from the ACAS, where I got burned chasing yield a bit. Just thinking back, where I thought the dividend was safe ... until it wasn't.
I came over from the ACAS, where I got burned chasing yield a bit. Just thinking back, where I thought the dividend was safe ... until it wasn't.I was involved with ACAS since 2004. It was a good income provider for me until the world was disrupted in 2007-8-9. The world was supposed to end and they cancelled the declared $1.07 dividend when financing closed. The stock pummeled to SUB ONE DOLLAR TERRITORY in a short time frame. Most people were petrified because the "world was definitely ending" While most people weren't paying attention to was----that during all the meltdown ACAS PAID EVERY DEBT OBLIGATION THEY HAD ON TIME AND WITH PENALTY INTEREST OF 2% to 3% extra. The banks were screaming for even more money. Finally Malon Wilkus told the banks to shut up-take the money with the penalty interest they had been paying OR---ACAS WOULD DECLARE VOLUNTARY BANKRUPTCY AND ALLOW THE JUDGE TO HOLD THE MONEY IN COURT and DECIDE ON HOW MUCH ACAS SHOULD PAY.The banks shut up and took the money and never made another peep. Needless to say that's when ACAS dropped to $0.59 per share and management declared options to management based on that $0.59 price. It was a signal to buy and millions and millions of ACAS shares were traded in the $0.60 to $0.75 area. We were buying numerous 5000 share blocks after the announcement of the options given to management. A few months later ACAS had recovered to about $3.20 a share when the re-declared the $1.07 dividend after they had received permission to pay the $1.07 IN CASH** OR** STOCK. I and many others chose ALL STOCK. It went X-Dividend about a week later. Here's where the money was made. The stock dividend was about 33.3% of share price on declaration day. On x-Div day the stock never dropped more that about 10% to $2.90 and there was a long timeframe to dividend payday (Somewhere about 3 or 4 months later). And by stock dividend pay day the old and newly received stock dividend shares were trading around $6 or $7 and moving higher.For those paying attention there were a LOT OF POSITIVE SIGNALSIn the worst days when ACAS was trading SUB $1.00 the NAV was never below about $7.50 per share and they were never in monetary default-Never Not $0.01 worth. They were in default of bank covenants on their debt- But never monetary default good luckb&w
I'm with you. I meant I was burned with ACAS because I thought the dividend was safe/sustainable, and it wasn't.Not to your extend, but when it cratered, I trusted the signals coming out of management (and a little hoping) that things would be turned around, and added. Heck, the 1.07 dividend reinvested was a boon, by itself.Not sure if I can wait out the rollercoaster if ARCC runs into trouble. Just wonder what you think of ARCC going forward.
I meant I was burned with ACAS because I thought the dividend was safe/sustainable, and it wasn't.Nothing in this world is sustainable all the time, forever and ever. Nothing We aren't sustainable-Stocks are n't sustainable -- dividends aren't sustainable. Nothing is forever. Except in the children's story books. "And they lived happily ever after"If you don't feel you can deal with a roller coaster, it might make sense for you not to be in the market at all, because the market is getting more and more volatile as we go along. The DOW is running up and/or down 200-300-400 points or more everyday and some days there have been moves over 1000 points. You picked the right word "ROLLERCOASTER". I'm not saying what you should or should not be doing. That's completely up to do. Just wonder what you think of ARCC going forward.I already answered that question. I previously said I am adding to my position. That doesn't mean I might-could-would or will not change my mind tonight-tomorrow-next week or neverEven more important, what I do, or will do, should really have no basis for any action you might --would--or should do for yourself. Your situation and mine are completely different and therefor require different actions.I wish I could be more help, but I don't know what else to tell youYou must evaluate every security you hold and make the right decisions for your situationgood luckb&w
I totally forgot that back in the Yahoo board day I was a lurker and not an active participant. When I see your username, I have this backlog of shared conversations.
I was involved with ACAS since 2004. It was a good income provider for me until the world was disrupted in 2007-8-9.I started investing in ACAS around 2007-2008, which would have been a few years after you, b&w. I accumulated throughout the dark days until it became my largest position in my taxable and Roth accounts. I couldn't resist the heavy discount to NAV, which was marked-to-depressed-market as required by GAAP. The double-discount and the fact that they were in technical default because the market value of their assets had dropped and NOT because they weren't paying their creditors in full and on time.I didn't mind getting my gains in capital appreciation instead of dividends from 2008 onward. ACAS was the oddball in the BDC world because it stopped paying a dividend when it stopped being a RIC to make use of a massive tax asset, but it was my oddball! <g>With ARCC gobbling up ACAS, I realized my long-term capital gains in ACAS and parked more and more of proceeds into deeper and deeper discounted ACSF.Now with ACSF liquidating its assets to unlock shareholder value, I'm looking at ARCC again.With the potential increase in leverage from 1:1 to 2:1, a proven BDC like ARCC would be a good buy. It would be a great buy if the price were to drop meaningfully below book. <g> Being a former ACAS shareholder and a current ACSF shareholder, it no longer feels right unless I buy at a discount!Dwnwthvwls
Hi Dwn:Welcome to the board. Welcome home.With the potential increase in leverage from 1:1 to 2:1, a proven BDC like ARCC would be a good buy. It would be a great buy if the price were to drop meaningfully below book. <g> Being a former ACAS shareholder and a current ACSF shareholder, it no longer feels right unless I buy at a discount!In June of 2016 ACAS announced they were merging with ARCC which was paying a 9+% dividend I decided to go for the dividend and sold my entire "bloated" ACAS position. (It was sitting in IRA's, so no tax problem from the sale) and bought ARCC and started collecting a divvy again on the ACAS position. Once again welcome and good luckb&w
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