Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 14
Hey studmangeezer !

These are troubled times, but not terrible times. And BAC could go back down to $18 as you suggest. And you lived through that earlier $18 level and didn't sell. That's OK. Lets look at what might be happening. Please use your own actual numbers, but this is what I can put together using the information you supplied.

I bought into BAC because of the dividend yield, and have held on until now for the same reason. OK ... you want the dividend ... that's good.

If I sell now I will realize about a 25% loss If today's share price is $31 and you stand at a 25%loss, that means that you must have purchased BAC around the $40 area.

Today's dividend of $2.56 is paying YOU a yield of aprox. 6.5% on YOUR $40 investment.

Should the share price return to $18, and they don't cut the dividend, you will still be receiving 6.5% on your $40 investment. Should they actually cut the dividend to $2.00, you will still be receiving 5% on your $40 investment. That ain't bad.

However, if you sell now, you will lock in a 25% loss and have no dividend coming.

If the share price goes down to test that $18 low, you could buy some more which would lower your per share cost average and increase your dividend yield. And when the price goes up several year from now (your words) you would be doing real well.

That's just my personal perspective which could be all full of holes.

Rich (haywool)
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.