Many retirees subscribe to the 4% retirement rule. This is a framework for managing assets into retirement. The 4% rule calls for an investor keeping a balanced portfolio of stocks and bonds, withdrawing 4% of their retirement balance every year. Under most projections, the portfolio should last 30 years. While the 4% rule is commonly utilized, it also has a withdrawal component. I don't want my retirement portfolio to have an expiration date. I'd much rather set up a retirement plan that provides income into perpetuity, so that I don't have to worry about unexpectedly outliving my savings. That's why I think a better way to go would be to scrap the 4% rule completely, and instead buy dividend growth stocks that yield 4% or better

Thanks to the market's declines last year, many stocks have crossed that 4% threshold: Altria Group (NYSE:MO) is arguably the most famous dividend stock of all time. AT&T (NYSE:T) is a large telecommunications giant that offers phone, internet, and television service. Realty Income (NYSE:O) is a REIT; it owns and operates nearly 4,500 real estate properties under long-term leases. By buying equal allocations, these three sample stocks generate an average dividend yield of 4.7%. The takeaway is that while the 4% retirement rule may have once served a purpose, it needs to be updated to reflect longer life expectancies. I think a better way to go would be to scrap the 4% retirement rule altogether, and invest in dividend stocks like Altria, AT&T, and Realty Income to generate enough income to live on. That way, a retiree never has to make withdrawals, and their portfolio remains intact throughout retirement.

Source: Seeking Alpha

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12 Stocks Raising Dividends and Expectations

Posted by D4L | Sunday, February 07, 2016 | | 0 comments »

I am not a stock trader; I am a dividend and value based long-term buy-and-hold investor. When I add a stock to my dividend portfolio, it is my intention to hold the stock forever. I am not smart enough to time the daily gyrations of the stock market. When stock prices start dropping, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying. However, sometimes selling a stock is the right thing to do. In determining when to sell a dividend stock, I have one hard and fast rule: When an individual stock held as a dividend investment lowers its dividend, immediately sell it.

Below are several companies making the case not to be sold by raising their cash dividends:

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Not all income stocks live up to their full potential. Utilizing the payout ratio, or the percentage of profits a company returns in the form of a dividend to its shareholders, we can get a good bead on whether a company has room to increase its dividend. Ideally, we like to see healthy payout ratios between 50% and 75%. Here are three income stocks with payout ratios currently below 50% that could potentially double their dividends.

This week we'll start off with a company that's well-known in many American households: coffee giant Starbucks (NASDAQ:SBUX). Currently paying out $0.80 on an annualized basis, good enough for a 1.4% yield, it's my belief that Starbucks could jump its payout to $1.60 on an annualized basis sometime within the next decade. Income investors looking for an attractive stock that has the potential to double, or perhaps even triple, its dividend in the coming years would be wise to pay close attention to financial products firm Lincoln National Corporation (NYSE:LNC). Lastly, I'd turn your attention to B/E Aerospace (NASDAQ:BEAV), a manufacturer of cabin interior products for commercial and business planes.

Source: Motley Fool

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Looking for a safe place to hide from the market pullback and collect some dividends in the meantime? We went looking for Mr. Market's favorite dividend paying stocks over the past month and in 2016, and, no surprise, utilities have been getting more support than the lion's share of other dividend stocks.

NY area-based Consolidated Edison (NYSE:ED) is leading all electric utilities stocks year-to-date - it's up 3.75% vs. a -5.87% loss for the S&P, and is among the top five performing electric utilities over the past month. It also held its value better than the S&P over the past year and is up 8.62% over the past trading quarter. These figures don't even include ED's dividends. If you're looking for relative safety in volatile times, ED sports a very low beta of just .13.

Source: Seeking Alpha

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3 Double-Digit Dividend Stocks Set To Fall Hard

Posted by D4L | Saturday, February 06, 2016 | 0 comments »

Oil’s hitting 12-year lows as we speak – and that’s crushing a favorite vehicle of many income investors. If you’re not yet out, get out. Reason being, it could easily get even worse for the goo. In fact, it probably will. A surge in either the U.S. Dollar or a depreciation of the Chinese yuan of just 15% could send crude in the $20 range. So could a continued liquidation of massive hedge fund bullish bets – they’re still long nearly 50,000 futures contracts. Yikes.

In September, I initially recommended that investors dump the dividend trap of big oil and that the price of crude was about to drop. The recent cut by Kinder Morgan (KMI), arguably one of the largest and more stable MLP holders out there, shows that no yields are safe. Plains All American Pipeline LP (PAA) has fallen 63% off its high from the third quarter of 2014. Williams Partners LP (WPZ) has a yield of 15.8% from its $3.40 dividend. Energy Transfer Partners LP (ETP) is down 60% from last January.

Source: InvestorPlace

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