Thursday, June 21, 2012

Measuring 2012 Dividend Machine Performance

Measuring 2012 Dividend Machines

Purdue University taught me the problem solving approach and it has served me well.   One of the steps to successful problem solving is to measure your results; evaluate your progress; determine if you have failed or if your approach has merit.  With that in mind, I looked at the 2012 dividend machine effort that I write about every week.  In 2012, I committed to profiling one dividend machine per week throughout 2012 with 4 weeks dedicated to analysis.  So far, I have profiled twenty four dividend machines in 2012.  I will profile forty eight dividend machines before the end of the year.

  Since the problem we want to solve is to create income of at least 3 percent I used that measure to determine how well we have done.   Today, June 21, 2012 the twenty four 2012 dividend machines are yielding 3.94%.    I am very happy with that result.  I will not change my rules for selecting, profiling, and investing in dividend machines for the remainder of this year.

I also know that psychology plays a role in every investor’s actual trading.   For instance, many long term investors are worried about Proctor & Gambles (PG) troubles.  I profiled PG as dividend machine in both 2011 and 2012.  The stock price is down on news that P&G is not performing as well as its competitors.  Yet, it continues to grow and it continues to increase dividends.  As long as the dividend increases continue, I will not sell my PG.  I may reinvest the dividend so I buy new shares at a lower cost.   If managements continues to increase the dividend and the stock  price remains low, I may even buy more.   This all leads to looking at how our principal is doing.   We want ever increasing income but the psychology of losing our principal when stock prices are week is troubling. 

 Therefore, I measured how the $102,446 invested in 2012 dividend machines is doing this year.   The value of the twenty four 2012 dividend machines as of 11:15 am PT is $101,485.  We are down just over $1,000.  I can live with this.   Only you can determine if you can live with a mid year loss.

I will conduct more analysis throughout the year and next week I will profile the next 2012 dividend machine.

Very Truly Yours,


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