Should I add this new trading avenue to achieve my long term goals?

As a big supporter of DRIP investing because of limited capital to invest I am always looking for ways to accumulate more shares.  I like to acquire shares that are either undervalued or reasonably valued.  This in return provides me with a ever increasing amount of dividends and more shares in mostly well known companies that have proven to stand long periods of time and thrive in different economic times.  Last year I became interested when Scottrade came out with the FRIP plan.  Up until now I have not really been able to participate or open another account.  Recently I have been starting to get frustrated with E*Trade’s $9.99 commission because it is higher than just about every competitor.  I have been an E*Trade customer for a long time and am comfortable with the tools and platform though.  I have not had too many major problems with them when contacting customer service. 

I also am interested in all these newer brokerage firms and innovative ideas, but not sure if they are worth the risk.  The one I am leaning most towards is Scottrade with $2.99 less commission and the ability to FRIP the percentages I want towards any stock I want to without paying commissions and keep excess cash if I want to as well.  This would be a significant cost savings over time for someone who can only afford small purchases.  I would have to make 1500 at E*Trade trades a quarter just to get about that same rate that is already offered.  This is probably a lot easier to keep track of for records and tax treatment as well since you can only acquire full whole number amount of shares.  Once I clear out some of my current expenses I might look into opening a Scottrade account because have to start with $500 I believe.  I am a couple months away from finishing my car payments and owning it.  The unknown is how I am going to go about paying for school.  I am making the transfer to a higher cost school, but am 15 classes away from getting my Bachelor’s of Business Administration in Finance.

Anyone out there have any issues with Scottrade?  Do you participate and/or like or dislike the FRIP program?

A 3.7% Dividend Raise from this REIT

National Retail Properties today announced a 3.7% dividend raise.  This increase upped the dividend from $0.405 per share to $0.42.  This is another company I don’t track on my monthly dividend reports as I hold it in my Roth IRA.  This is another REIT that seems very committed to supporting shareholders with long term dividend growth.  The website features photos of checks in the mailbox to symbolize the importance of shareholders receiving the income they provide.  As stated on the press release earlier today: National Retail Properties (NNN) is one of only four publicly traded REITs and 102 publicly traded companies in America to have increased annual dividends for 24 or more consecutive years.

Photo Source: http://www.tkorlando.com/annual-report-nnn.html

A 10% dividend raise from this BDC

 

Checking my brokerage account after the market closes I noticed some news across the screen of a dividend increase of 10% on its way from Fifth Street Finance Corp.  10% is significant amount, but this is after a couple dividend cuts that were larger than that.  I prefer not to take a cut in dividend income at all, but the effects were minimal at my age and hopefully temporary as I have more shares and a slight increase snapback in the rate.  I will gladly take ~82 cents or so more a month anytime.  Apparently the dividend cut was necessary to bring their dividend rates more closely aligned with Net Investment Income (NII).  I am glad management has taken the steps necessary and are confident enough to raise it back up a little bit.  The company has been focusing on safer loans which as a whole usually yield less then more riskier ones.  BDC’s may not be for everyone, but a couple authors in Seeking Alpha are worth reading and learning about them from.  The problem is some are safer than others and yields vary sometimes.  I like to focus on stocks that regularly increase their dividends.  On the other hand, I like some high yield plays that have growth potential also.  That way even if the stock is sideways and the dividend is static to higher I will get more dividends each month as well as shares from the Dividend Reinvestment Plans (DRIP). 

 

I am aware BDC's and REIT's are taxed at ordinary rates and not favorable tax rates so that makes it less of a SWAN investment for higher earners in nonretirement accounts.  Along with flucutations and having to balance portfolio loans and defaults it is not worth the headache for other investors to read up on and I don't blame them. It is risky and noone wants to get burned if they could avoid it.  That said, its been a good ride so far for me and I would like it to continue.

I am tempted to start a position in FSIC as they are planning on paying 2 special dividends this year in addition to their regular monthly payments.  We will see what I end up deciding as I am looking at some other companies like PG, WHLR, GE, MSFT, and CSCO for further consideration.

What’s on your radar?  Are BDC’s worth the risks to you?

Photo Source:http://tickerreport.com/banking-finance/240037/fifth-street-finance-corp-coverage-initiated-by-analysts-at-jmp-securities-fsc/

June 2014 Dividend Update

As we start the month of July it is time to update the income received during the month of May.  I am happy with the progress I have made so far this year.  I am falling behind on my ambitious goal of $2700 in dividends this year halfway through the year.  I still feel like I am in a good place and have a chance at reaching for this goal.  Even if I fall short I will know I am heading in the right direction as I am on pace for about a 30-35% increase year over year in dividend income.  I am encouraged and inspired by all the bloggers out there who have documented their progress.  Whether you are new to it or I have been reading for a couple years I thank everyone for their support and insight.

 How was your June?  Are you on pace to hit your goals this year?

Why higher interest rates don't scare me away from these stocks

As many have realized I own a lot of securities in the REIT and BDC industries.  Many have expressed concerns about when interest rates rise these income investors will steadily decline.  While that may be the case I am not sure that it is a given.  There is a lot of time for companies to plan and structure accordingly to minimize the risks now.  Sometimes management can have the foresight to take a hit now for a more prosperous future.  Here are a few examples of why higher interest rates do not frighten me.  I will use a company from each sector and run through why I think they can continue to outperform the overall market.  These companies are showing that management has shareholders best interest in mind.

Recent Buy

I like to share what I am doing with my portfolio especially during this overheated market.  It is nice to see other investors and how they persevere through the different economic times and through trouble.  I made another recent purchase that involves more risks then I usually like, but has the potential to pay off long term especially if average down on it.  It is a long term turnaround story. 

Recent Buy

I have not been very good at updating my blog often when changes occur.  I understand a lot of people I read and follow along with are better than I have been at it.  I will attempt to be more transparent and shortly after buying something post an explanation.