I’m Pat Rosenheim, a.k.a. the PandA Trader.
So, I decided I should probably post about my #PLAN for the foreseeable future. A lot of people ask about my investment theses, so that seems to justify this post. Let’s see if I can even begin to support that statement.
I only post for my holdings, but they’re as accurate as I can make them. The symbols are; ACSF, AGD, ARCC, ARR, AWP, BDCL, BDJ, BFK, BGH, BKN, BTA, BXMX, CEFL, CLM, CRF, CSQ, CXE, DFP, DHF, DHY, DIAX, DNP, EAD, ECC, EVN, FFC, FHY, FIF, FLC, FPF, GAIN, GLAD, GOF, GUT, HIX, HPF, HPI, HPS, HYB, IVH, JPC, JPI, JPS, KIO, LDP, LEO, MAIN, MAV, MFM, MHI, MITT, MMD, MORL, NAD, NEWT, NHF, NRO, NRZ, NVG, NYMTN, NZF, OAKS, OIA, ORC, OXLC, PDT, PFD, PFO, PHK, PHT, PMF, PML, PMM, PMX, PSEC, PSF, QQQX, RA, REML, RFI, RNP, RQI, SAR, SCM, SPXX, STK, TICC, TLI, TPZ, TWO, UTF, & VGR. Quite a list, eh? (92 total issues held; 17 common stocks, 4 ETNs, 1 preferred share, and 70 CEFs, of which 18 are tax-free muni CEFs.) Most pay monthly! Only ARCC, BDCL, BXMX, DIAX, MITT, NEWT, NRZ, NYMTN, QQQX, SAR, SPXX, STK, TICC, & TWO pay quarterly.
I will continue to screen using the method(s) outlined in my Watch List post.
I will continue to withdraw funds as needed to augment our income as outlined in my monthly income phase of The #Plan #UPDATE.
I will continue to “harvest” capital gains by selling holdings at new 52 week highs with “limit orders” in minimum 100 share lots so I can specify AON (All or None). I may also sell for other reasons (i.e.; because I can, I felt like it, I needed the money, etc.).
I’ll try to outline a bit of the rest of the #Plan each week with updates on my thinking, such as it is…
I like it. I don’t love it. Sometimes it is frustrating and/or confusing and/or obtuse.
Capital One Investing – I will be transferring our accounts to BAML Edge in March.
Now, a little about my investing philosophy; “If they don’t pay, I don’t play”. I LOVE dividends! So, if a stock pays dividends, I’m interested, and if they don’t I’m *generally* disinterested. Simple plan for a simple man.
Our #HYHRD (High Yield, High Return Dividend) portfolio is all about the income, so that’s what I look for in an investment; high yield while minimizing risk as best I can (dividend yields of ~5%+ & annual returns of ~10%+).
According to calculations done on my Google sheets, my current YOC (Yield on Cost) is not quite that good! I factor in the cash held in each account for the total portfolio value. The total value of the portfolio is now more correctly reflected on the spreadsheets because of this. The only thing missing (except on the monthly balance sheet) is my wife’s TSA. Not much to look at there, so I just report the balance at the end of each month. This year will be her first RMD (or MRD, whatever). This withdrawal will be automatic, every November 15th. The first withdrawal has already been deposited in our checking account, with 50% withheld for Federal Income Tax.
I am often asked what my “favorite” holding is, and I really can’t answer that. Here’s why; to have a favorite entails some sort of emotional attachment and I am not emotionally enamored with any of my holdings and would sell it all in a heartbeat if they fail to pay me. I’m tired of paying for things, and I want to be paid now. I just really feel like it’s “my turn”!
I don’t day trade, or swing trade, or play options (anymore).
If any questions are posted on my blog, I’ll answer them and include them here in future posts if I think of it when posting. 😉
I’ll also continue to try and be as helpful as I can on the StockTwits platform.
Here’s what someone said about me recently on Stocktwits;
@panda317 By far you are my favorite poster I’ve found on the Stocktwits message board.Carry on.
— James Wulgaert (@jwulgaert) May. 11 at 05:20 PM
I thought that was very nice…
We received a $200 bonus in each of our Capital One Roth IRAs for transferring from Fidelity. Yay.
And, I have to tell you, I am absolutely loving this TDM dividend tracking software! I’m glad I renewed my PRO subscription.
We surpassed $125,000.00 in dividends received since #HYHRD portfolio inception on 4/4/12 on the 1st of August!
Recently, I changed the ind-PandA and Roth-P & Roth-A investments, they are now calculated differently;
For the joint taxable account, the focus will be on those holdings paying the least and adding to them proportionately so that their monthly contribution to the account will increase. I look for Annual Dividend, and pick the bottom 6 for the twice monthly investments in this taxable account. Investment amounts are weighted, with the lowest ranked getting the largest investment, and shared proportionately among the remaining 5 investments. With this method, my aim will be to increase the amounts paid until all are paying fairly equal amounts each month. This will take a while, I imagine. I reached my first goal of $1/month or more from each holding. Each successive goal will be $0.25/month more, until all securities are paying at least $3.00 each per month…
For the Roth IRA accounts, the focus will be on those holdings with the highest YOC (Yield On Cost) and adding to them proportionately so that their monthly contribution to the account will increase. I look for YOC (Yield On Cost), and pick the top 6 for the twice monthly investments in this untaxed account. Investment amounts are weighted, with the highest ranked getting the largest investment, and shared proportionately among the remaining 5 investments. With this method, my aim is to increase the amounts paid each month. It’s like giving myself a little raise each month.
I changed it a little from that. Now one account looks for total return instead.
This won’t matter until after the accounts have been transferred to BAML Edge in March.
Somebody else recently blew me away on StockTwits with these comments;
@panda317 what is the best dividend paying stock for your buck. Mine is orc but I’m a newbie with minimal money.Your warren buffet to me
— Robert Estes (@BigRedBob) Jul. 24 at 11:17 PM
@panda317 I only do what I learn from you and read on the internet. To me your the Oracle in a sense
— Robert Estes (@BigRedBob) Jul. 24 at 11:20 PM
I change my mind often. Here’s proof;
Hey, guess what? The Roth investment thesis changed back from looking for highest Total Return (Annualized Return) to looking for highest Yield On Cost (YOC). Again. The reason? Well, highest Yield On Cost (YOC) while slightly (or even majorly) riskier pays more into the account(s). “It’s all about the Benjamins!”
This is the “old” thesis; The Roth investment thesis changed from looking for highest yield (YOC) to looking for highest Total Return (Annualized Return). The holdings with the highest total return are the holdings that are more likely to be sold at a profit, so it makes sense to accumulate enough that can be sold in 100 share lots. It’s not that looking for increased income (YOC) was a bad thesis, but Total Return might be a better thesis for the coming months. I do see some possibility of turmoil ahead. It usually begins with news items that start out with “Trump tweets…”, or something about the midget with the bad hair from North Korea, or something else equally sensational, so there’s that. Who will Trump fire next on this reality game show of his? OK, enough politics…
Let’s talk religion instead;
OK, so I mentioned some changes to the investment theses for the accounts.
The following is on hold until March;
Anyway, the joint taxable brokerage will continue investing in the lowest paying holdings until they’re all paying amounts greater than $3.00 per month. This account is great, because while being a taxable account it does contain some tax-free CEFs and some of those are also AMT-free. About half of the holdings are (federal) tax-free. So, getting them to the point where they all pay more is a great idea. Plus, this account is currently DRIPping all dividends, so it’s not like I’m planning to withdraw any more money from this account at this time.
Again, this just changed (for November!) The investment theses for both Roth IRA accounts changed from a methodology using Total Return to a purely yield-based method. It should boost our income a bit more than before, albeit with higher risk. But, then again, it is really all about the Benjamins when you come right down to it!
And, here’s the “old” method; The investment theses for both Roth IRA accounts changed from a purely yield-based method to a methodology using Total Return. It should still boost our income, but it should also boost our holdings that are likely to be sold. Recall that I like to sell in minimum 100 share lots using limit orders at or above the 52-week high. I also like to get a minimum of about $1,000.00 total proceeds for each sale. The reason for the minimum of 100 shares is so I can specify AON (All Or None) and guarantee a minimum price instead of having the order trigger when a new high is reached and then having the price retreat so that by the time the stock is sold it is no longer at or above the new 52-week high. The difference can be substantial when that happens. Given the recent turn of events, it seems the “Trump Trade” is quickly becoming the “Trump Fade” so I don’t know if this “Total Return” method will work very well. I’ll give it a while, and then I might go back to the highest yield (YOC) method. Time will tell…
I want to briefly mention our 4 accounts held @ Fidelity. These contain only DTC discount eligible holdings, and all DRIP. The only account getting new money deposited is the joint taxable account. We can’t put any more money into our Roth IRA accounts or my IRA account because we have no earned income. I do want to continue to make investments in the taxable account at Fidelity, and have targeted a random investment scheme.
MILESTONE!: We have collected over $125,000.00 in dividends since the inception of the #HYHRD portfolio. This milestone was reached on August 1st, 2017. Next milestone will be $150,000.00 in dividends received.
I will be converting 1/6th, then 1/5th, then 1/4th, then 1/3rd, then 1/2, and then the remainder of my IRA to my Roth IRA in January of each year.
So, some slight changes to investment methods and Robinhood will look across the entire portfolio and will also be the 1st place to add new holdings. I am beginning to think of Robinhood as my sandbox, or test case portfolio. Always trying to find the highest paying items without being overly risky (yeah, we’ll see how that goes) and no trade fees, except when I sell.
I’m also looking at moving our accounts away from Fidelity and Capital One Investing to a new broker, because Capital One Investing will not allow any investment or trades or purchases in my wife’s Roth IRA (this includes DRIP purchases!!!). This will be initiated by March 10th of next year, at the very latest.
On November 15th, Capital One Investing removed the restrictions placed WITHOUT WARNING on my wife’s Roth IRA that prohibited trading (buying and/or selling, and also dividend reinvestment). I immediately sold 300 shares of PHT and 1500 shares of PHK and bought 200 shares each of NYMTN & NYMTO.
Our joint brokerage can move at any time.
My Roth IRA move to a new broker will be initiated by March 9th of next year, at the very latest.
I am considering Bank of America Merrill Lynch, specifically Merrill Edge for our new broker. I also want to see what Wells Fargo comes up with, because they are looking to compete with BofAML by adding brokerage services. I must admit, I couldn’t even get the Wells Fargo website to work using Firefox or Chrome, and for investing their best rate(s) are about $3 per trade with a $30 annual fee. BAML Edge beats that by a mile with 30-100 limited free trades and no annual fee. So, it looks like Merril Edge is the clear winner and I will get at least 30 free trades each month with Merrill Edge, which is enough for my needs.
I had a meeting with a representative at a local BofA branch, and made an appointment for Dec. 4th to initiate the partial transfers, leaving only ACSF, BDCL, CEFL, MORL, & REML at Capital One Investing. Eventually, partial transfers of DTC eligible holdings will be initiated to move these issues from Merrill Edge to Fidelity.
That plan is now on hold for another 3 months, until March, 2018.
I will meet with the Merrill representative in March to effect the account openings/transfers, etc.
The portfolio is in a sort of “holding pattern” until I meet with the Merrill representative in March and/or until the income taxes are paid. I am DRIPping some holdings at Capital One Investing, but none at Fidelity are presently being DRIPped. Robinhood, of course, doesn’t offer DRIP of any sort.
I will leave you with a (rather large) screenshot from my Google sheets that shows all of our holdings, ranked by total return (there’s also position size ranking, %change since purchase rank, rank by yield, type of security, frequency of dividend payments, total return, total $ gain/loss (unrealized), rank by income, and rank by gain/loss);
PLEASE TAKE NOTE AND REMEMBER THIS!
I’m not telling anyone to buy anything or giving anyone any advice, because that’s illegal. You see, I have no letters after my name, like RIA, CFA, etc. I SIMPLY DO NOT GIVE ADVICE. I only tell (and show!) what I do. You, like me, are all alone in this.
And remember, always do your own due diligence!