Dear Reader,
I spend most of my days in front of the computer, researching dividend stocks, writing about dividend stocks, or communicating with you, my readers, about dividend stocks.
And yet, I rarely take notice of individual stock prices.
Sure, I’ll check how my total account balance is faring for the day, but I honestly couldn’t tell you which stocks are up and which are down if you asked me.
I just don’t care.
Now, this might sounds strange. After all, the financial media only ever talks about the second-by-second moves in stocks, which one is up the most for the day, which one is down, and so on.
It’s all pointless, if you ask me.
Here, let me tell you a personal story to show you why.
A recent personal realization illustrates how I see stock prices.
A few months ago, I happened to notice that Starwood Property Trust’s (STWD) share price was up over $23 per share. But in my head, it was still trading in the high-teens!
Starwood has been a Dividend Hunter stock since I launched the service in 2014, and it is my personal largest stock position. I’ve been accumulating shares since 2014.
And still, the fact that Starwood had jumped from the high-teens where I thought it was to $23 had completely passed me by!
I won’t deny that it was a pleasant surprise.
Historically, Starwood has traded around $24 to $25 per share. Just before the 2020 pandemic-triggered stock market crash, it was up to $26. During the crash, the share price dropped to less than $10.
Now, I was happy to pick up shares on the cheap during the dark days of 2020, and was not worried when the Starwood share price didn’t immediately recover. I just kept buying a few shares every month, and left it at that.
Buying with the market down paid off. Now, in the second half of 2021, Starwood trades close to $26 per share, and my brokerage account shows a 54% gain for my position. I am up more than 50% because I understand the company and the stock and backed up the truck to load up more when the shares got cheap.
But even that’s not the point.
See, the real beauty of buying Starwood on the cheap isn’t being 54% up.
It’s that my “yield-on-cost” – or, the yield I get based on how much I paid for my shares – on Starwood is now at 11.4%!
And I’m going to get that no matter what Starwood’s share price does from now on.
See, when it comes to the Dividends Forever you’ll during the Summit come May 2nd, the aim is to invest in high-yield securities to build a stable and growing income stream.
Share prices just don’t come into play…
Unless we get a chance to buy more shares when stock prices go “on sale,” of course.
It makes for a less stressful investing strategy, with much higher yields.
I can’t wait to show you all about it on May 2nd.
Land, fly, or die
Tim Plaehn