Great sir! I have a question when I apply this and then in Journal Entries it show two Account Receivables in credit 1. it is A/R with net received amount and the other A/R one with the same as discount amount , how to solve this problem by show only a single A/R account ?
I own a lot of SCHD but have recently thought about just owning the 70 highest-yielding stocks from SCHD in hopes of getting a 4.25% yield with decent dividend growth. I like what you're doing, especially with the #2 High Yield portfolio.
Hi Tom, we occasionally tweak our selection criteria, but I will likely do a video about this in the future. I just have to find the time because there are a lot of different factors involved.
Hi Old Trucker, we occasionally tweak our selection criteria, but I will likely do a video about this in the future. I just have to find the time because there are a lot of different factors involved.
I agree with your annual performance, but the equity curve u show is simply a fake. No dividend portfolios has a such high sharpe ratio. Just take 2022 when rates bursted stocks collapsed , all of them, and despite this ur equity curve is perfect…it’s just an awfull lie.
It's a cumulative portfolio. Meaning we deposit new funds each week, so of course the equity curve will go up and to the right even in a bad year like 2022. Even if the return was zero each and every week, the portfolio graph would rise because there are weekly deposits. You can see this for yourself using Excel. For 2022, use Excel and make a chart using an index ETF like SPY and track what a weekly $12.50 investment would look like on a chart. It's an actual Fidelity portfolio, not a backtest.
Dude, you must have missed the fact that they deposit $12.50 each and every week. Either that or you don't understand basic arithmetic. Of course the chart goes up and to the right.
First time for me to see your video, awesome! Is there somewhere more to read about the dividend growth strategy in detail on top what you already show here?
Rex love the channel - just want to make sure I understand the subscription option. You’ll provide recommendations on when to buy sell and rebalance right?
Hi Missouri, I do compare how our strategy does versus an ETF at the 12:19 mark. The ETF is ticker SCHD. Or are you talking about wanting a portfolio of ETFs? If so, any ETFs in particular, or are you (or others reading this) looking for us to come up with a portfolio of ETFs on our own?
Morning star has visa and Mastercard as fairly valued, meaning not trading at any discount. But you have them as 16% and 12% discount respectively. Just curious how you got these valuations?
Hi Anthony, here is my long-winded answer ... When trying to determine if a stock is over or under-valued, we want to make sure that our methodology is looking at the company’s future and not ONLY the recent past. This is so we can avoid buying a company whose business is about to tank. For example, if a drug company’s main source of profits is a single drug and that drug is going to go off patent, simply looking at the company’s Price-to-Earnings ratio won’t give you a warning sign. So we don’t use a simple formula that looks at past data to determine if a stock is undervalued; we need to look into the future which involves making estimates. And that’s where utilizing the time and effort of “trusted” analysts comes into play. Their full time job is to look at each individual company’s future outlook, something we obviously can’t do since we start with a database of 6,700 companies. And I say “trusted” analysts because many analysts are NOT independent and are simply courting companies with “buy” ratings on their stock in order to earn that company’s investment banking business (one such analyst company notoriously has a “sell” rating on only 0.4% of the stocks that they cover; when everything is a “buy,” then that company’s ratings are worthless). We are always tweaking our methodology, but for valuation, we currently use the target prices of independent analysts (preferably multiple analysts employing multiple philosophies, such value and growth-at-a-reasonable-price) and combine that with the company’s risk profile to determine the company’s margin of safety (ala Warren Buffett and Benjamin Graham). Margin of safety is important because we’d rather invest in a low-risk stock that is 10% undervalued rather than a high-risk stock that is 13% undervalued. And of course, from there we do a deep dive into the company’s accounting practices to look for red flags/accounting irregularities to hopefully avoid frauds like Enron. And we look at dividend sustainability, growth potential, buy-backs, etc.
Hi Joe, we do both dividend-growth and high-yield strategies. The first portfolio we started (in 2022) emphasizes dividend-growth stocks, but a few high-yielders occasionally make it into the portfolio. The portfolio we started on Aug 1 of 2023 is the high-yield strategy.
@@xJoeKing I consider high-yield to be 4% or higher. My current favorite with a very high yield is EPD. We are also looking for dividend growth as well as capital appreciation, so that eliminates the super-yielders like QYLD
Impressive returns! Have you considered looking into biotech stocks for diversification? Actinogen Medical is showing promising results in their latest trials for Alzheimer's treatment with their drug Xanamem. Their innovative approach could potentially offer both growth and high yields. Might be worth exploring in one of your upcoming videos!
I don't believe so. I think it's a pretty decent turnaround play and you get paid a 5.46% dividend yield while you wait. It's part of our High-Yield Dividend Stock Portfolio. We've made several purchases of it so far for an average total return of 12.02% with an average holding period of 158 days (that's a 30.0% annualized return using Excel's RATE function). Per Morningstar, "After years of restructuring via the spinoff of its consumer unit and the spinoff and merger of its legacy drug portfolio with Mylan, plus recent internal shifts to align the business with the post-covid world, Pfizer is set to be more nimble and innovative. Now past the boom and bust of the covid-19 vaccine sales cycle, and with no material near term patent expirations, the company is poised to generate steadier results."
Thanks again for keeping these videos up. I am no equity wizard but consider myself more finacially literate than the average person. I started following these a few months ago and have since added a handful of your picks to my portfolio. For now, most your best valued stocks seem to be defensive so the account your stock picks have been in balanced out a different brokerage account I have that is very tech heavy. After last weeks tech selloff it was awesome to see that my total portfolio value didn't even dip since that money simply rotated into the divided stocks🙌
Question for you. How often do you add to the Under-the-Radar Dividend-Payer stocks? Recently I have seen CRM and now ATMU added as U-T-RD-Ps. Do you make a one time small investment and "let it ride" (so to speak) or have you returned to these positions at some point and add another small investment when your formula shows it's the right time?
Another great update!! I would like to ask if you have some specific criteria for selling stokcs, apart from cutting dividend you referred in past videos. Thansk and have a nice week, Prof. Jacobsen!!
We have a 4-way rating that rates dividend-paying stocks based on 1) valuation, 2) quality, 3) dividend yield and recent dividend growth metrics, 4) Outlook for continued dividend growth. If a stock is no longer in the top 50%, it's on the watch list for possible sale. Also, if a stock's valuation looks extremely over-valued or it looks like the stock price will tank due to a business event, we'll sell. If a person wanted to keep it simple, they could just buy the quality stocks (not the under-the-radar-dividend payers) and hold forever, letting the winners run and letting the occasional losers just become insignificant parts of the portfolio overtime.
Love your very informative videos and I am learning a lot as I begin my investment education - thank you! But a very small nitpick: "NOC" company name is spelled Northrop Grumman (not Gruman), and is pronounced "Grum-min", not "Groom-in".
Nice to see that TMO has entered into your buying zone. I think that together with Visa and NOC are the most quality companies you bought this week. Regarding Chevron, do you have any book reference on investing in oil companies you think is interesting? I regard the oil sector as a sector in which the price of oil is very difficult to predict, and therefore, difficult to value. Thank your for keeping us updated on your portfolio, Prof. Jacobsen!!
I agree 100% that the unpredictable nature of oil prices make it difficult to value oil companies. But we are following a quantitative strategy in this portfolio and it's now dipping its toes into oil co's. It will be interesting to see how it goes. I don't have any book recommendations for evaluating the oil sector in particular, but I do recommend the book What Works on Wall Street for those that are fascinated with numbers/data/quantitative analysis.
The presentation was extremely useful. Can u plz mention the tools u used for creating such an interactive presentation. As a teacher myself it would be really helpful
When investors first start off, they usually invest part of each paycheck (on average, every 2 weeks). So we started this portfolio buying stocks every 2 weeks to replicate someone building a portfolio this way. It became a lot of fun, so we split the $25-every-two-weeks deposit to $12.50 per week. Since most people invest with every paycheck, we ideally want to see which stocks are the best at that time. For example, we are not buying the same exact stocks we bought a month ago, although several are the same. Prices change and what one looked like the best bargain last month might not be as good now.
The portfolio has been hovering around 94-95 stocks for quite a while now. New stocks haven't been added to the portfolio for several weeks. If one is building a portfolio to eventually live off the dividends, diversification is key, so no, 94 is not too many. Popular dividend-ETFs often have a lot more. The largest dividend-ETF (ticker VIG) has 341 holdings.
When trying to determine if a stock is over or under-valued, we want to make sure that our methodology is looking at the company’s future and not ONLY the recent past. This is so we can avoid buying a company whose business is about to tank. For example, if a drug company’s main source of profits is a single drug and that drug is going to go off patent, simply looking at the company’s Price-to-Earnings ratio won’t give you a warning sign. So we don’t use a simple formula that looks at past data to determine if a stock is undervalued; we need to look into the future which involves making estimates. And that’s where utilizing the time and effort of “trusted” analysts comes into play. Their full time job is to look at each individual company’s future outlook, something we obviously can’t do since we start with a database of 6,700 companies. And I say “trusted” analysts because many analysts are NOT independent and are simply courting companies with “buy” ratings on their stock in order to earn that company’s investment banking business (one such analyst company notoriously has a “sell” rating on only 0.4% of the stocks that they cover; when everything is a “buy,” then that company’s ratings are worthless). We are always tweaking our methodology, but for valuation, we currently use the target prices of independent analysts (preferably multiple analysts employing multiple philosophies, such value and growth-at-a-reasonable-price) and combine that with the company’s risk profile to determine the company’s margin of safety (ala Warren Buffett and Benjamin Graham). Margin of safety is important because we’d rather invest in a low-risk stock that is 10% undervalued rather than a high-risk stock that is 13% undervalued. And of course, from there we do a deep dive into the company’s accounting practices to look for red flags/accounting irregularities to hopefully avoid frauds like Enron. And we look at dividend sustainability, growth potential, buy-backs, etc.
when I open any attachment in the quickbooks it shows the error, failed to open file, the specified file was not found. what is this issue or what's the solution?
Just watching the video and I might have missed it. Have you changed your strategy in terms if limiting contributions to companies that make up more than 4% of your portfolio's value? Previously it sounded like you highlighted those in yellow and didn't buy them that week and went below the 10 actual best investments. As always, good video and discussion. Wish my college aged kids could take your course.
Hi Eric, that conservative rule is still in place. That was the first time where all 10 of the Top 10 were under the 4% (although several were very close, e.g. 3.98%).
