Dividend Stocks, Lunch Experiment Update:
Dividend Experiment Update
This month, long with the Stock market overall (the DOW is above 12,000 again… hooray), I gained in both EVEP and CIM! The stock ANH didn’t move staying the same price. If I could, I would like to get rid of ANH and buy something more conservative.
So far, I’ve been impressed with the performance of my experiment portfolio, I gained another 2% from last month. I’ve heavily invested in REITs, and I need to switch into another type of dividend stocks some day. Most likely, I will try to dump ANH… soon!
Background:
The Free Lunch Experiment, which invests in dividend stocks so that I can use the yield to pay for my work day lunches, is my first true experiment here at MoneyReasons.com and was started with the article called: “Paying An Adult Allowance, A Lunch Experiment”. As explained in the post link above, the money used in this experiment is sort of like free money because it would have been spent on eating lunches out at work anyway. This means that if I were to lose the money in this experiment tomorrow, it wouldn’t bother me because it really didn’t cost me anything to fund. Of course the probability of losing all my money in the stocks in the experiment is very slim.
Having practically free money in this experiment, I’m able to take higher risks that I normal would consider.
Now on to this month’s results!
| Stock Name | Anworth | EV Energy | Chimera | ||
| Stock Ticket | ANH | EVEP | CIM | ||
| # of Shares | 260 | 45 | 600 | ||
| Orig. Price | $7.84 | $23.25 | $4.01 | ||
| Curr. Price | $6.95 | $42.98 | $4.26 | ||
| Orig Cost | $2,038.14 | $1,046.25 | $2,404.80 | ||
| Curr Value | $1,807.00 | $1,934.10 | $2,556.00 | ||
| Annual Yield | 13.24% | 7.05% | 16.90% | ||
| Actual Dividend | $59.80 | $34.07 | $108.00 | ||
| Total Dividends | $807.48 | ||||
| 52 weeks | 52 | ||||
| Dividend / week | $15.53 | ||||
| Total Gain in | |||||
| Stock Apprec. | $807.91 | ||||
| % Change | 14.72% | ||||
| Amt Loaned to myself: | $1,726 | ||||
| Amt paid back to date: | $1,459 | ||||
| Amt Still Owned: | $267 | ||||
Priming the Pump:
As I stated in my previous posts, the money involved in this experiment is technically free money, to expedite the stock purchases I’ve borrowed money from myself a few times just to speed up the investing process, this action is called “priming the pump “. Of course I’m paying myself back. Currently, I still owe myself $267.
Modifications to the Experiment
I decided to wait to make changed to the experiment, I’m still rolling around ideas in my head, who knows… maybe I’ll end up putting the money in some dividend yielding mutual funds instead and just leave it g0! I wonder if I make enough in dividends if I’ll have to pay an estimated quarterly tax payment 2011?
-MR
Nice….. I’m a big fan of EVEP.
Yeah! EVEP has been great.
I’m debating whether to keep the REITs or not though… I’m sure their dividend payout will be cut if the interest rates start to rise (so I’m getting nervous) 🙂
I’m going to jump on the dividend bandwagon soon. I need to clean up my accounts though. I have too many things in too many places and need to do some housekeeping first. I think simplifying things is a good first step.
Cool.
I’m thinking of expanding more so in the dividend area too, but I may dump the REITs that I have listed above if the interest rates start to rise…
I have Annaly instead of CIM, love the dividends!
Hi MoneyCone,
Do you think that the feds may start to raise the interest rate(s) soon again?
I’m thinking of jumping out of NLY if they do decide to raise the interest rates…
i am not a big fan of dividend paying stocks because I am looking for growth. If the company is paying dividends, they do not reinvest that money into growth.
Hmm, generally you are right, those companies that pay out dividends are the more established companies that are past their peak growth periods…
I have both types of stocks, a diversified portfolio is a good thing 🙂
I am so happy that your dividend lunch experiment is doing so well. At first, I didn’t realize that this portfolio was more risky than most of your investments. Anyway, it’s a great concept and should be employed in multiple areas of life!
Yeah, the other “out of the lunch experiment” includes some energy stocks, and other stock that don’t pay dividends.
The stocks in this experiment is on the riskier side, but it’s fun 🙂
MR, when did you buy ANH? I can’t find in recent history when it was $7.84. (At least it did close at 7.05 today…)
I enjoy these updates, they are always motivating.
ANH has been my biggest disappointment so far in this experiment. I bought it on 09/16/2009.
I bought it for the dividend, but they keep cutting the dividend…
Are you reinvesting the dividends? Why not just shut off their stream and use the money to fund your next experiment (cough cough dividend aristocrats lol)
Actually, I have used the dividend money for pool water once, but for the most part, it does do into other stocks (mostly boring utility companies, but with a 5% dividend)…
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