tag:blogger.com,1999:blog-11147655083998437442024-03-05T19:34:43.704-06:00SENSIBLE STOCKS.com BlogDedicated to the success of the individual investorDave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comBlogger126125tag:blogger.com,1999:blog-1114765508399843744.post-11384474563772786542014-01-19T19:25:00.002-06:002014-01-19T19:36:01.131-06:00WEB SITE UPDATEDThe publication process for 2014 is now complete. I finished updating my Web site
today. <br />
<br />
Every page in the site received some modifications. All links have
been updated. I tested most of them and they seem to work properly. If anyone
finds a broken link or other error anywhere on the site, I'd appreciate it if
you would let me know.<br />
<br />
If you would like to see the detailed description page
for the new 2014 edition, please <a href="http://www.sensiblestocks.com/dividendtop40description.html"><strong><span style="color: #4d7307;">click here</span></strong></a>. Other pages of
interest:<br />
<br />
>>New <a href="http://www.sensiblestocks.com/dividendportfoliostrategy.html" target="_blank"><strong><span style="color: #4d7307;">constitution</span></strong></a> for my Dividend Growth
Portfolio.<br />
>>Year-end 2013 <a href="http://www.sensiblestocks.com/portfolio-dividend.html" target="_blank"><strong><span style="color: #4d7307;">report card</span></strong></a> for the Dividend Growth
Portfolio.<br />
>>Dividend growth investing <a href="http://www.sensiblestocks.com/dividendFAQ.html" target="_blank"><strong><span style="color: #4d7307;">FAQ</span></strong></a>.<br />
<br />
Once again, let me thank you for your
support and encouragement each year on this major project.<br />
<br />
<span style="color: #4d7307;"><em>Seeking Alpha</em></span> included me again in their "Positioning for 2014" series of interviews. If you would like to read my interview, you can go to the article by <a href="http://seekingalpha.com/article/1932201-dave-van-knapp-positions-for-2014-the-best-dividend-growth-stocks-will-pay-out-more-this-year" target="_blank"><strong>clicking here</strong></a>.<em> </em><br />
<br />
Now I will turn my attention to catching up on my email, paying bills, and hopefully writing a few articles for <em>Seeking Alpha</em>. I hope that I run into you there!Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-27421678816398988702014-01-16T13:18:00.001-06:002014-01-16T13:18:51.337-06:00THE 2014 EDITION IS NOW AVAILABLE!<strong><em></em></strong><br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2-6k6l_g7lKVgkkQu6yBKZLlHZQuJ38T96Ww2MtrS1ea_G4nmzWRGPwFB-8-Emjqhb8mVzq_W3A9vbxaLpdKtOQEdnH4HwFbCybtt0gqUzQ6X8EXboCvtsbZVvNhnQ9XEkevoCdyBhew/s1600/dvk-new-edition.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2-6k6l_g7lKVgkkQu6yBKZLlHZQuJ38T96Ww2MtrS1ea_G4nmzWRGPwFB-8-Emjqhb8mVzq_W3A9vbxaLpdKtOQEdnH4HwFbCybtt0gqUzQ6X8EXboCvtsbZVvNhnQ9XEkevoCdyBhew/s200/dvk-new-edition.jpg" width="149" /></a><strong><em>Top 40 Dividend Growth Stocks for
2014: A Sensible Guide to Dividend Growth Investing </em></strong>is now
available for purchase.<br /><br />As promised, it is being offered here first. It
will take me a day or two to update my Web site and make it available there, but
I can offer it here now for those who know that they want it without reading a
complete description of the publication. <br />
<br />
If you have any doubts, please wait for me to update the
informational page on my Web site so you can get a better idea about the
product. <strong>But if you wish to purchase it now, please use the blue Buy Now button in the upper right corner of this blog. </strong>If you are reading this post in an email, you cannot see the button. Please go to the full blog by clicking the title at the top of this email or by clicking here: <a href="http://sensiblestocksblog.blogspot.com/"><span style="color: #4d7307;"><strong>Sensible Stocks.com Blog</strong></span></a>. The button on this blog is the only purchase button that works at the present time. All of the buttons on my Web site have been disabled. I will update them for the new edition within a couple of days.<br /><br />Here are some important points about the new 2014 eBook:<br /><br />>>As in past years,
it is an Adobe PDF digital download eBook.
<br />
>>I recommend that you first download it to your PC before placing it on other devices.<br />>>While not specifically designed for e-Readers (such as Kindle or
Nook), it should display without problem on them. Follow the instructions for your device on how to transfer a PDF document to your device from your PC.<br />
>>The easiest way that I know to place it on your iPad is to email it to yourself, open that email on your iPad, and click open the attachment. You can then save it as an iBook. (I do not have experience with other tablets.)<br />
>>The eBook grew this year from 187
to 226 pages. I have significantly expanded coverage of several topics this year. I created a new chapter about my Dividend Growth Portfolio. <br />
>>As usual, each of
the Top 40 stocks has its own dedicated page with complete
analysis. New this year, I lowered the minimum yield requirement to 2.0%, at the request of younger readers who look forward to decades of compounding. Eight stocks with yields below 2.7% made the Top 40, several for the first time ever.<br />>>Again this year, Chuck Carnevale's popular F.A.S.T.
Graphs are used in valuing stocks. Through a special arrangement with Chuck, the
graphs in the book can be updated throughout 2014 at no additional charge. A
link is provided on each stock's page to update the graph for that
stock.<br />>>The price remains $40.<br />
<br />Thanks very much for your support and
interest, and I hope that the new edition helps your investing in
2014! I hope to see you over at <em>Seeking Alpha. </em>I should get back to writing articles by the end of the month.<br /><br />DaveDave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-56350803859136340372013-12-26T14:53:00.001-06:002013-12-26T14:54:54.398-06:00STATUS UPDATE ON 2014 EDITIONHi everyone,<br />
<br />
Happy Holidays! I thought I would let you all know where I am with the 2014 edition of <strong><em>Top 40 Dividend Growth Stocks: A Sensible Guide to Dividend Growth Investing.</em></strong><br />
<strong><em></em></strong><br />
First off, the eBook will have a fancy new cover this year, more professional looking. The cover design is thanks to my friends at <em>Daily Trade Alert, </em>for whom I wrote several articles this year.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2-6k6l_g7lKVgkkQu6yBKZLlHZQuJ38T96Ww2MtrS1ea_G4nmzWRGPwFB-8-Emjqhb8mVzq_W3A9vbxaLpdKtOQEdnH4HwFbCybtt0gqUzQ6X8EXboCvtsbZVvNhnQ9XEkevoCdyBhew/s1600/dvk-new-edition.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2-6k6l_g7lKVgkkQu6yBKZLlHZQuJ38T96Ww2MtrS1ea_G4nmzWRGPwFB-8-Emjqhb8mVzq_W3A9vbxaLpdKtOQEdnH4HwFbCybtt0gqUzQ6X8EXboCvtsbZVvNhnQ9XEkevoCdyBhew/s200/dvk-new-edition.jpg" width="149" /></a></div>
<br />
<br />
Second, I have completed the first draft of the text, at least as much as I can at this time. I still need to write the 2013 review and 2014 preview chapter; fill in the tables of 2013 performance; and add any text necessitated by the stock picks for 2014. Before publication, I will complete those sections and reread the text at least twice. I review it once for content and sensibility, and a second time for form. The reviews add 2-3 days to the production schedule, but I think they are worth it for a polished result.<br />
<br />
Most of my time recently has been devoted to selecting the Top 40 stocks. This is a multi-step process that began in October and really got rolling this month. I start with the CCC document (Dividend Champions, Challengers, and Contenders) which has about 470 names. I cull those stocks down by applying a few initial, quick tests. This year, I lowered my threshold for minimum yield down to 2%, because many readers have expressed interest in lower-yielding stocks of great companies that may have faster dividend growth rates. This meant that more stocks than normal passed my initial screens.<br />
<br />
Then I went through a second and then a third winnowing, using metrics that I could get quickly from the CCC document and from the Quote page for each stock on Morningstar. In stages, I reduced the original 470 names down to about 100, then 65, and most recently to 47. These are not fully "scored" yet (and won't be until full-year 2013 data is available), but it allows me to concentrate my efforts on the stocks most likely to make the Final 40 and not waste time on clear non-contenders.<br />
<br />
This week, I started writing the Stories for each remaining candidate. This is the most laborious part of the process, but it is necessary. I do not feel that someone should invest in a company unless they can briefly and coherently explain how the company makes money and why it should continue to do so. <br />
<br />
Creating the Stories can be revealing. Every year, one or two otherwise strong companies fails on the basis of its Story. I eliminated one today: Digital Realty Trust (DLR). It won't be in the Top 40, so I'm letting you know about it here so you can check it out if you like. After about an hour's research, it became apparent that I would not be able to write a brief coherent Story that would not be based on outright speculation about the company's future.<br />
<br />
I hope to get about 30 of the Stories done by the time we leave for Florida on Sunday. We will arrive on January 1 (we spend New Year's Eve un-glamorously on the road), and I will get the writing operation back in gear on January 1 or 2. If things go as they did last year, I should be able to publish the eBook around the middle of the month.<br />
<br />
The 2013 launch was on January 15, and I hope to hit that date again this coming year. <strong>As last year, the eBook will initially be available only from this blog. </strong>I will put a "Buy Now" button in the upper right corner of this page for those who know that they want to purchase without reading all the details and promotional material. <br />
<br />
After that launch, it will take me 2-3 days to update my Web site (<a href="http://sensiblestocks.com/">SensibleStocks.com</a>) to reflect information about the new edition. Then it will be available from both there and here.<br />
<br />
Happy New Year to all! I will see you on the other side.<br />
<br />
Dave<br />
<br />Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-89988119998016309392013-11-27T21:34:00.000-06:002013-11-27T21:44:17.670-06:00THE 2014 EDITION IS COMING!<br />
<div class="post-body entry-content" id="post-body-6061342744538595322" itemprop="description articleBody" style="text-align: left;">
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);">In October, I began work on the 2014 edition of <strong><em>TOP 40 DIVIDEND GROWTH STOCKS. </em></strong></span></div>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<div style="font-weight: bold; text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);">Actually, as in previous years, I have been working on it all year. Here's what I mean:</span></div>
<div style="font-weight: bold; text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);">As soon as the 2013 edition was published, I began collecting information for possible inclusion in the 2014 edition. Throughout the year, I maintain an ongoing file of items, including excerpts from my articles on <em>Seeking Alpha, </em>my comments there, my "lessons" in the <i>Daily Trade Alert</i>, and extracts from other sources that I find interesting. I keep building this file all year. I made a final search for additional new material in October. I ended up with more than 170 pages of potential new stuff!</span></div>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
I have been working the new material into the text for the last two months. That creates the first draft of the text. I<b> am very concerned about length, but I also want to be comprehensive. </b>So I try to eliminate redundancies and tighten the writing wherever I can. </div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<br /></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
Also throughout the year, I collect ongoing information about not only the current Top 40 stocks, but also other likely candidates. This is my 7th year in writing this eBook, and many of the same stocks turn up as legitimate candidates year in and year out. </div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<br /></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
In a few days, the December edition of the "CCC" document will be available. (For the uninitiated, that is the invaluable Dividend Champions, Contenders, and Challengers.) Those 500 or so stocks will be my starting universe to cull down to the eventual Top 40 for 2014.</div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<br /></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
There is one important change this year. <b>Because of interest expressed by many readers, I will consider stocks with yields as low as 2% this year, compared to 3% last year.</b> (I will still keep the requirement for <span style="background-color: rgba(255, 255, 255, 0);">utilities of at least 4% and for MLPs of 5%.) This will open up the doors for stocks such as ExxonMobil and Wal-Mart, excellent companies that have been ineligible in the past because of low yields. They must make up for their lower yields with higher dividend growth rates (DGR). I don't know whether any of these stocks will make it to the Top 40, but they will be eligible to compete.</span></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<b>I am making this change to a lower minimum yield this year at the request of many younger readers, who look forward to many years or decades of compounding.</b> They are willing to start with a lower initial yield for a high quality company if it has a higher DGR.</div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<br /></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<b>I am happy to report that once again this year the eBook will contain FASTGraphs for every stock. </b>These worked out great for valuation last year. By special arrangement, you will be able to update the FASTGraph for every stock throughout 2014. </div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<br /></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
There will also be at least one new chapter this year. My demonstration Dividend Growth Portfolio now has more than 5 years under its belt. It has proved to be a great teaching and learning tool. I am gathering all of the information about this portfolio into a self-contained chapter for maximum effectiveness.</div>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<div style="background-color: rgba(255, 255, 255, 0); text-align: -webkit-auto;">
<b>I am aiming for publication around mid-January, 2014.</b> Waiting until January allows me to incorporate full-year 2013 data for the stocks. As soon as the new edition is available, I will announce it in this newsletter first.</div>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);"><br /></span></div>
<span style="background-color: rgba(255, 255, 255, 0);"></span><br />
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);">Regards, </span></div>
<span style="background-color: rgba(255, 255, 255, 0);">
</span>
<div style="text-align: -webkit-auto;">
<span style="background-color: rgba(255, 255, 255, 0);">Dave</span></div>
<span style="background-color: rgba(255, 255, 255, 0);">
</span><br />
<div style="clear: both;">
</div>
</div>
<div>
<br /></div>
<div class="post-footer" style="-webkit-composition-fill-color: rgba(175, 192, 227, 0.230469); -webkit-composition-frame-color: rgba(77, 128, 180, 0.230469); -webkit-tap-highlight-color: rgba(26, 26, 26, 0.296875); -webkit-text-size-adjust: auto; background-color: #f7f0e9; color: #6a9718; font-family: Verdana, sans-serif; font-size: 10px; text-align: left;">
</div>
Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-50445142888648249932013-01-17T14:11:00.002-06:002013-01-17T14:11:58.540-06:00Web Site Has Been UpdatedThe publication process for 2013 is complete. I finished updating my Web
site today.<br />
<br />
Every page in the site received some modifications. All links have been updated. I tested most of them and they seem to work properly. If anyone finds a broken link or other error anywhere on the site, I'd appreciate it if you would let me know.<br /><br />If you would like to see the new description
page for new 2013 edition (aka the "landing page"), please <a href="http://www.sensiblestocks.com/dividendtop40description.html"><strong><span style="color: #4d7307;">click
here</span></strong></a>. Other pages of interest:<br />
<br />
>>New <a href="http://www.sensiblestocks.com/dividendportfoliostrategy.html" target="_blank">constitution</a> for my Dividend Growth Portfolio.<br />
>>Year-end 2012 <a href="http://www.sensiblestocks.com/portfolio-dividend.html" target="_blank">report card</a> for the Dividend Growth Portfolio.<br />
>>Dividend growth investing <a href="http://www.sensiblestocks.com/dividendFAQ.html" target="_blank">FAQ</a>.<br /><br />In its first two days since publication Tuesday evening, the new edition has set sales records. I appreciate so much your
support, encouragement, and purchases.<br /><br />Now I will turn my attention back
to catching up with my email and writing articles for <em><a href="http://seekingalpha.com/" target="_blank">Seeking Alpha</a>. </em>I
have only published a couple of articles in the last two months, but I have a lot of
ideas in the pipeline. I hope that I run into you there!<br /><br />Dave Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-77174972463619557362013-01-15T19:31:00.000-06:002013-01-15T19:43:43.768-06:00THE 2013 EDITION IS NOW AVAILABLE!I have completed the new edition! <strong><em>Top 40 Dividend Growth Stocks for 2013: A Sensible Guide to Dividend Growth Investing </em></strong>is now available for purchase.<br />
<br />
As promised, it is being offered here first. It will take me a day or two to update my Web site and make it available there, but I can offer it here now for those who know that they want it without reading a complete description of the publication. A complete informational page will be available in a day or two. If you have any doubts, please wait for the informational page to be completed so you can get a better idea about the product.<br />
<br />
Here are some salient points:<br />
<br />
>>As in past years, the <strong><em>Top 40</em></strong> is an Adobe PDF digital download eBook. <br />
>>While not specifically designed for e-Readers (such as Kindle or Nook), it should display without problem on them. It will display on any PC that has an Adobe reader, and I recommend that you download it to your PC first, then place it onto any other devices that you want.<br />
>>The eBook is 187 pages. I have expanded coverage of several topics this year. As usual, each of the Top 40 stocks has its own dedicated page with complete analysis.<br />
>>For the first time, Chuck Carnevale's popular F.A.S.T. Graphs are used in valuing stocks. Through a special arrangement with Chuck, the graphs in the book can be updated throughout 2013 at no additional charge. A link is provided on each stock's page to update the graph for that stock.<br />
>>The price remains $40.<br />
<br />
The "Buy Now" button to purchase <strong><em>Top 40 Dividend Growth Stocks for 2013: A Sensible Guide to Dividend Growth Investing </em></strong>is in the upper right corner of my blog/newsletter. If you are reading this post in an email, you cannot see the button. Please go to the full blog by clicking the title at the top of this email or by clicking here: <a href="http://sensiblestocksblog.blogspot.com/">Sensible Stocks.com Blog</a>. The button there is the only purchase button that works at the present time. All of the buttons on my Web site have been disabled. I will update them for the new edition within a couple of days.<br />
<br />
Thanks very much for your support and interest, and I hope that the new edition helps your investing in 2013!<br />
<br />
Dave<br />
<br />
<br />
<br />
<br />Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-56594813297006369392012-12-28T17:34:00.003-06:002012-12-28T17:34:51.904-06:00F.A.S.T. Graphs Come to Top 40I am happy to announce that <strong><em>Top 40 Dividend Growth Stocks for 2013: A Sensible Guide to Dividend Growth Investing</em></strong> will contain a significant new enhancement: F.A.S.T. Graphs(tm).<br />
<br />
In cooperation with Chuck Carnevale, the creator of F.A.S.T. Graphs, I will be using his graphs, along with Morningstar star ratings, to adopt a new approach to the important step of stock valuation.<br />
<br />
F.A.S.T. Graphs visually represent a stock's valuation in comparison to its fair or intrinsic value. The idea is to buy stocks "on sale" when you can, and avoid them when they are overpriced. Here, a picture is worth a thousand words:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZzcsjoaI5tr7_zi7WMd25NDETQ7ydFcGvmTDhEZmK610TvgJAIbIjN-QtFB8SYV4Dhh8r0AXQcXdwQDz5QVAjqc6185_PBDqFaGBXbhMXDHOWh6CpYWuuobpienzluElmS4hre1WHDoM/s1600/jnj.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZzcsjoaI5tr7_zi7WMd25NDETQ7ydFcGvmTDhEZmK610TvgJAIbIjN-QtFB8SYV4Dhh8r0AXQcXdwQDz5QVAjqc6185_PBDqFaGBXbhMXDHOWh6CpYWuuobpienzluElmS4hre1WHDoM/s320/jnj.JPG" width="320" /></a></div>
<br />
On the chart, Johnson & Johnson's fair value is represented by the orange line, what Chuck calls the "earnings justified" value. The black line is JNJ's actual price. As you can see, the black line is a little below the orange line. In other words, JNJ is a bit undervalued at the moment. That makes it more attractive.<br />
<br />
F.A.S.T. Graphs have been gaining popularity with <em>Seeking Alpha </em>readers, and you can see why. They are so easy to interpret. In this chart, called the "Estimated Earnings and Return Calculator," Chuck uses the historically common Price/Earnings ratio of 15 to draw the orange fair value line. The year 2012 is based on actual earnings for JNJ. The projections forward for five years are based on consensus analyst estimates for the expected growth rate in JNJ's earnings. You see a slow and steady growth rate of about 7% per year.<br />
<br />
Each of the Top 40 stocks will have an image like the one above on its Easy-Rate(tm) Scoresheet. But (as they say on TV), <em>Wait, there's more! </em>Beneath each image will be a link to the F.A.S.T. Graphs website. Throughout 2013, you will be able to click on that link and go view a chart that is up to date as of the moment you click the link. With Chuck's kind cooperation, these links will be open and live all year!<br />
<br />
In the coming edition, I have reduced the valuation factors to two: Morningstar's stars, and F.A.S.T. Graphs' charts. Morningstar updates their star rankings throughout the year, and F.A.S.T. Graphs are updated daily. So with just a couple of clicks, you will be able to derive an up-to-date stock valuation throughout the year. <em>That's why I am so excited about this enhancement.</em><br />
<em></em><br />
The eBook is proceeding swimmingly. Tomorrow (Saturday) we leave for Florida, to arrive on Tuesday, January 1 (2013!). After we get settled, it will take me 2-3 weeks to update everything with full-year information, double-check the whole eBook, and load it up. So I expect publication some time between about January 15 and January 22.<br />
<br />
As last year, the first place that the 2013 edition will be available is right here. I will install a "buy" button here a couple of days before I can update my SensibleStocks.com website. <br />
<br />
I will post another brief article when the eBook is available, with instructions on how to order it right from here (the blog site). It will be in the upper-right corner.<br />
<br />
Happy New Year everyone!<br />
<br />
Dave<br />
Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-8413919139915631282012-12-01T13:06:00.002-06:002012-12-01T13:07:35.289-06:002013 Edition UpdateI am still on track to publish the 2013 edition of <strong><em>Top 40 Dividend Growth Stocks </em></strong>in mid-January.<br />
<br />
Here is the status of everything as of today:<br />
<strong></strong><br />
<strong>Stocks: </strong>My original list of >500 candidates has been winnowed to just under 100. In December, I will go through the remaining candidates, apply several Easy-Rate factors to them, and try to get the list down to 45-50. I will then fully rate those names in the first week of January (when full-year 2012 data is available) and select the final Top 40.<br />
<br />
<strong>Text: </strong>During November, I worked my way through about 80% of the text, updating it and adding new features and information. The text grows every year. Even as I tighten it up, new subjects and more complete discussions make the overall size grow. Some of the new or expanded coverage this coming year will include:<br />
>> More complete treatment of risk.<br />
>> Better coverage of diversification.<br />
>> Added emphasis on the importance of valuation.<br />
>> Several new definitions in the glossary.<br />
>> Addition of beta as a scoring factor. (Lower beta, meaning less volatility, is better.)<br />
<br />
Every year, I agonize over the sub-title. The main title--<strong><em>Top 40 Dividend Growth Stocks</em></strong>--does not capture the full essence of the eBook. Sometimes I think that the most important content is not the Top 40 themselves (as important as they are), but rather the step-by-step investing guide along with the foundational discussions that support the whole dividend growth strategy. At the moment, I have two versions of the sub-title:<br />
>>
The Theory and Practice of Dividend Growth Investing
<br />
>> A Step-by-Step Guide to Dividend Growth Investing<br />
<br />
Last year's sub-title was "How to Create and Maintain a Dividend Growth Portfolio."<br />
<br />
Obviously, I want to convey that this eBook is far more than a list of 40 stocks. The text has more than twice as many pages as are used to cover the Top 40 stocks themselves.<br />
<br />
If you have any thoughts about the best sub-title, please drop me an email. Thanks!<br />
<br />
Regards,<br />
Dave<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="color: #7a1d00; font-family: "Verdana","sans-serif"; font-size: 24pt;"><o:p></o:p></span></b> </div>
<br />Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-60613427445385953222012-10-23T06:40:00.001-05:002012-10-23T06:52:43.214-05:00THE 2013 EDITION IS COMING!I have begun work on the 2013 edition of <strong><em>Top 40 Dividend Growth Stocks.</em></strong><br />
<strong><em></em></strong><br />
Actually, I have been working on it all year. As soon as the 2012 edition was published, I began collecting information for possible inclusion in the next edition. I maintain an ongoing file of items, including excerpts from my articles on <em>Seeking Alpha, </em>my comments there, and extracts from other sources that I find interesting or useful. I keep this file building all year, adding to it as time goes on. I make a "final search" for additional new material in October. I recently completed that updating operation. I have >150 pages of potential new stuff!<br />
<br />
Also throughout the year, I collect ongoing information about not only the current Top 40 stocks, but also other likely candidates. This is my sixth year in writing this eBook, and I have learned that many of the same stocks turn up as legitimate candidates year in and year out, even if they do not make it into the Top 40. Then in October, I do an independent search for other candidates to add to the "starting universe" of potential Top 40 stocks.<br />
<br />
This year's starting universe included more than 450 stocks. I have already culled that list by applying some simple basic requirements:<br />
<ul>
<li>Yield must be at least 3.0%. For utilities, yield must be at least 4.0%. For banks I use 3.8% and for MLPs 6.0%. (The latter requirements are there, because there are so many utilities, banks, and MLPs in the initial universe. Might as well eliminate the lower-yielding ones right from the beginning.)</li>
<li>Stocks that are significantly overvalued (as shown by Morningstar or their P/E ratio) have been deleted.</li>
</ul>
The application of those basic tests brought the candidate list under 85. Then I added back some of those I had just eliminated, because I want to take a closer look. Among those added back were any members of 2012's Top 40 that failed the initial tests. The remaining group of candidates, which I call the Semi-Finalists, number 94. I will put those through rigorous testing and winnowing right up until a day or two before publication of the 2013 edition. <br />
<br />
This morning, I turned my attention to updating the text. This will take most of the rest of the year. The 150 pages of potential new material exceeds last year's size of the entire eBook! I need to integrate it wherever possible, eliminate duplicate information, and create new sections (or even a new chapter) to incoporate the new information. Every year, the text gets tighter and tighter, yet contains more information than the year before. The text will probably grow by several pages; that has been the pattern from the beginning.<br />
<br />
I am aiming for publication around mid-January, 2013. Waiting until January allows me to incorporate full-year 2012 data for the stocks. As soon as the new edition is available, I will announce it in this newsletter first.<br />
<br />
Regards, <br />
DaveDave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-36783026215438654152012-01-20T13:13:00.000-06:002012-01-20T13:13:59.354-06:00Web Site UpdatedThe total publication process for 2012 is complete. I finished updating my Web site today. Practically every page in the site is new, if for no other reason than to update links pertaining to the new edition, <strong><em>TOP 40 DIVIDEND GROWTH STOCKS FOR 2012: How to Create and Maintain a Dividend Growth Portfolio.</em></strong><br />
<br />
If you would like to see the new description page for the eBook (aka the "landing page"), please <a href="http://www.sensiblestocks.com/dividendtop40description.html">click here</a>. Also, if anyone finds a broken link or other error anywhere on the site, I'd appreciate it if you would let me know.<br />
<br />
In its first week of publication, the new edition has set sales records. I appreciate so much your support, encouragement, and purchases.<br />
<br />
Now I can turn my attention back to catching up with my email and writing articles for <em>Seeking Alpha. </em>I have published only one article since the end of October, but I have a lot of ideas in the pipeline. I hope that I run into you there!<br />
<br />
DaveDave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-73620001984057527342012-01-14T16:11:00.002-06:002012-01-14T16:25:33.423-06:00TOP 40 DIVIDEND GROWTH STOCKS FOR 2012 IS NOW AVAILABLE!The new edition of <strong><em>TOP 40 DIVIDEND GROWTH STOCKS FOR 2012</em></strong> was published on January 14. For the next few days it will ONLY be available from this Newsletter. It will take a few days to update my main website. <br />
<br />
If you know that you want to purchase the new edition without reading a complete description of it, click the "Buy Now" button that appears to the upper right. <strong>This is the only button that will work at the present time.</strong> The buttons on my main website have been disabled. <br />
<br />
If you are reading this as an email subscription version of my newsletter, you cannot see the "Buy Now" button. Click on the blue title at the top of this article. That will take you to the online version of this Newsletter, and you can purchase the new edition from there.<br />
<br />
Thanks to everyone for all your support! I hope that you find the new 2012 edition to be helpful in your investing!<br />
<br />
<div class="separator" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; clear: both; text-align: center;"></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: 1em; margin-right: 1em; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqZHGlaL9HMYLLZTinKFWg4hJBti9a0tMrE7eMGJAQTd7O9pLm8v1gd3Ik7r7j4batsznkP9ycxTOR5XTK9uHGSceJrpFyx2S4kJWu4ogqVCuF_zShobttzugJWJqeZxQP0LQFpMWLzGo/s1600/2012+cover+jpeg+image.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="200" kba="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqZHGlaL9HMYLLZTinKFWg4hJBti9a0tMrE7eMGJAQTd7O9pLm8v1gd3Ik7r7j4batsznkP9ycxTOR5XTK9uHGSceJrpFyx2S4kJWu4ogqVCuF_zShobttzugJWJqeZxQP0LQFpMWLzGo/s200/2012+cover+jpeg+image.JPG" width="155" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">NOW AVAILABLE!</td></tr>
</tbody></table>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-56874385799611048122012-01-04T12:22:00.000-06:002012-01-04T12:22:22.134-06:002012 Edition -- Progress ReportI have received many inquiries about <strong><em>Top 40 Dividend Growth Stocks for 2012.</em></strong> Here is the latest news.<br />
<br />
First, to answer the most basic question. <strong>Yes, there will be a 2012 edition</strong>. It will be available in a week or two.<br />
<br />
I have been working on the 2012 edition since October, when I first began to update, add new material, and reorganize the text. When I needed a break from that, I turned my attention to the Top 40 stocks themselves. Beginning with a starting list of over 450 candidates, I used a series of preliminary tests to knock out obvious non-contenders. After that, the analysis became more detailed. I got the pile down to about 60 "Finalists" in December. Further study has reduced that number to 48. About 32-33 of those are "in," and the rest will be selected after further study. <br />
<br />
The eBook's subtitle this year will be <strong><em>How to Create and Maintain a Dividend Growth Portfolio. </em></strong>I have received numerous comments from readers that the text--the investing guide--is more important than the Top 40 stocks themselves. I considered flipping the title, emphasizing the guide and dropping the Top 40 to subtitle status. Like this: <strong><em>2012 Edition: How to Create and Maintain a Dividend Growth Portfolio featuring Top 40 Dividend Growth Stocks for 2012. </em></strong>But I rejected that because the ongoing <strong><em>Top 40 </em></strong>title has built up an identity of its own. A subtle change in the title this year is to drop the hyphen between DIVIDEND and GROWTH. I want to convey that in this strategy of investing, not only do dividends grow, but generally the stock values grow too.<br />
<br />
I am making several improvements and upgrades to the text this year:<br />
<ul><li>The chapters have been expanded so that there is one full chapter for each "phase" of stock investing: (1) finding excellent companies; (2) valuing them so that you can buy them at attractive prices; and (3) portfolio management. The discussions of all these topics have been enhanced.</li>
<li>I am adding a "Resource and Article Guide" chapter. This will collect in one place the various resources that I use in writing the eBook, and which I suggest that you use when you are evaluating companies. Plus it will contain a complete guide to the many articles that I have written on dividend growth investing, with direct links to the articles.</li>
<li>Other new features this year include: a table of all stocks that have ever made a Top 40 list by year; a new chapter on the conceptual and theoretical foundations for dividend growth investing; and a new valuation metric using Morningstar’s "star" stock ratings.</li>
<li>I decided to opened the Top 40 list to tobacco stocks this year. I had not done that previously, because smoking killed both of my parents. But I decided that I was allowing personal considerations to influence business decisions. People can decide for themselves what companies they do or don't want to invest in based on personal beliefs. I will also cap the number of MLPs (to around 6-8) in order to get a wider variety of stocks into the Top 40.</li>
</ul>Publication of the new eBook may be delayed into the third week of January, because we will be having houseguests, and I will not be able to work on the manuscript for a few days. It's always something! Some of you may recall that last year, I had a hard-drive crash at the worst possible time. (And thanks for all of you who told me to get an online backup sytem. Several suggested Carbonite, and I use it now.) <br />
<br />
When it is first available, I will announce the 2012 release <strong>in this newsletter only. </strong>That's not because I'm being coy, but rather it's because I can get an announcement in here almost immediately, including a "Buy" link for those who know they want the eBook without further information. It will take me 2-3 days to update my website to reflect the new edition, which will include a new "description page" about the eBook.<br />
<br />
Thank you to everyone for your encouragement and suggestions throughout the year! The encouragement helps keep me going, and several of your suggestions have been implemented in this year's edition.<br />
<br />
Stay tuned!Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-67451305459378921202011-12-05T09:34:00.000-06:002011-12-05T09:34:20.518-06:00Portfolio ReviewsIn dividend-growth investing, you are relieved from watching the market every day and agonizing over its every move. However, dividend-growth investing is not "buy and forget." It is "buy and monitor." I monitor my portfolio in two ways.<br />
<ul><li>I keep up with news on my stocks. If a catastrophe happens, such as last year's oil spill by BP, I want to know about it and decide if it is likely to threaten the company's dividend.</li>
<li>Twice per year, I conduct formal <strong>Portfolio Reviews<em>.</em> </strong>These are methdocial, stock-by-stock examinations that come from a higher, strategic point of view. I want to know if each stock is successfully fulfilling its role in the portfolio or whether it is a candidate for sale or swap. </li>
</ul>I have written several articles on actual portfolio reviews for my Dividend Growth Portfolio. These articles illustrate the information examined and the kind of thinking involved.<br />
<br />
<strong><a href="http://seekingalpha.com/article/223084-portfolio-forensics">Portfolio Forensics</a> </strong>(August 3, 2010). This first article in the series explained that during a Portfolio Review, the burden is placed on each company to prove why it should be kept<em>.</em> I described the sorts of questions that I ask about each company. This review led to the selling of three positions.<br />
<br />
<strong><a href="http://seekingalpha.com/article/265396-dividend-growth-portfolio-review-sherwin-williams-is-out">Dividend Growth Portfolio Review: Sherwin Williams Is Out</a> </strong>(April 26, 2011). The review last April led to the decision to sell Sherwin Williams, because its dividend increases and yield had stagnated but its price had ballooned. I was able to redeploy the money to better advantage elsewhere.<br />
<br />
<span><a href="http://seekingalpha.com/article/298953-dividend-growth-portfolio-semi-annual-review-pretty-boring-stuff-the-dividends-just-keep-increasing-yawn"><strong>Dividend Growth Portfolio Semi-Annual Review: Pretty Boring Stuff... The Dividends Just Keep Increasing (Yawn)</strong></a><strong> </strong>(October 11, 2011). As the title of this article implies, this Portfolio Review led to no changes. Everything is working to my satisfaction.</span><br />
__________<br />
<br />
The complete methodology for Portfolio Reviews is explained in my annual eBook on dividend-growth investing. <strong><em>Top 40 Dividend Growth Stocks for 2012</em></strong> is now being prepared. I'm working on it nearly every day, and I hope to release it in mid-January after I get my hands on year-end numbers. In addition to the Top 40 list (and complete analysis of each stock), the eBook will contain a comprehensive guide to the investing strategy, from how to pick stocks to how to manage your portfolio. Some readers have told me that the investment guide is more important than the list and analyses of the Top 40 stocks. In fact, I considered changing the title this year (to <em>How to Create and Maintain a Dividend-Growth Portfolio)</em>, but I feel that the <strong><em>Top 40 </em></strong>title is now well established, so will leave it alone.<br />
<br />
As soon as the new edition is available, I will announce it in this newsletter first.Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-31218659454442882642011-11-26T14:40:00.000-06:002011-11-26T14:40:41.039-06:00Dividend Growth Investing and RetirementI am continuing here with my <em>Seeking Alpha</em> articles organized by topic. This post's subject is retirement. I have written several articles on the subject of dividend growth investing's relationship to investing for retirement. <br />
<br />
I have become frustrated with the retirement and investment advisory industries' failure to include dividend-growth investing as worthy of consideration for retirement planning. The "standard" industry approach to retirement funding goes something like this:<br />
<ol><li>Invest all your life to reach "The Number." That's as big a collection of assets as you can amass. There are various ways to compute <em>Your </em>Number. One common method, and one which is usually extremely misleading, is to say that you will need retirement income equal to 70% of your final working year's salary.</li>
<li>As you approach retirement, convert a large portion of your assets from riskier to "safer." <em>Safety</em> is invariably associated with bonds, completely ignoring the fact that bond interest (and the principal itself) is powerless against inflation, because it stays static for the life of the bond.</li>
<li>In retirement, withdraw from your assets to create the income you need. That is, you sell your assets--you liquidate them.</li>
<li>Hope that you don't outlive your money. </li>
</ol>You can immediately see why I believe that dividend-growth investing should be considered as an alternative to the conventional approach to retirement planning. For one thing, while I too believe you should focus on a number, it is not the largest pile of assets you can assemble, but rather it is the <em>annual income</em> you will need each year in retirement. For another, if you have been accumulating assets that <em>themselves</em> produce income, then you don't have to convert them--thus sidestepping market risk during the conversion. Yet another point is that each dollar your assets produce as income wipes out a dollar that you would have to create by selling something off. In the ideal case, if your investments produce enough income each year that you do not ever have to sell anything, you <em>guarantee</em> that you won't outlive your money. Finally, dividend-growth portfolios produce income that rises each year, usually faster than inflation. Thus inflation is wiped out as a worry factor.<br />
<br />
<strong>Topic: Retirement</strong><br />
<br />
The following series of four articles are the most highly-read articles that I have published on <em>Seeking Alpha. </em>The <em>4% Rule</em> referred to in each title is the conventional rule for withdrawing assets in retirement: Withdraw 4% in Year 1, then increment that each year by 3% to account for inflation. (You wouldn't believe what that makes your withdrawal amounts in the later years of retirement.)<br />
<br />
<a href="http://seekingalpha.com/article/282151-retirement-s-4-rule-surprising-answers-you-need-to-know-about-the-inflation-factor"><strong>Retirement's 4% Rule: Surprising Answers You Need to Know About the Inflation Factor</strong></a><strong> </strong>(July, 2011) This Editor's Pick article generated more than 350 comments. It introduces Mr. and Mrs. Growth, who plan their retirement according to conventional financial advice. Even though they save a cool $1,000,000 for retirement, they get surprised by how inflation (at 3% per year) forces them to withdraw more and more money each year. Despite similar-sized returns on their assets, their money runs out in Year 25 of a planned 30-year retirement. In other words, they're screwed.<br />
<br />
<a href="http://seekingalpha.com/article/284494-retirement-s-4-rule-the-importance-of-return-sequence"><strong>Retirement's 4% Rule: The Importance of Return Sequence</strong></a><strong> </strong>(August, 2011) In this article, we try some different withdrawal and return scenarios to see if they help Mr. and Mrs. Growth or hurt them even more. Along the way, we see how damaging it can be to need to make withdrawals early in retirement if that happens to coincide with a bear market. People who retired in 2008 can relate to this. So can people who retired in 2000-2001. The combination of a declining market and <em>making </em><em>withdrawals</em> to fund retirement is a recipe for disaster.<br />
<br />
<a href="http://seekingalpha.com/article/290289-retirement-s-4-rule-why-mr-mrs-income-don-t-need-it-part-1"><strong>Retirement's 4% Rule: Why Mr. & Mrs. Income Don't Need It (Part 1)</strong></a> (August, 2011) This article introduces Mr. and Mrs. Income, who saved for retirement by relying largely on dividend-growth concepts instead of amassing a Giant Number. They went to a financial planner who advised them on shooting for The Number, but they rejected that advice. Instead, they decided to do it themselves, creating a portfolio of some bonds and lots of dividend-growth stocks. This article was an Editors Pick and drew more than 300 comments.<br />
<br />
<a href="http://seekingalpha.com/article/290294-retirement-s-4-rule-why-mr-mrs-income-don-t-need-it-part-2"><strong>Retirement's 4% Rule: Why Mr. & Mrs. Income Don't Need It (Part 2)</strong></a> (August, 2011) This article follows Mr. and Mrs. Income through their retirement. Using the same scenarios that destroyed Mr. and Mrs. Growth, we discover that the Incomes' portfolio worked wonderfully. The total income needed by the couple in 30 years of retirement was a little over $1.9 million. Their portfolio actually delivered more than $2.5 million. This article drew more than 450 comments, which as far as I know is the record on <em>Seeking Alpha.</em> I have never seen an article there with more comments. <br />
<br />
The following series of articles appeared in 2010. The titles are pretty self-explanatory.<br />
<br />
<a href="http://seekingalpha.com/article/214588-financing-retirement-it-s-all-about-income"><strong>Financing Retirement: It's All About Income</strong></a><strong> </strong>(July, 2010)<br />
<br />
<a href="http://seekingalpha.com/article/214589-financing-retirement-what-s-your-real-number"><strong>Financing Retirement: What's Your Real Number?</strong></a><strong> </strong>(July, 2010) Hint: It's how much income you'll need.<br />
<br />
<strong><a href="http://seekingalpha.com/article/216640-financing-retirement-turning-capital-into-income">Financing Retirement: Turning Capital into Income</a> </strong>(July, 2010)<br />
<br />
<strong><a href="http://seekingalpha.com/article/218289-financing-retirement-asset-allocation">Financing Retirement: Asset Allocation</a> </strong>(August, 2010)<br />
<br />
<strong><a href="http://seekingalpha.com/article/220487-financing-retirement-the-cistern-analogy">Financing Retirement: The Cistern Analogy</a></strong> (August, 2010) I love this metaphor for visualizing retirement. It's better than "nest egg," because a cistern is dynamic, with inflows (dividends, interest, Social Security, pension payments), outflows (taking the income for spending money), and a leak (inflation).<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCmXwk_Oq-21S-LzJsoGEQ5o7RoHoBvTWTEm9dJR8b1cq0zbomtdP45HC17_MtYU_4jEnotLuDGL4g2BG-EVrBtKNpM2cWpgjfnh0hkvkEwh3L2gumzv2KLZpG3Wt7MPYtKin40tsN76M/s1600/cistern.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" hda="true" height="294" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCmXwk_Oq-21S-LzJsoGEQ5o7RoHoBvTWTEm9dJR8b1cq0zbomtdP45HC17_MtYU_4jEnotLuDGL4g2BG-EVrBtKNpM2cWpgjfnh0hkvkEwh3L2gumzv2KLZpG3Wt7MPYtKin40tsN76M/s320/cistern.jpg" width="320" /></a></div>The following articles are on various retirement subjects.<br />
<br />
<a href="http://seekingalpha.com/article/267402-a-sampling-of-investment-advisors-seeking-dividend-growth-for-your-retirement-portfolio"><strong>A Sampling of Investment Advisers Seeking Dividend Growth for Your Retirement Portfolio</strong></a><strong> </strong>(May, 2011) Not all investment advisers follow the conventional path. There are a few who 'get it" about dividend growth approaches. This article drew more than 140 comments.<br />
<br />
<a href="http://seekingalpha.com/article/256958-you-re-retiring-where-is-your-income-going-to-come-from"><strong>You're Retiring: Where Is Your Income Going to Come From?</strong></a><strong> </strong>(March, 2011). This Editors Pick article was directed at professional financial planners. I asked them to tell me: "Why are the unique characteristics, benefits, and risks of dividend-growth portfolios ignored? Why are dividend-growth stocks never singled out as an investment category well suited to the needs of retirees, instead of being lumped in with all other stocks? Why are the rising-income-generating qualities of dividend-growth stocks never mentioned? Why is the dollar-for-dollar offset of dividend income against capital withdrawals never discussed?" There were nearly 400 comments.<br />
<br />
<strong><em>Top 40 Dividend Growth Stocks for 2012</em></strong><br />
<br />
I have been receiving inquiries daily about whether there will be a 2012 edition of <em>Top 40,</em> and if so, when will it come out?<br />
<br />
The answers are <strong>yes</strong> and <strong>mid-January.</strong> Readers of this newsletter will be the first to know, as I will announce the launch here. Thanks for your interest!!Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-4753684932639941162011-11-15T09:09:00.000-06:002011-11-15T09:09:52.019-06:00Where Have I Been?I had hoped to write some original material for this newsletter after I stopped the Timing Outlook in June, but that hasn’t worked out. Keeping up with articles on <strong><em>Seeking Alpha</em></strong> (SA), plus other activities, have burned up all of my available time.<br />
<br />
I am in the process of preparing the 2012 edition of <strong><em>Top 40 Dividend Growth Stocks for 2012</em></strong>. A new feature I want to add in 2012 is a guide to all of the articles I have written over the years on dividend-growth investing. I think that will provide a library of sources for people who want to delve deeper into certain subjects. I already work the major points from articles into the eBook itself—that is a primary reason that the text changes from year to year. But I can’t work everything in—the text would become too long. Hence the desire to provide a guide to source articles.<br />
<br />
I thought that I would start that work now, and provide it to you here prior to publishing <strong><em>Top 40</em></strong> in January. My thinking right now is to present the guide in logical clusters of articles. It’s natural to start with the basics. So here is the first installment in next year’s guide to articles about dividend growth investing.<br />
<br />
<strong>Dividend Growth Investing: The Basics</strong><br />
<br />
<strong><a href="http://seekingalpha.com/article/303601-here-s-what-mr-market-says-ban-dividends">Here’s What Mr. Market Says: “Ban Dividends”</a></strong> A fun interview with Mr. Market, the fictional(?) fellow that controls all market movements. An Editors’ Pick that has picked up more than 115 comments. (October 31, 2011)<br />
<br />
<strong><a href="http://seekingalpha.com/article/272887-debating-dividends-what-would-you-want-your-company-to-do-with-its-excess-cash">Debating Dividends: What Would You Want Your Company to Do With Its Excess Cash?</a></strong> Is it better for a company to retain all of its earnings or to send some of the earnings to shareholders as dividends? It depends on several factors that are discussed in this article. An Editors’ Pick that attracted more than 230 comments. (June 2, 2011)<br />
<br />
<strong><a href="http://seekingalpha.com/article/268096-are-dividend-growth-stocks-a-distinct-asset-class">Are Dividend-Growth Stocks a Distinct Asset Class?</a></strong> Asset classes are the major categories of investments, such as stocks and bonds. This article explores whether dividend-growth stocks are unique enough in their own right to comprise their own asset class. There are more than 100 comments to the article. (May 5, 2011)<br />
<br />
<strong><a href="http://seekingalpha.com/article/263775-the-5-year-rule-in-dividend-growth-investing">The 5-Year Rule in Dividend Growth Investing</a></strong>. I require 5 straight years of dividend increases for a stock to be eligible for the Top 40 list. This article explains why. 123 comments. (April 15, 2011)<br />
<br />
<strong><a href="http://seekingalpha.com/article/259815-portrait-of-a-beautiful-dividend-growth-stock">Portrait of a Beautiful Dividend Growth Stock</a></strong>. This article examines the stocks that have made every Top 40 list since I began the series in 2008 and investigates what they have in common. 89 comments. (March 23, 2011)<br />
<br />
<strong><a href="http://seekingalpha.com/article/187516-why-i-love-dividends">Why I Love Dividends</a></strong>. This article marked my entry into an age-old debate that continues to the current day. Some people love dividends and others do not. This article explains why I do. 139 comments. (February 9, 2010)<br />
<br />
<strong><a href="http://seekingalpha.com/article/138136-dividends-a-company-s-leading-indicator">Dividends: A Company’s Leading Indicator</a></strong>. This article concludes from other studies that the amount by which a company raises its dividend is often a leading indicator of how it sees its own fortunes playing out over the next few years. (May 18, 2009)<br />
<br />
<strong><a href="http://seekingalpha.com/article/93703-why-dividend-investors-view-stocks-differently">Why Dividend Investors View Stocks Differently</a></strong>. The difference between traders and investors. (September 3, 2008)<br />
<br />
<strong><a href="http://seekingalpha.com/article/91333-4-qualities-of-the-best-dividend-stocks">4 Qualities of the Best Dividend Stocks</a></strong>. An Editors’ Pick. What to look for in a good dividend stock. (August 17, 2008)Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-62224514384931553692011-06-22T18:57:00.000-05:002011-06-22T18:57:18.256-05:00Final Timing OutlookI have decided to stop publishing the Timing Outlook. I have had increasing difficulty keeping up with the bi-weekly publication schedule. I also have had insufficient time to analyze capital-gains stocks for more than a year, with the result that I only use SPY (which tracks the S&P 500) as an investment vehicle for my Capital Gains Portfolio. I feel that I am doing my readers a disservice with such paltry informatkion.<br />
<br />
Since I became seriously interested in dividend-growth investing in 2008, I have found that pursuit to be more fun and rewarding personally. Most of my original articles are now about dividend investing, and most of them are published on Seeking Alpha. I have even fallen behind on posting summaries of them here, which is another reason to drop the Timing Outlook. With the time freed up, I hope to catch up on the summaries here and maybe also post some original content here.<br />
<br />
Thanks for all the emails--questions, kudos, and criticisms--about the Timing Outlook and market commentaries. I have really appreciated them. I hope that the Timing Outlook has demonstrated that market timing is possible if not perfectible. I also hope that it has illustrated a way to keep emotions out of investing. That's an important trait for any investor no matter what the strategy.<br />
<br />
The Timing Outlook is not copyrighted or trademarked, so if anyone wants to pick it up, feel free to do so. All of the indicators are available for free on the Internet. If anyone picks it up and publishes the results, please let me know.<br />
<br />
Thanks again for reading. Please continue your subscriptions to this newsletter as I go through this transition. I hope to keep the newsletter useful and attractive as I change its focus.<br />
<br />
Regards,<br />
DaveDave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-25709878601911657162011-05-28T07:41:00.001-05:002011-05-28T07:41:56.554-05:00Timing Outlook Hanging in There, Barely Positive<strong>1. Summary</strong><br />
<br />
The S&P 500 closed last week down about 1% from the last Timing Outlook report two weeks ago. The index is now at 1331. All of the indicators stayed the same, except for The Conference Board’s Index of Leading Economic Indicators, which declined after 9 consecutive monthly increases. This shaves another half point off the Timing Outlook, lowering it to 7.5. That is still in positive territory. <em>(Click chart to enlarge.)</em><br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj60Y2hTr2wOa7IF7PY2nLsfqJhuFrUPyDZp1rGqn67n6q_na53CCQo-XSv3tjnrpDqd3670P4qOZ2GAuOagYEEclNdzZhMkXgeTcO18G6kFldPZZ4K0r6qx9vQant07bhOwIdOiANb8cw/s1600/sc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="242" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj60Y2hTr2wOa7IF7PY2nLsfqJhuFrUPyDZp1rGqn67n6q_na53CCQo-XSv3tjnrpDqd3670P4qOZ2GAuOagYEEclNdzZhMkXgeTcO18G6kFldPZZ4K0r6qx9vQant07bhOwIdOiANb8cw/s320/sc.png" t8="true" width="320" /></a></div><br />
In the chart above, you can see that the S&P 500 is just a little above where it was three months ago, but that it fell about 2% in May. The old “sell in May and go away” aphorism looks like good advice right now, but that could change by Halloween, which by tradition is when one is supposed to re-enter the market. The market is up 6% for the year.<br />
<br />
I continue to remain 100% invested in SPY (an ETF that tracks the S&P 500) in my <a href="http://www.sensiblestocks.com/portfolio-capitalgains.html"><strong>Capital Gains Portfolio</strong></a>. The holding is protected to the downside with a trailing 6% sell-stop that applies to all shares. The stop sits now about 4% below Friday’s close.<br />
<br />
My <a href="http://www.sensiblestocks.com/portfolio-dividend.html"><strong>Dividend Growth Portfolio</strong></a> remains 100% invested except for accumulating dividends waiting to be invested. I reinvest dividends when they accumulate to $1000, and the total right now is just less than that, so I anticipate making a purchase in June after one or two more dividend payments are received. I love reinvesting dividends, because the inevitable result is that the dividend stream increases: More shares, more dividends. The increase in the dividend stream means that the yield on my original cost ($40,000) goes up. That’s the math of dividend-growth investing in a nutshell. <br />
<br />
If you would like to learn more about dividend-growth investing—building wealth slowly or creating an ever-growing dividend stream that stays ahead of inflation—check out this page: <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">TOP 40 DIVIDEND STOCKS FOR 2011: How to Generate Wealth or Income from Dividend-Growth Stocks</a></em></strong>. <br />
<br />
<strong>2. Market Performance Since Last Outlook</strong><br />
(“now” figures are as of close Friday, May 27, 2011)<br />
<br />
Last Outlook (5/15/11): 8.0 (positive)<br />
<br />
S&P 500 last time (5/15/11): 1338<br />
S&P 500 now: 1331 Change: -1%<br />
<br />
S&P 500 at beginning of 2011: 1258 <br />
S&P 500 now: 1331 Change in 2011: +6%<br />
<br />
S&P 500 at close 3/9/09 (beginning of bull market): 677 <br />
S&P 500 now: 1331 Change since 3/9/09: +97% (in about 27 months)<br />
<br />
<strong>3. Indicators in Detail</strong><br />
<br />
• Conference Board Index of Leading Economic Indicators: After 9 consecutive monthly increases, the report on May 19 showed a decline in this indicator. That lowers it from positive to neutral. I require three straight increases or declines to rate this indicator as positive or negative, otherwise it is ambiguous and therefore neutral. +5<br />
<br />
• Fed Funds Rate: No change at 0% to 0.25%. More attention is now being paid to the scheduled June termination of “QE2”—the Fed’s $600 B program of purchasing Treasury bonds. Some speculate that the Fed will be forced to start a QE3 program to help the still-sluggish economy along, but the majority seem to believe that the Fed will stop QE on schedule. Positive. +10<br />
<br />
• S&P 500 Market Valuation (P/E): Morningstar’s operating P/E of the S&P 500 remains at 16.4. They do not seem to be recalculating this number as often as they used to. But the value is well within the positive range of being <17.3. Positive. +10<br />
<br />
• Morningstar’s Market Valuation Graph. Morningstar’s proprietary market valuation graph is 1.00, down from 1.02 last time. That makes it exactly neutral, which it has been for well over a year. +5<br />
<br />
• S&P 500 Short Term Technical Trend: The market’s downward tilt in May has it flirting with its 50-day simple moving average (SMA) and has taken it below its 20-day SMA. So the configuration is 20-day > Index > 50-day. If the market falls below its 50-day SMA, which it did earlier this week only to climb back up, this indicator will turn negative. Right now it’s neutral. +5 <br />
<br />
• S&P 500 Medium Term Technical Trend: This indicator remains positive, but just slightly as the S&P 500 index is barely over its 50-day SMA. The configuration is Index > 50-day SMA > 200-day SMA. +10<br />
<br />
• DJIA Short Term Technical Trend: The Dow’s configuration is the same as the S&P 500’s. Neutral. +5.<br />
<br />
• DJIA Medium Term Technical Trend: Same as the S&P 500 chart. Positive. +10<br />
<br />
• NASDAQ Short Term Technical Trend: Same as the other two. Neutral. +5<br />
<br />
• NASDAQ Medium Term Technical Trend: Same as the other two. Positive. +10<br />
<br />
<strong>TOTAL POINTS: 75</strong><br />
<strong>NEW READING: 75 / 10 = 7.5 = POSITIVE</strong>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-90793134364297803912011-05-15T19:31:00.002-05:002011-05-15T19:33:50.718-05:00Timing Outlook Still Positive at 8.0 as Market Meanders<strong>1. Summary</strong><br />
<br />
The S&P 500 closed last week down about 2% from the last Timing Outlook report two weeks ago. The downward move pulled all three short-term momentum indicators into neutral territory, lowering the Timing Outlook to 8.0. That is still in positive territory.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe6G5KgpRSL3xlE9r7cGGRYP1KoocuGPFrlDc1QDCXNzparfT22UTu86s1NGH6nOknaitSbjmxSP2hpXcNNRzqYQY9KRUho_EiXGblwi-PVtCymNRF0kJW6gO6UlypteJq1_xcGnG88eI/s1600/sc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="142" j8="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe6G5KgpRSL3xlE9r7cGGRYP1KoocuGPFrlDc1QDCXNzparfT22UTu86s1NGH6nOknaitSbjmxSP2hpXcNNRzqYQY9KRUho_EiXGblwi-PVtCymNRF0kJW6gO6UlypteJq1_xcGnG88eI/s320/sc.png" width="320" /></a></div><br />
If you were to place a ruler on this chart connecting the bottom edge of the March 16 low of 1257 to the bottom edge of Friday’s close at 1338, you would have a line sloping upward 6% in about 2 months. That is the upward trend reflected by the positive Timing Outlook. However, if you follow the rolling terrain day by day, it’s a little like climbing a mountain. Overall you are going up, but there are peaks and dips along the way. A pattern like this is called “higher highs and higher lows.”<br />
<br />
As I’ve often stated in the past, I think the market is news-driven. What’s in the news? Steep gasoline prices impact everybody as individuals and the costs of doing business for most corporations. Prices paid by producers and consumers are rising at their fastest 12-month clip in more than two years. Economists are thus keeping a sharp eye on inflation. If “core” inflation (excluding food and fuel costs) begins to climb upward, the Fed, whose job it is to control inflation, will need inevitably to raise interest rates. The last statement from the Fed a couple of weeks ago suggested that they did not see any rate-raising for a couple of meetings (about 7 weeks), if then. Rate increases are not usually good for the market, except initially they can have a positive impact if investors see them as confirmation that the economy is improving enough that the Fed needs to slow it down a little.<br />
<br />
As it is, the Fed is about to end its “quantitative easing” program in June. Some pundits refer to QE as the punchbowl that has fueled the last several months of the stocks market’s performance. Earnings season is just about over, and it was good but not great. The overall “beat rate” of companies reporting earnings fell to just a little over its historical average of 62%. With earnings season ending, attention will turn to other news. <br />
<br />
We are also entering the “sell in May and go away” months, the dog days of summer, when the market has historically performed its worst. Let’s hope for some good news to tide us over to the next earnings season, which starts in July, and that the news from that season is good.<br />
<br />
I continue to remain 100% invested in SPY (an ETF that tracks the S&P 500) in my <a href="http://www.sensiblestocks.com/portfolio-capitalgains.html">Capital Gains Portfolio</a>. The holding is protected to the downside with a 6% sell-stop that applies to all shares. Since the stop moves up when the market moves up but stays put when the market moves down, it is actually sitting about 4% below Friday’s close. As long as we continue to get higher highs and higher lows, it won’t get triggered.<br />
<br />
On the dividend-investing side, my <a href="http://www.sensiblestocks.com/portfolio-dividend.html">Dividend Growth Portfolio</a> remains 100% invested, as it always is (except for accumulating dividends waiting to be invested), because the focus is on building the dividend stream, not on capital gains.Since last time, one stock in the portfolio announced a dividend increase: Pepsico raised their dividend by about 7%. <br />
<br />
If you would like to learn more about dividend-growth investing—building wealth slowly or creating an ever-growing dividend stream that stays ahead of inflation—take a look at <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">TOP 40 DIVIDEND STOCKS FOR 2011: How to Generate Wealth or Income from Dividend-Growth Stocks</a></em></strong>. <br />
<br />
<strong>2. Market Performance Since Last Outlook</strong><br />
(“now” figures are as of close Friday, May 13, 2011)<br />
<br />
Last Outlook (4/29/11): 9.5 (positive)<br />
S&P 500 last time (4/29/11): 1364<br />
S&P 500 now: 1338 Change: -2%<br />
<br />
S&P 500 at beginning of 2011: 1258 <br />
S&P 500 now: 1338 Change in 2011: +6%<br />
<br />
S&P 500 at close 3/9/09 (beginning of bull market): 677 <br />
S&P 500 now: 1338 Change since 3/9/09: +98% (in about 26 months)<br />
<br />
<strong>3. Indicators in Detail</strong><br />
<br />
• Conference Board Index of Leading Economic Indicators: No new report since last time. This indicator has increased 9 months in a row. Positive. +10<br />
<br />
• Fed Funds Rate: No change at 0% to 0.25%. The Fed remains committed to a loose money policy until the economy is well into recovery or they become concerned with inflation. Attention is now starting to turn to what the market’s reaction will be at the end of June. That is when “QE2”—the Fed’s $600 B program of purchasing Treasury bonds—will end. While not a rate hike per se, it does mean that the stimulative effect of the Fed being an active bidder for US bonds will come to an end, and that probably will be seen as the first step in the Fed’s tightening process that practically everyone thinks is coming as inflationary pressures seep back into the economy. Positive. +10<br />
<br />
• S&P 500 Market Valuation (P/E): Morningstar’s “stuck” operating P/E of the S&P 500 has become unstuck, currently reading 16.4, up from 16.1. This slight increase does not move the needle on this indicator, because it is still well below the lower edge of the 17.3 – 21.1 neutral range. Positive. +10<br />
<br />
• Morningstar’s Market Valuation Graph. Morningstar’s proprietary market valuation graph is 1.02, down from 1.05 last time. Any value within +/- 10% of 1.00 is neutral. This indicator has not strayed outside that neutral range for over a year, despite the market’s considerable increase in value over that time. The reason is the simultaneous growth in corporate earnings. +5<br />
<br />
• S&P 500 Short Term Technical Trend: The short-term technical trends keep bouncing from positive to neutral and back as the market meanders up and down. The market’s decline on Friday took the S&P 500 index value below its own 20-day simple moving average (SMA). The day before, it had been above it. Whereas last time I reported that the S&P 500 had traded up on 10 of the last 12 trading sessions, as of Friday it has traded down on 6 of the last 10 sessions. The index is now just below its 20-day SMA. So the configuration has moved from a positive Index > 20-day > 50-day last time to a neutral 20-day > Index > 50-day this time. +5 <br />
<br />
• S&P 500 Medium Term Technical Trend: No change from last time: Index > 50-day SMA > 200-day SMA. This configuration is the most positive you can have. +10<br />
<br />
• DJIA Short Term Technical Trend: The Dow’s configuration is the same as the S&P 500’s. Neutral. +5.<br />
<br />
• DJIA Medium Term Technical Trend: Same as the S&P 500 chart. Positive. +10<br />
<br />
• NASDAQ Short Term Technical Trend: The volatile NASDAQ finished Friday just slightly below its 20-day SMA, dropping this indicator to neutral along with the other two short-term trend indicators. +5<br />
<br />
• NASDAQ Medium Term Technical Trend: Same as the other two. Positive. +10<br />
<br />
<strong>TOTAL POINTS: 80</strong><br />
<strong>NEW READING: 80 / 10 = 8.0 = POSITIVE</strong>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-91752027439477268492011-05-10T07:27:00.001-05:002011-05-10T07:28:25.078-05:00Who's Who of Wall StreetAn organization called Wall Street Economists has published the results of a research project on influential persons and opinion leaders. As announced in a news release dated May 04, 2011, yours truly made the list. According to Wall Street Economists, their researchers spent hundreds of hours analyzing the most important news stories, articles, interviews, and blog posts about the financial crisis and its impact on Wall Street.<br />
<br />
My name appeared on the list in a category of Top Wall Street Experts and Opinion Leaders.<br />
<br />
I don't think of myself as working "on" Wall Street, but I am certainly part of the investment industry. Many of the things I write about--like market timing and dividend-growth investing--are anti-Wall Street in the sense of going opposite to much mainstream thinking. But it is nice to be recognized as an opinion leader.Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-81923230590407121352011-05-01T17:57:00.002-05:002011-05-01T18:06:17.445-05:00Market Breaks Out of Trading Range, Timing Outlook Remains at 9.5<strong>1. Summary</strong><br />
<br />
The S&P 500 closed the week up 2% at a level not seen in two years. The index is now 101% above the March 9, 2009 low. In other words, it has more than doubled on price alone. The index has now climbed to within 13% of its all-time high of October 9, 2007. In the past few days, the S&P 500 broke out of a trading range that it had been in for more than three months.<br />
<br />
Here is an interesting chart from <a href="http://seekingalpha.com/author/doug-short?source=search_general&s=doug-short">Doug Short</a>, who creates great market graphics in his articles on <em>Seeking Alpha</em>. (Click the chart to enlarge it.) It’s good to get a long-term perspective sometimes.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWBi-mCgsRGeKJ5whyWcmXZlKkm21oHx2Fy8PaD4Ck0ziPdEsI3oWQ6MwLSC-kS8DdEXGvub4il7HX9iUIBv0JUTV80K9cBnVqbN-MeubRzzvNPKy7D_khVTwGBbfeHfTrnl-8EeP35Z4/s1600/market+doubles+doug+short.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="232" j8="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWBi-mCgsRGeKJ5whyWcmXZlKkm21oHx2Fy8PaD4Ck0ziPdEsI3oWQ6MwLSC-kS8DdEXGvub4il7HX9iUIBv0JUTV80K9cBnVqbN-MeubRzzvNPKy7D_khVTwGBbfeHfTrnl-8EeP35Z4/s320/market+doubles+doug+short.png" width="320" /></a></div><br />
In this chart, the red area depicts a 20% decline from that all-time high—the usual definition of a bear market is a 20% decline from a recent high. We can see that that point (-20%) was reached in July, 2008, and the market stayed in the red zone until January of this year. Of course, what we’ve had since the all-time high is two distinct market trends. First a bear market pulled the S&P 500 down almost 57% by March 9, 2009 (17 months), then a bull market has pulled the market back up more than 100% by last Friday (26 months). By all appearances, the bull market trend is still intact.<br />
<br />
Earnings season is in full swing. The “beat rate” is running around 70% so far, compared to a historical average of about 62%. The good earnings reports seem to be the major factor influencing investor behavior, with the market advancing steadily almost daily for the past couple of weeks. There was one nasty day (right after the last Timing Outlook) when S&P issued a “negative outlook” on the long-term credit situation in the USA, but the market bounced back almost immediately from that. With the steady rise in the past couple of weeks, I have invested the last 25% back into SPY (an ETF that tracks the S&P 500) in my <strong><a href="http://www.sensiblestocks.com/portfolio-capitalgains.html">Capital Gains Portfolio</a></strong>, which is now 100% invested again. The holding is protected to the downside with a 6% sell-stop that applies to all shares.<br />
<br />
On the dividend-investing side, where the focus is on creating an ever-increasing stream of dividends rather than accumulating capital, I made a couple of changes to my <strong><a href="http://www.sensiblestocks.com/portfolio-dividend.html">Dividend Growth Portfolio</a></strong> as the result of an overdue Portfolio Review. With the changes, the portfolio’s yield on cost has now reached 5.1%. If you’d like to read an article about the Portfolio Review, go here: “<strong><a href="http://seekingalpha.com/article/265396-dividend-growth-portfolio-review-sherwin-williams-is-out">Dividend Growth Portfolio Review: Sherwin Williams is Out</a></strong>.” Since last time three more stocks in the DG Portfolio have announced dividend increases: Chevron 8%, Johnson & Johnson 6%, and Procter & Gamble 9%.<br />
<br />
If you would like to learn more about getting wealthy slowly through dividend-growth investing, take a look at <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">TOP 40 DIVIDEND STOCKS FOR 2011: How to Generate Wealth or Income from Dividend-Growth Stocks</a></em></strong>. <br />
<br />
<strong>2. Market Performance Since Last Outlook</strong><br />
(“now” figures are as of close Friday, April 29, 2011)<br />
<br />
Last Outlook (4/15/11): 9.5 (positive)<br />
S&P 500 last time (4/15/11): 1320<br />
S&P 500 now: 1364 Change: +3%<br />
<br />
S&P 500 at beginning of 2011: 1258 <br />
S&P 500 now: 1364 Change in 2011: +8%<br />
<br />
S&P 500 at close 3/9/09 (beginning of bull market): 677 <br />
S&P 500 now: 1364 Change since 3/9/09: +101% (in about 26 months)<br />
<br />
<strong>3. Indicators in Detail</strong><br />
<br />
• Conference Board Index of Leading Economic Indicators: New report April 21 increased marginally, bringing the streak to 9 monthly increases in a row. Positive. +10<br />
<br />
• Fed Funds Rate: No change at 0% to 0.25%. The Fed is clearly committed to a loose money policy until the economy is well into recovery or they become concerned with inflation. Ben Bernanke, in his press conference last week, said that he does not see any rate tightening for at least two more Fed meetings (about 4 months). Note that at the end of June, “QE2”—the Fed’s $600 B program of purchasing Treasury bonds—will end. While not a rate hike, this will have the effect of tightening up the money supply as time goes on and may lead to bond-market and mortgage interest rates rising. Positive. +10<br />
<br />
• S&P 500 Market Valuation (P/E): Morningstar pegs the current operating P/E of the S&P 500 at 16.1. This marks four readings in a row at that level, which makes me think that Morningstar has an error in its system. The computed number usually changes more frequently. However, since that number is well below the lower edge of the 17.3 – 21.1 neutral range, I will still consider this indicator positive while I look into the matter. +10<br />
<br />
• Morningstar’s Market Valuation Graph. Morningstar’s proprietary market valuation graph is 1.05, up from 1.03 last time. Any value within +/- 10% of 1.00 is neutral. The indicator has not strayed outside that neutral range for over a year, despite the market’s considerable increase in value over that time. The reason is the simultaneous growth in corporate earnings. +5<br />
<br />
<span style="font-family: "Times New Roman"; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-font-size: 10.0pt; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><strong>• </strong></span>S&P 500 Short Term Technical Trend<strong>:</strong> After the one-day drop just after the last Timing Outlook, the market has risen steadily. The S&P 500 has traded up on 10 of the last 12 trading sessions. The index has distanced itself from its 20-day simple moving average (SMA), which has also put some distance between itself and the 50-day SMA. This configuration of Index > 20-day > 50-day is the most positive lineup. <span style="font-family: "Times New Roman"; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-font-size: 10.0pt; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">+10<strong> </strong></span><br />
<br />
• S&P 500 Medium Term Technical Trend: Index > 50-day SMA > 200-day SMA. This configuration is the same as last time and is also the most positive you can have. +10<br />
<br />
• DJIA Short Term Technical Trend: The Dow’s configuration is the same as the S&P 500’s. Positive. +10.<br />
<br />
• DJIA Medium Term Technical Trend: Same as the S&P 500 chart. Positive. +10<br />
<br />
• NASDAQ Short Term Technical Trend: The NASDAQ is always more volatile than the other two indexes. For a brief time, the 20-day SMA had dropped below the 50-day. But that condition reversed itself on April 15, and the configuration is now the same as the other two short-term indicators. Positive. +10<br />
<br />
• NASDAQ Medium Term Technical Trend: Same as the other two. Positive. +10<br />
<br />
<strong>TOTAL POINTS: 95</strong><br />
<strong>NEW READING: 95 / 10 = 9.5 = POSITIVE</strong>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-31835997958872100502011-04-29T08:35:00.001-05:002011-04-29T08:36:25.657-05:00Four New Articles on Seeking AlphaIn the past couple of weeks, I have posted these articles on <strong><em>Seeking Alpha. </em></strong>Use the article title to link directly to any of the articles.<br />
<br />
<strong><a href="http://seekingalpha.com/article/263213-dividends-in-danger-readers-discuss-sysco-hudson-city-pitney-bowes-and-more">Dividends in Danger?</a> </strong>This is a monthly series in which stocks that might have dividends at risk are discussed. One of the stocks examined in the first article (Hudson City Bancorp) did, in fact, cut its dividend a couple of weeks later. The articles have proved very popular, and they draw lots of comments and suggestions for stocks to consider.<br />
<br />
<a href="http://seekingalpha.com/article/263775-the-5-year-rule-in-dividend-growth-investing"><strong>The Five-Year Rule in Dividend-Growth Investing</strong></a><strong>. </strong>This article received Editors Pick recognition. It discuses a rule that I follow in dividend-growth investing: The five-year rule. Simply stated, I will not consider a stock that has not compiled a record of at least five consecutive years of dividend growth. I explain why I use the rule and discuss several stocks that fall on one side or the other of the dividing line, including big banks and technology companies. I nominate two stocks as Dividend Champions of the future. Go to the article to see who they are.<br />
<br />
<a href="http://seekingalpha.com/article/264513-periodic-table-of-dividend-champions-new-and-improved"><strong>Periodic Table of Dividend Champions--New and Improved</strong></a><strong>.</strong> Dividend Champions are stocks that have raised their dividends for at least 25 consecuttive years. Believe it or not, there are 100 such stocks. The Periodic Table arranges them visually by their current yields and dividend growth rates. It is a quick way to identify interesting dividend-growth stock ideas.<br />
<br />
<a href="http://seekingalpha.com/article/265396-dividend-growth-portfolio-review-sherwin-williams-is-out"><strong>Dividend Growth Portfolio Revew: Sherwin Williams is Out</strong></a><strong>. </strong>I recently completed a review of my <a href="http://www.sensiblestocks.com/portfolio-dividend.html">Dividend Growth Portfolio</a> and decided to sell Sherwin Willliams and replace it with two other stocks. This article explains the Portfolio Review process and why I reached the specific decision about Sherwin Williams. (In a nutshell, their dividend growth rate slowed to a crawl.)Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-1486733249206608572011-04-18T15:57:00.002-05:002011-04-18T17:10:35.044-05:00Timing Outlook Drops After Bad Day on Wall StreetWell, it only took one day. I felt that I should let you all know that today's little stock-market slide, following S&P's "negative outlook" on U.S. debt, took all three of the short-term trend indicators from positive yesterday to neutral today.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvWDzjoux2rms4vt-FdRQ3bdADVHJ7LSZ4jzsX8z7ehDliJxU_QumJ20qYGkUfKAIGVfmlyaSfEmcnOBT40GlE_jOz6bl0Xk0JoK0rAtuznb-PjzA5XP5h9T2Pd7Uryt4FFfsPM4QZLOo/s1600/sc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="142" r6="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvWDzjoux2rms4vt-FdRQ3bdADVHJ7LSZ4jzsX8z7ehDliJxU_QumJ20qYGkUfKAIGVfmlyaSfEmcnOBT40GlE_jOz6bl0Xk0JoK0rAtuznb-PjzA5XP5h9T2Pd7Uryt4FFfsPM4QZLOo/s320/sc.png" width="320" /></a></div>I have reproduced here a single-month graph of the S&P 500 so that you can see clearly how close the 20-day (green) and 50-day (blue) simple moving averages are to the index level itself. Whereas yesterday they lined up Index > 20-day > 50-day, tonight they are 20-day >50-day (by a whisker) > Index. That means they are jumbled and ambiguous. The NASDAQ and Dow charts look more or less the same, meaning that all three short-term trend indicators fall from positive to neutral. That pulls the entire Timing Outlook down by 1.5 points, bringing it to 8.0.<br />
<br />
That's still positive, but as you can see, another bad day or two could quickly pull the 20-day SMA (which reacts fairly quickly) below the 50-day SMA, which would make the configuration 50-day > 20-day > Index, which is upside down from what you want. That would lop another 1.5 points off the Timing Outlook.<br />
<br />
This is S&P's own summary of its press release today. I'm sure discussion of this will be all over the news tonight and that the status of U.S. budget and debt-ceiling negotiations will be at the top of a lot of agendas for the next few weeks and months.<br />
<br />
<blockquote></blockquote><blockquote>•We have affirmed our 'AAA/A-1+' sovereign credit ratings on the United States of America.<br />
•The economy of the U.S. is flexible and highly diversified, the country's effective monetary policies have supported output growth while containing inflationary pressures, and a consistent global preference for the U.S. dollar over all other currencies gives the country unique external liquidity.<br />
•Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.<br />
•We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful <br />
implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns.</blockquote>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-76047515961962241262011-04-17T17:36:00.001-05:002011-04-17T17:40:10.965-05:00Timing Outlook: If There’s Such a Thing as a Weak 9.5, This Is It<strong>1. Summary</strong><br />
<br />
<strong>The Timing Outlook has improved from 8.0 to 9.5, or strongly positive.</strong> That’s on the numerical scale. From a subjective point of view, this has to be the weakest, least-inspiring 9.5 I have ever seen. All three short-term technical indicators are just barely positive. If we have a couple of down days, they could turn neutral or even negative in a heartbeat. That would drop the Timing Outlook from 9.5 to 6.5.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFuJLe-h-Cz6AMDT3B6MCOYZ6MFPtqWCSykwbk9qaOXE2k323SKuJkj4XcMV32ai5O3z1CaRwhDBs3YaxpB0Qx3zi4frzgtGTXwX5wYFEQpVKzvk6afs68PkiuxwMVWvZHrIgi-_RqBkE/s1600/sc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="142" r6="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFuJLe-h-Cz6AMDT3B6MCOYZ6MFPtqWCSykwbk9qaOXE2k323SKuJkj4XcMV32ai5O3z1CaRwhDBs3YaxpB0Qx3zi4frzgtGTXwX5wYFEQpVKzvk6afs68PkiuxwMVWvZHrIgi-_RqBkE/s320/sc.png" width="320" /></a></div><br />
<strong>The market has been moving up and down within a range of about 80 points on the S&P 500 for around 3 months.</strong> On the 3-month graph (above, click to enlarge), this looks like volatility. Indeed, the volatility was enough to take me out of the market via a 5.5% sell-stop. Then it was enough in the other direction to get me 75% back into the market in my <a href="http://www.sensiblestocks.com/portfolio-capitalgains.html"><strong>Capital Gains Portfolio</strong></a>. All I am buying these days is SPY, an ETF that tracks the S&P 500. I am currently protecting to the downside with a 6% sell-stop that applies to all shares.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjthu4XvNij0ThHg8efH8YQi3hWFfwnfi99IPWxXXQwoWcPFFQI0wSA4UooKdMRVt6NKfJ7TVqzmCoFa6-9RlBknEFb5IUtMnM6z-M_dEhpYUuDUYikiH23xm2Nf6PQA0D2e4KFfEUoV4U/s1600/sc-bull+market.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="142" r6="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjthu4XvNij0ThHg8efH8YQi3hWFfwnfi99IPWxXXQwoWcPFFQI0wSA4UooKdMRVt6NKfJ7TVqzmCoFa6-9RlBknEFb5IUtMnM6z-M_dEhpYUuDUYikiH23xm2Nf6PQA0D2e4KFfEUoV4U/s320/sc-bull+market.png" width="320" /></a></div><br />
<strong>On the 2-year long-range graph, it looks like we are in a sideways market.</strong> Indeed, Friday’s trading (April 15) was around the same area as on March 29, March 7, March 3, March 1, February 25, February 22, February 10-11, and February 7-8. Since the last report, the market has gone up on 7 days and down on 6.<br />
<br />
<strong>In the coming few weeks, earnings season will be in full swing.</strong> Major companies reporting this coming week include Johnson & Johnson and GE. S&P estimates that Q1 earnings will be up 13% from Q1 2010. The earnings news will compete for attention with macro events, such as the nuclear situation in Japan, Middle East developments, European sovereign debt, the looming end to the Fed’s stimulus program known as “quantitative easing” or QE2, struggles over the federal budget and debt ceiling, continuing high unemployment, and the general impact on consumer spending of high oil prices. Life being what it is, the major story will probably be something other than what I have just listed.<br />
<br />
<strong>Life is more relaxed in dividend-growth investing</strong>, where the focus is on creating an ever-increasing stream of dividends. My <strong><a href="http://www.sensiblestocks.com/portfolio-dividend.html">Dividend Growth Portfolio</a></strong> always remains 100% invested except for dividends that I am accumulating to purchase more shares. So far in 2011, several stocks in the portfolio have already announced dividend increases: Abbott Labs (9%), Alliant Energy (8%), AT&T (2%), Kinder Morgan Energy Partners (2% so far—they may increase more than once this year), Realty Income (<1% so far, they will increase each quarter), and Sherwin-Williams (1%). I am overdue to give this portfolio its semi-annual Portfolio Review. If you want to learn more about getting wealthy slowly through dividend-growth investing, take a look at <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">TOP 40 DIVIDEND STOCKS FOR 2011: How to Generate Wealth or Income from Dividend-Growth Stocks.</a></em></strong><br />
<br />
<strong>2. Market Performance Since Last Outlook</strong><br />
(“now” figures are as of close Friday, April 15, 2011)<br />
<br />
Last Outlook (3/29/11): 8.0 (positive)<br />
<br />
S&P 500 last time (3/29/11): 1319<br />
S&P 500 now: 1320 Change: +0%<br />
<br />
S&P 500 at beginning of 2011: 1258 <br />
S&P 500 now: 1320 Change in 2011: +5%<br />
<br />
S&P 500 at close 3/9/09 (beginning of bull market): 677 <br />
S&P 500 now: 1320 Change since 3/9/09: +95% (in about 25 months)<br />
<br />
<strong>3. Indicators in Detail</strong><br />
<br />
• Conference Board Index of Leading Economic Indicators: No new report since last time. The streak stands at 8 monthly increases in a row. Positive. +10<br />
<br />
• Fed Funds Rate: No change at 0% to 0.25%. The Fed continues to be clearly committed to a loose money policy until the economy is well into recovery or they become concerned with inflation. Positive. +10<br />
<br />
• S&P 500 Market Valuation (P/E): Morningstar pegs the current operating P/E of the S&P 500 at 16.1. This marks three readings in a row at that level, which is well below the lower edge of the 17.3 – 21.1 neutral range. Positive. +10<br />
<br />
• Morningstar’s Market Valuation Graph. Morningstar’s proprietary market valuation graph is 1.03, same as last time. Any value within +/- 10% of 1.00 is neutral. +5<br />
<br />
• S&P 500 Short Term Technical Trend: The market’s swings back and forth have brought this indicator to positive. Barely. The close Friday was just slightly above the 20-day simple moving average (SMA), which is just above the 50-day SMA. All three are so close that they are practically touching. Nevertheless, the configuration of Index > 20-day >50-day is the most positive lineup. +10 <br />
<br />
• S&P 500 Medium Term Technical Trend: Index > 50-day SMA > 200-day SMA. This configuration is the same as last time. Positive. +10<br />
<br />
• DJIA Short Term Technical Trend: The Dow’s configuration is the same as the S&P 500’s. Positive. +10.<br />
<br />
• DJIA Medium Term Technical Trend: Same as the S&P 500 chart. Positive. +10<br />
<br />
• NASDAQ Short Term Technical Trend: On the NASDAQ’s chart, the index, 20-day SMA, and 50-day SMA literally are touching—both SMAs are within the small range that the index traded within on Friday. But when you look really close, the configuration is the same as the other two indicators. Positive. +10<br />
<br />
• NASDAQ Medium Term Technical Trend: Same as the other two. Positive. +10<br />
<br />
<strong>TOTAL POINTS: 95</strong><br />
<strong>NEW READING: 95 / 10 = 9.5 = POSITIVE</strong><br />
<strong><br />
</strong>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-24845383105024860062011-04-11T08:06:00.000-05:002011-04-11T08:06:59.262-05:00Three New Articles (and Comments) Available on Seeking AlphaIn the past couple of weeks, I have posted the folowing articles on <em>Seeking Alpha. </em>The comment streams have been lively and informative:<br />
<ul><li><strong><a href="http://seekingalpha.com/article/259815-portrait-of-a-beautiful-dividend-growth-stock">Portrait of a Beautiful Dividend Growth Stock</a>. </strong>This article identifies the 10 stocks that have made my <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">Top 40 Dividend Growth Stocks</a></em></strong> list every year since I began publishing it (2008-2011). It takes common characteristics from those 10 stocks to form a "portrait" of what a great dividend-growth stock looks like. The article generated 89 comments.</li>
<li><a href="http://seekingalpha.com/article/260104-dividends-in-danger-worries-about-sysco-hudson-city-pitney-bowes"><strong>Dividends in Danger?</strong></a> This article is the first in a monthly series that will compile <em>Seeking Alpha's</em> readers' ideas and comments about companies whose dividends may be in danger of being frozen or cut. Companies discussed in the first article include Sysco, Hudson City Bancorp, and Pitney-Bowes. The article has generated 142 comments. The second article in the series will appear later this week.</li>
<li><a href="http://seekingalpha.com/article/261754-10-by-10-the-interaction-of-dividend-yield-and-growth"><strong>10 by 10: The Interaction of Dividend Yield and Growth</strong></a><strong>. </strong>This is an update and expansion of one of the most popular articles I have ever published. It discusses what combinations of yield and dividend growth rates (DGR) will lead to achiving the "10 by 10" goal": Delivering a yield on cost of at least 10% within 10 years. The article achieved "Editors Pick" status on <em>Seeking Alpha.</em> The original article's contents have been expanded to include a table showing how many years it takes to double your dividend stream at various DGRs, plus another table that illustrates how many years it takes a stock with low yield + high DGR to surpass the income stream of another stock that starts out with a hgher initial yield. The article has received 130 comments so far.</li>
</ul>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.comtag:blogger.com,1999:blog-1114765508399843744.post-33188703692017097102011-03-30T10:01:00.001-05:002011-03-30T10:02:28.040-05:00Timing Outlook Strengthens a Little, Remains Positive<strong>1. Summary</strong><br />
<br />
<strong>The Timing Outlook has improved from 7.5 to 8.0, remaining in positive territory.</strong><br />
<br />
On February 22, the market began a fairly steady and quick descent, fueled by such things as the unrest in Northern Africa and the Middle East, which sparked concern about oil prices among other things. The market declined about 6% in 17 trading days. That was enough to take me completely out of the market in my <a href="http://www.sensiblestocks.com/portfolio-capitalgains.html">Capital Gains Portfolio</a>, where I was using 5.5% sell stops. (Click this image to enlarge it.)<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRizkKcBLjKFLwchPWBiVOCkrIO8RVZ99rE0obgCR6uG6eUiJhs0KjutYZV36XAX4IEWA72p4PhHFT2ICHKnlu_oVXyoMHsSWkhq5WDl0XZMbG-jF8Zzaac0Z7SvW-EfdpAs2VQo9y4lc/s1600/sc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="142" r6="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRizkKcBLjKFLwchPWBiVOCkrIO8RVZ99rE0obgCR6uG6eUiJhs0KjutYZV36XAX4IEWA72p4PhHFT2ICHKnlu_oVXyoMHsSWkhq5WDl0XZMbG-jF8Zzaac0Z7SvW-EfdpAs2VQo9y4lc/s320/sc.png" width="320" /></a></div><br />
You can’t win them all. Practically the very day that the sell stops were hit, the market reversed itself, for no apparent reason other than what is being called “remarkable resiliency.” In the last 10 trading sessions, it has recovered about two-thirds of its loss. I did not participate in that recovery, because I was in cash. If my stops had been just a little wider, I never would have been stopped out.<br />
<br />
Does that make me question my approach? I always question my approach. It does not make me doubt the overall strategy of timing and surfing trends. It doesn’t even make me reconsider using sell stops, even though had I just relied on the Timing Outlook, which stayed positive the whole time, I would not have sold. <strong>I remain convinced that avoiding big losses is key to investing for capital gains.</strong><br />
<br />
<strong>But the width of the stops is always open for debate</strong>. A few years ago, I commonly used 15% stops as my default. For whatever reason—probably the severity of the 2008 crash—I have lately used much narrower ones. The slow steady nature of the bull market that began in March, 2009, made narrow stops easy to use. They only got hit twice; this was the third time. So, even though in the short term I lost 5.5% here, over the long term, big-loss avoidance (like the 50%+ losses that many suffered in 2008) has kept this portfolio well above the market itself. <br />
<br />
I re-entered the market this morning by using 25% of my cash to purchase SPY, the ETF that tracks the S&P 500. If the market keeps going up, I will continue to make purchases until I am all-in again. I may widen my stops a little, I haven't decided yet.<br />
<br />
The end of March is tomorrow, which means that another earnings season will soon be upon us. The market usually gets more volatile during earnings season. The year-over-year comparisons for the quarter just ending are getting harder, since companies were well into their recovery by this time last year. Hopefully, companies will generally report improving earnings, enough to fuel a continuation of the uptrend that began short-term a couple of weeks ago, but that began long-term two years ago.<br />
<br />
<strong>As you know, the focus in dividend-growth investing is not on capital gains, it is on creating an ever-increasing stream of dividends.</strong> So my Dividend Growth Portfolio always remains 100% invested. If you want to learn more about getting wealthy slowly through dividend-growth investing, take a look at <strong><em><a href="http://www.sensiblestocks.com/dividendtop40description.html">TOP 40 DIVIDEND STOCKS FOR 2011: How to Generate Wealth or Income from Dividend-Growth Stocks</a></em></strong>. Check out my Dividend Growth Portfolio’s performance by <a href="http://www.sensiblestocks.com/portfolio-dividend.html">clicking here</a>.<br />
<br />
<strong>2. Market Performance Since Last Outlook</strong><br />
(“now” figures are as of close Tuesday, March 29, 2011)<br />
<br />
Last Outlook (3/11/11): 7.5 (positive)<br />
S&P 500 last time (3/11/11): 1304<br />
S&P 500 now: 1319 Change: +1%<br />
<br />
S&P 500 at beginning of 2011: 1258 <br />
S&P 500 now: 1319 Change in 2011: +5%<br />
<br />
S&P 500 at close 3/9/09 (beginning of bull market): 677 <br />
S&P 500 now: 1319 Change since 3/9/09: +95% (in about 24 months)<br />
<br />
<strong>3. Indicators in Detail</strong><br />
<br />
• Conference Board Index of Leading Economic Indicators: A new report was issued on 3/17/2011, and it registered another increase in this index. That makes 8 monthly increases in a row. Positive. +10<br />
<br />
• Fed Funds Rate: No change at 0% to 0.25%. This sentence has not changed for several months: The Fed is clearly committed to a loose money policy until the economy is well into recovery or they become concerned with inflation. Positive. +10<br />
<br />
• S&P 500 Market Valuation (P/E): Morningstar pegs the current operating P/E of the S&P 500 at 16.1, same as last time and well below the lower edge of the 17.3 – 21.1 neutral range. Positive. +10<br />
<br />
• Morningstar’s Market Valuation Graph. Morningstar’s proprietary market valuation graph is 1.03, up a tiny bit from 1.02 last time. Any value within +/- 10% of 1.00 is neutral. +5<br />
<br />
• S&P 500 Short Term Technical Trend: The market’s upward trend over the last couple of weeks has seemingly reversed the decline that started on February 22. The index and the two shorter moving averages (20-day and 50-day) have crossed back and forth through each other. The chart is still ambiguous, because the 20-day SMA has not yet crossed back up through the 50-day SMA, although the index is above both. Neutral. +5 <br />
<br />
• S&P 500 Medium Term Technical Trend: Index > 50-day SMA > 200-day SMA. This configuration is the same as last time but much more solid now. Positive. +10<br />
<br />
• DJIA Short Term Technical Trend: The Dow’s configuration is the same as the S&P 500’s. Thus it is ambiguous and neutral: +5.<br />
<br />
• DJIA Medium Term Technical Trend: Same as the S&P 500 chart. Positive. +10<br />
<br />
• NASDAQ Short Term Technical Trend: The NASDAQ, as usual, has been the most volatile of the three indexes. Its present configuration is the same as the other two. Neutral. +5<br />
<br />
• NASDAQ Medium Term Technical Trend: Last time, the Index had dropped below its 50-day SMA, but now it is back above it, boosting this indicator to positive from neutral. +10<br />
<br />
<strong>TOTAL POINTS: 80</strong><br />
<strong>NEW READING: 80 / 10 = 8.0 = POSITIVE</strong>Dave Van Knapphttp://www.blogger.com/profile/12291663715809779053noreply@blogger.com