Are you holding some high yielding stocks? You should be. Here’s why. (April 08, 2013)
AI
I’m Dan Fitzpatrick at StockMarketMentor.com on April 8th. It’s Monday and I want to look at Arlington Asset Invest ( $AI Arlington Asset Investment Corp ). This thing trades under a million shares; it traded two thirds of a million shares today, a little bit higher than average. This stock is breaking out of a volatility squeeze. Now the dividend here, this is the magic number, 13.6 percent, this is a high yielding stock, technically it was trading very well. I actually mentioned, for those of you that are members, you know this, I mentioned this last week as one of the high yielding stocks that we’re covering, and so this has been a real nice trade. I suggest that you keep it; I also suggest that maybe you drift to this weekly chart or even this chart. The reason is because the dividend is what you care about. We care about the dollar amount that we get from a stock like this every year. As the stock goes down that means that any additional shares that are purchased have a higher yield; you’re getting more bang for you’re buck. You’re going to get these high dividend stocks that go down, you’re also going to get them that go up. But you have to realize, you’ve got to know, why you are holding them. Are you holding a high yield stock because you really like the chart? Okay that’s fine; well then sell the stock when the chart gets bad, it’s really simple, it’s really not that hard. But if you’re holding it because it is a high dividend payer then the only reason you want to be selling is if you have a sense that perhaps the company is not going to be continuing their dividend. What you have to do when you’re looking at these dividend stocks is you want to look and see how much free cash flow they have, look at the transcript on the conference call. If the CEO says, “Hey, we’re very committed to maintaining our dividends,” that’s all you need to know, just get rid of the chart, collect the money. We’re going to be going over more of these, members, every week. I’m going to keep a list; we already have a list on Stock Market Mentor, for you to follow. A lot of our members are making a lot of money; it’s just kind of slow, steady, boring money on these high yielding stocks. So I hope you will seriously consider putting some of these stocks in your portfolio, I promise you you’re not going to regret it. Okay members get over to tonight’s Strategy Session. We’re ready to go. Free Chart