I don’t have a lot of money in the 529 plan. And all is in the Vanguard S&P 500 index fund (Vanguard 500 Index Option).
I am thinking, if/when the S&P 500 index bounces back to the previous high (6,147.43), I am going to start convert some of S&P 500 index fund into Vanguard High Yield Corporate Option (something similar to this, I think). I will do it in the increment of 5% or 10%.
This will be a good exercise for me in terms of withdrawing from an account: converting from stocks to cash over the time etc.
(Update 05-16-2025) I did one percent conversion today, from S&P to high yield bond fund. Was 100% S&P, after today it should be 99% S&P, 1% bond.
Before and after
(05-27-2025) 98% vs 2% now
(06-18-2025) 97% vs 3% as the market close on 06-20-25. I submitted the request a bit late and didn’t make it to Wednesday’s cutoff, and Thursday 6/19 is Juneteenth holiday and no stock market in the USA.
(06-24-2025) It appears the above exchange did not happen, as I saw the below message from the account:
Exchange your assets Your last exchange was processed on May 27, 2025. You have performed the two exchanges that are permitted in this calendar year per IRS regulations. You will be allowed to exchange again on Jan 1, 2026.
Reading Time: 2minutesA fun math problem suitable for a confident 4th grader
I went to my 9 year old (4th grader)’s class recently and tried to talk about the “The Stock Market Game” (btw, it looks like my main winner is Nike for now 🙂 Below is something I shared in my daughter’s class.
I also tried to answer some questions on individual stocks too, e.g., Adobe, Chipotle, Peabody Energies (do they still have the same name after emerging from bankruptcy, btw).
— Peter Lynch (famous mutual fund manager in the US)
Warren Buffett said something similar (only need 4th-grade math for stocks) in the 2022 Berkshire Hathaway Shareholder meeting, at about 1 hour 40 minutes mark, morning session (available on Apple Podcast and YouTube)
Reading Time: 5minutesStock chart for AT&T ends on 07/14/2023 – this actually the low point of stock for a while as you can see the new chart here
(Update 12-19-2024) I gave it more thought here at my Substack.
(Update 12-31-2023) I just looked at one of my IRA accounts in which I hold mostly stocks. The dividend yield is about 1% (I hold about 45% of the portfolio in $BRK). There are two points of the views on dividend based investing, some people argue we don’t always need the dividend. In the example of $BRK, basically we can trust the management, and we just need to sell the stocks to get the “dividend” for our spending need. Below is a YT video that explains this.
(Update 12-15-2023) Costco is issuing a special dividend of $15 per share, and this spurs some interest on some investors. Quote Motley Fool: “This will be Costco’s fifth-ever special dividend. Previous special dividends were paid in 2012, 2015, 2017, and 2020 in the amounts of $7, $5, $7, and $10, respectively. This makes the company’s 2024 special dividend of $15 its largest, by far.” I only have a few shares of $COST, btw. Below is a bigger $COST shareholder.
But I have more $KO, and I believe today 12-15-2023 is also the day Coca Cola pays out quarterly dividend: it’s 46 cents a share. Note $BRK has much more dividend income from $KO.
Other dividend stocks I have: $DVN and $PFE. Both declined significantly this year. I bought $DVN in the hope of getting the dividend yield, and it seems with the oil price slipping (in the near future), this didn’t work out for me yet. You may also notice $DVN’s dividend dropped compared to last year.
In the case of $PFE, the situation is much more dire: as shown in this Yahoo Finance Video.
Last but not least, Steve Baller, the former CEO of Microsoft, is getting lots of money from $MSFT dividend.
I have invested or to be more precise speculated in the US stock market since 2003, and this will mark the 20 year anniversary. In recent years, I gave more thoughts to the dividend, both because the dividends are becoming more meaningful, as well as I am thinking about potentially switch from a 9 to 5 job to multiple income streams, e.g., dividends, adjunct teaching at college, ads income from this blog (this seems to be hardest so far, btw :-), etc.
A few things to keep in mind when doing dividend-based or focused investing.
Make sure the company can afford or pay the dividend from its Free Cash Flow (FCF). If something is too good to be true, it’s likely not true. Case in point, if you look at AT&T stock now (07-21-2023), the dividend yield is 7.5%. The problem with AT&T and some other companies (e.g., $SCS, Steelcase the office furniture maker came to mind) is with the debt and deteriorating business or economy, they may not be able to pay the dividend continuously. I know one company that cut dividends recently: VF Corp ($VFC). More on AT&T, I had a tweet on its return in the last 29 years: I think I still need to calculate it myself. Not sure if the chart below includes all the cash dividends and the stock dividend (“Additionally, shareholders of AT&T received 0.241917 shares of WBD for each share of AT&T common stock they held at close”) $T #dividend.
I just noticed this Tweet (thread): S&P Dividend Aristocrats (Wikipedia; 5 year performance comparison with S&P 500, google finance, it seems they did NOT include the dividends in the calculation). I have $KO (#CocaCola) on this list. But Number 2 on the list Leggett & Platt, Incorporated (LEG) looked interesting to me. I just realized it’s based in Missouri (wiki), in fact, the town Carthage, Missouri is close to Joplin, MO, and it has two interstates passing the town: I-44 and I-49. Note their products are also interesting (e.g., this geosynthetic solution and their specialty products, as well as their history. They seem making components for office furniture too – reminds me of Steelcase and my recent purchase of an office chair. The family appears to no longer controls the company. Their current annual dividend is $1.84 (rate is %6.26 per Friday 7-21-2023 closing price of $29.38). I think I will do a deep dive into the company next. Btw, recently I realized this is a hard time for new graduates to get into the IT/software development field, I just noticed there is one position for this company (IT support, I know it’s not ideal, but still something to think about as an entry-level job).
I think I probably say a word about why invested in “stocks that issue cash dividend”. Besides the benefits of cash, a company that issues dividends regularly in some way shows two things: 1) Financial strength (again show me the free cash flow); 2) They care about the shareholder, in some cases the owners probably have a lot of shares too and they actually rely on the dividend for their lives. On the other hand, this does not mean the companies that doesn’t issue dividend are not good, in fact, Berkshire Hathaway the company famous investor Warren Buffett doesn’t issue regular dividend. I recall he said once they did issue 10 cents (source: “Other than a ten cent per share dividend that Berkshire paid in 1967, the company has never paid a dividend to shareholders since Warren Buffett took control in 1965.“) dividend, which looking back it was an expensive mistake. The reason being they invested in the money (say $1) instead of give it to shareholders right away, they get way more than $1 down the road.
PS: Leggett & Platt reminds me of another Missouri based company (Monett, Missouri), ironically it’s a banking ( technology company named Jack Henry & Associates (JKHY). They provide technology and service for financial services industry, with a focus on smaller banks or credit unions. It has an excellent return if we look from its IPO. It has a small dividend, and is in the S&P 500 index. Maybe someday I will drive around those two towns, and see if I can find special sauces that made them successful. Note the greater St. Lotus area has some S&P and Fortune 500 companies too: such as Emerson Electric (EMR) on this list (tweet). Btw, the all time return of JKHY (+47,569.44%, from 1985) is much better than EMR (+1,717.33%, from 1983). Not sure if Google finance has the complete set of historical data. Btw, Leggett & Platt (LEG) Inc performed similar to EMR in this period. I probably looked at JKHY about 15 years ago, not definitely not as serious as Warren Buffett. Warren probably reads the annual report for the company he is interested (plus the reports for 8 competitors).
Market sentiment week of 07-17
It can be better summarized by the unusual_whales tweet on the $ABNB share sales of its cofounder. While I am not saying the insiders always time the market, but it still reminds me of this: Microsoft CEO Satya Nadella sells more than $285 million in Microsoft stock. I recall about 6 month later (April 2022), $MSFT and Nasdaq had a peak / climax. Again I am not predicting the same this time around 🙂
Please email me at minjie dot xu at gmail dot com if you like to join
讨论美股个股为主(Latest update is at the bottom). 近年我个人比较成功的是OKTA：她家做identity cloud ☁️ (single sign on, security as a service etc). ZM没有拿稳比较可惜。I also long Berkshire Hathaway, Alibaba and GoodRx. Two disclaimers: 1) Your money 💰, your call (decision); 2) I am not big on macro trend / economics, neither am I big on market predictions: other than general things such as republicans are usually for less regulations, Democrats are for more tax / wealth distribution if you will.
(Update as of 12-28-2020: I sold off GDRX recently and I sold some $BABA today and last Thursday. I plan to sell remaining $BABA in the near future)
(Update 01-08-2021: 股市有泡沫，投机需谨慎).
(Update 11-01-2021: top 6 stock holdings in all my accounts are (in the order of most money => least): brk.b, sbux, ko, hun, SLB and DVN. The last 3 are chemicals, oil services and oil / gas producer. I believe we have at least 10 to 20 more years of internal combustion engines cars / trucks, and many many more years usage of chemicals (thinking painting, building materials etc.), plastics etc). ||
(Update 01-22-2022) The US stock market 📉 is entering the correction mode, as we have seen from last week. Be careful out there and pay attention to the cash management. Personally I try to keep 10% to 15% in cash in my account: everyone can pick a ratio that’s comfortable to her / him. Buckle up and we will see the other end soon or later.
(Update 03-01-2023) not much has changed, except the inflation and the Fed. Big tech/saas/cloud players mostly entered into a plateau after the recent spectacular run/crash, $ZM is a good example. But in longer term, i agree with Warren Buffett said: the America’s best day us still ahead and the growth of this country is the best tail wind for the stock market. This was true in the past 🐻 markets (personally I recall 2000-2002, 2007-2009), and will be applicable today as well.
PS: 05-17-2023 I did not post those in the WeChat group. I looked at my performance in the last 2 years. My biggest gainer is the $BRK.B. And I think I need to find revenue or gain outside of $BRK.B and other Berkshire Hathaway holdings: e.g., $AVTI, $AAPL etc.
