Itching for a Buy…Anxiety of a Dividend Growth Investor

It is Valentine’s Day and here I am wondering/thinking – wow, it’s been almost two weeks since I have made a stock purchase.  My last purchase was another small investment using a free trade credit into IBM and it was a small – $547.00 investment at that.  It hasn’t been a full two weeks, looking back, as the trade happened on February 3rd (I didn’t write about it, it was very minimal to my eyes) but when you are used to making almost weekly purchases, the dividend growth investor anxiety kicks in.

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Last year I deployed over $45,000 of capital, in a single year alone, as I stated during my portfolio review and assessment.  I still am thinking back at that time period and cannot even begin to think how I was even able to do that, it’s truly a feat I didn’t think I could cross.  Almost $4K a month of contributions being plowed into a portfolio?  What’s wild – is that the total is closer to $50,000 when I add in reinvested dividends, as my total was over $4,000 for the year.  The life of a dividend growth investor has been a true ride for me and I’m starting to wonder why I haven’t made many purchases during the first 14 days of February.

Lower amount of Capital

One of the reasons could be is that my capital cushion right now is at it’s lowest point it has ever been.  I had a busy January with investing close to $3K, but I also have been working between 65-80 hours per week since January 5th, so my savings rate has also approached 60%, so capital really shouldn’t be the problem, right?  I think it could be that I am investing every savings dollar that I have, so I do come to the conclusion that I have a lower amount of capital to invest.  Traditionally I used to invest a typically $1-$2K and this year alone – every single one of my stock purchases have been less than $1,000 a piece into stocks.  One reason I am anxious as a dividend growth investor is due to lower amounts of capital to invest.  The anxiety has built up as My Dividend Pipeline has large purchases at least once a week and Dividend Mantra recently deployed more into his NOV.  The anxiety to purchase a stock as I watch my fellow DGIers do the same, has been difficult.

Market Valuation

Somehow, YTD – the S&P has trucked upwards almost another 2% overall.  It hasn’t been smooth – as many stocks have taken beatings, come back up to values, taken beatings, repeat.  Oil companies and pipeline businesses have performed this, allowing Bert to buy Schlumberger in the last day of the year, upon multiple shares of CM.  However, the last week has seen surges in prices, as my Tupperware purchase has already increased over 20% in barely a month, including over 12% for DOW.  I think that higher prices/valuations on stocks has had me on the sidelines as well, as I build new capital for the next big discount.  What’s funny, is my personal net worth also hit new highs going into this weekend at $175K, with my portfolio hitting over $140K for the first time – one would think a traditional investor wants to keep buying as prices are going up in the market – not a fundamentally sound, dividend income and dividend growth investor.

Time

Another reason behind all of the delay in February could be due to time.  As you, the readers know, Bert and I are CPAs and audit financial institutions.  Busy season started on January 5th and I have been working the 65-80 hour week grind, as well as travelling for weeks on end – I actually flew home from Wichita Kansas this week, as I was out there for a full week with a new engagement team.  The travel and going out to eat beats it out of you.  I know that when i stare/work/look at a screen for 12+ hours per day that the last thing I want to do now is to be in front of it even more to research, review and do other investor-like things.  I pay attention still during the day with the market, but luckily, as I explained above, no great one’s have jumped out directly at me.  However – it is hard to review and see what’s going on with investments and dividend income stocks hwen you have to have multiple meetings, talk to clients, introduce engagement team members to individuals, receive support for your work… and the list goes on.  I need to be better with my personal time management – my work management is fine, but when it comes to my personal life and endeavors – I have to be better, simply put.  I find it sometime shard to say no to dinners and lunches (however I said no to going to dinner once this week, and stayed in/got to go a few lunches; however – that was just to try to get more things done for work…) and to use that time (even if it is not billable) to focus on Lanny.  As a dividend growth investor, looking for dividend income producing stocks that have great dividend growth rates, sharebuy back plans and to read earnings releases – it’s hard when you don’t set that 30-60 minute break for yourself.  I need to be better at this.

Anxiety Conclusion

This year so far hasn’t been a total decline/drop in activity – as if you include dividends this month and my best January dividend month (fine… fine, I guess Bert had a decent month too) – I actually have placed approximately $3,900 into the market, which I am therefore on pace for over $31,200 (if we are at the 1.5 month point) for the year.  Obviously not as much as what 2014 had to offer, but still a decent amount, nonetheless.  I do realize I am still on track and pursuing my other goal of paying down my mortgage by an extra $500 per quarter – which also tightens up the savings account.  The dividend growth investor anxiety is at a high right now and I need to just re-focus, I believe plain and simple.

What are your thoughts?  Have you ever gone through this as an investor?  Does this make you feel like you’re behind?  What do you typically do to overcome it?  Thank you, everyone, your thoughts are truly appreciated!  Excited to hear the insight you may have, please comment below!

-Lanny

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22 thoughts on “Itching for a Buy…Anxiety of a Dividend Growth Investor

  1. Lanny,

    Your net worth for your age is insane. Most 50 year olds don’t have that kind of net worth (but then again we don’t measure ourselves by the short comings of others, do we?) Keep your foot on the floor board and you will be a millionaire by age 35. I am certain of it.

    MDP

  2. I can relate to the sentiment. For a while I felt the same way and was almost obsessed with putting my money to work. Then I noticed the valuations were getting skewed away from value and more towards just plain expensive. So I have no problem being patient especially when the dividends keep coming in. The goal for me is always balance, no reason for me to buy stocks I want at a price I think is just too high. Plus I realize that time is on my side.

    – HMB

  3. Hi Lanny,
    Relax, take a deep breath, you’re doing great! Just focus on what you’re doing instead of worrying about what others are doing. I assume it doesn’t bother you that Warren Buffet likely invested $000’s on stocks this month, then why does it matter if another blogger had money to invest also?

    But if investing a certain amount of money in a year is important to you then make that one of your goals and create a plan to achieve it. Otherwise let it go and concentrate on your stated goals (projected income). Quite a few bloggers do put investment capital in their goals; personally I don’t because I think investment money is a means to an end, not the end itself. Or perhaps you could track the time taken to earn each $1000 (or whatever minimum) for an investment; as your income increases this time should decrease, and it might be helpful seeing that number decrease.
    As far as actually having capital to invest and not being able to due to circumstances / being busy, that’s really under your control and how it stacks against your priorities. There might be ways you could reduce the daily effort for investing. Perhaps you could schedule time when you’ve built enough capital to invest and do research at that time, or else schedule purchases with longer-term (lower) market limits and just wait it out for that particular slice of capital.
    Anyway, that’s my $0.02 (with an annualized 10% DGR)
    Best wishes,
    – DL

  4. It is getting harder to find value in the market nowadays. I find myself buying the same companies over and over since everything else seems pricey. But I don’t mind sitting on cash for a while. Hope you find some bargains soon.

    • Henry,

      Thank you — its never a bad thing to buy the same company if you feel there is value there! I hope we both find bargains, I’m feeling a lot more relaxed now on the subject because of everyone!

      -Lanny

  5. Lanny,

    I wouldn’t be bummed out at all if I were you. You’re far ahead of 99.9% of people your own age and you’re sitting in a great spot right now. And I definitely wouldn’t compare myself to others, as others’ situations probably aren’t particularly relevant to your own. I actually just wrote a post today on comparing oneself to others.

    You’re getting there, Lanny! 🙂

    Best regards.

  6. Although I can understand the feeling, there’s no reason for you to worry. No matter where your investment state is – and it’s in a pretty good shape! – making purchases just because it’s been a long time or because others bought is a risky path to take. Don’t forget about the basics: knowing the company, having trust in it, analyzing fundamentals AND past/future history… Maybe you simply didn’t find the company that really suits you yet or didn’t have time to really sit and think about what purchase you want/need/like. In my opinion, always better to be patient. Learned it the hard way myself! 😉

    • Second thoughts: why don’t you simply add to your existing position? I did that this year and it was two very good trades so far 🙂 Don’t forget the more different companies you buy, the more time you have to spend on your portfolio managing it.
      Cheers,

      Mike

      • DG,

        No you make great points. I agree that it reduces FAR much time that you have to do to analyze news and financial reporting. I am looking forward to Sunday, as that will be my free day to rein down on the stock market and my portfolio to see what valuations I like within my own portfolio. Think the gas companies will do well this year with how cold the north has been! Talk soon DG thank you again for words of wisdom.

        -Lanny

  7. Don’t be so stress out or feel anxious about not buying stocks. Last thing you want to do is buying dividend paying stocks for the sake of buying. Your current portfolio value and your net worth are miles ahead of your peers. I wish I have what you have when I was your age.

    • Tawcan,

      Thank you — I am feeling better after the reader comments, feeling much better.

      I don’t want to jump into bed with something I don’t know, that’s for sure – not the kind of guy I am, eh? I’ll take my time and I’ll wine and dine a dividend stock – we shall see what comes, but I am feeling great now about waiting. Thank you again for the words of wisdom tawcan.

      -Lanny

  8. I’m more slow and steady as well and the weekly purchase reports make me want to jump in a bit faster. Never anything wrong with taking our time.

  9. Well you aren’t alone without a February buy. As it stands it’s the 16th of the month and I have not any buys either. I can feel your DGI anxiety as I have been asking myself why I haven’t pulled the trigger yet. No worries though. I’m sure you and I will buy something before we hit March. I don’t feel like I’m behind. Last year started out much lighter for me in terms of fresh capital added compared to the end of 2014. It all averages out in the end. Thanks for sharing as I can relate!

    • DH,
      Thank you – i am feeling more and more content with the reviewer responses as of right now. It is OKAY for us not to buy right now — we have a lot of dividends coming and a lot of reinvestment that means for me. I am still catching my breath for not buying for two weeks! Wild stretch for me, I’m glad you can relate. We will be alright!

      -Lanny

  10. Lanny,

    I’m very glad you write this article, as I’ve been feeling anxious too. Since I only started investing in January, I just assumed it was normal, and that I should just be patient. Can’t wait for some stocks in my watch-list to drop in price…but I won’t rush into buying for the sake of it. Let’s hope we don’t have to wait much longer!

    DL

    • DL,

      I know, as soon as you start it really gets the heart bumping to keep going. Looks like the prices came down a smidge today, hopefully opening up a good opp. for you! We will strike when the time is right and feels right. Lets keep it DL!

      -Lanny

  11. Hey Lanny,

    I’m a long time reader, but this is my first comment.

    Texan speculator Salem Abraham had some great advice about this same type of anxiety. He started flipping ranchland with his grandfather back in the 80’s. Salem was anxious to do more deals and his grandfather just laughed and said, ‘You need to get a hobby’.

    The advice that stuck with Salem, “We don’t want to do good deals. We want to do great deals. Good deals tie up your time and money. When the great deals come along, you don’t have the energy for the great deals.”

    Also, nice pick on IBM. I know so many income investors skip that stock because of its merger yield. But when you include the giant share buyback, the payout is closer to 8%!

    Rob

    • Rob,

      Thank you for the history and the advice – as well as the quote – definitely sticks well in this situation. Literally can use that to my investments, where good ones take some energy but my great ones have performed incredible with much less effort.

      Love IBM’s sharebuyback and div increases, no complaints here!

      Thanks again Rob – talk soon.

      -Lanny

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