This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Investing for Gains vs. Income

NEW YORK ( TheStreet) - Sometimes it's hard to believe I'm 58. I feel great, I love my work and I am more productive than ever.

But the white hair doesn't lie. I'm closer to the end of my career now than I am to 50.

So my investment scheme should be changing.

For decades I've been focused on capital gains. I would buy technology stocks, or any sector where prices were moving up. I defined that bottom line by the top line, the total value of my portfolio.

Stocks like Google (GOOG - Get Report) and even Amazon.com (AMZN - Get Report) have been great for young investors because they delivered price appreciation. Especially Amazon -- it's up 264% over the last five years. Wish I had some.

Sometimes I have made mistakes. I fell in love with stocks and lost money. I lost money on Apple (AAPL - Get Report) that way. I fell in love with the market and lost money through the Great Recession. But I hung in and, overall, I'm ahead.

Still, the tech sector is changing, just as my own investment goals are changing. A lot of tech stocks are no longer good ideas for young investors. They're for greybeards like me.

Take Microsoft (MSFT - Get Report), for instance. Please.

Lots of people are dumping on the stock, but given its dividend of 23 cents a share, that just means the yield is rising. When I last checked it was at 2.95%. That's better than what you will get on many 10-year bonds.

Microsoft needs to earn about $2 billion/quarter to make that payout. It earns more than twice that, consistently. It's a safe dividend.

If you bought Apple at its April bottom you were getting a similar yield, about 3%. Now, with Apple having risen in price, that yield is down to 2.44%. But you've got a nice fat capital gain, about 24%, as well. Tech stocks you bought for gains in your 30s are those you can buy for yield in your 60s.

You can see this even more clearly in the oil patch, which I watched closely at my first job, way back in the 1970s, at the old Houston Business Journal. (The picture of me above appeared in one of their ads.)

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $131.74 1.60%
APA $60.55 -1.40%
AMZN $429.05 0.84%
GOOG $536.37 0.76%
KMP $102.03 1.98%

Markets

DOW 18,145.10 +103.56 0.57%
S&P 500 2,117.78 +13.58 0.65%
NASDAQ 5,076.17 +43.4190 0.86%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs