Wednesday, May 24, 2017

Recent Buy, May 2017

Clean Teeth Gremlin here to talk about some more recent buys. Today I accomplished two things.  One, I went to the dentist then starved myself for a few extra hours because my teeth felt so damn clean - minty fresh.  And two, I bought some stock.  I have been making fewer purchases since the demise of Loyal3 (which I will also discuss today), but going forward my purchases will all be bigger in terms of quantity.  Also because I cannot shotgun approach investing as I could with Loyal3, I a being a little more price conscious.  Still those are not bad things, and what did I buy?

Today, I added a new position by purchasing shares of T-Rowe Price (TROW) in my IRA  account.  I bought 15 shares, with a total cost of $1035.26 ($69.01 / share, including commission).  The current yield is 3.21%.    The P/E ratio for TROW sits today at approximately 13.34, below it historical average.  TROW boasts around a 43% payout ratio and 31 years of dividend growth.  This purchase will add $34.20 to my 12-month forward income.

TROW has been raising their dividend as long as I have been alive.  Last year was their weakest raise in a long time, below 4%, however looking at them over the last 5-10 year frame one can see their assets under management (AUM) have increased, and the dividend TROW pays has typically been increasing between 6 and 10%.  That is the kind of growth I want.  Overall, I am a supporter of asset managers, after all I already own AMP and would like to own a few others.

I agree with dividend bloggers who have stated online before that 'the market and investing are not that hard to understand.'  Still most of those people (and people less driven or intelligent than them)  who even do understand the basics jump for ETFs, Mutual Funds, and other types of index funds.  Why?  Because it is easy.  Investing as a dividend growth investor takes time and patience.  Most people don't have those things.  Picking a few low cost index funds is much easier (for the record if you're not interested in stocks, I fully support people going that route). In a sense this investment along with AMP show that I do think people will invest, but I don't think they will doing the investing.  Perhaps that is a somewhat cynical thought, but in doing my regular work, my side job at a bar, and overall daily life it is easy to think most people fall into that category.

As for Loyal3, I am still waiting on them to transfer my assets to my main account.  Apparently the tiny transfer division at Loyal3 was completely swamped with transfer requests when they announced their recent shutdown.  Who did not see that coming?  Answer - clearly just Loyal3.  I would imagine a lot of the low costs users immediately looked for the next best option, and it was not the one being offered to them at the outset.  So all those fleeing the ship did the same thing, jumped to a better ship or an island in my case.

I will update my portfolio page at the end of the month.  Here, again, is to a stronger 2017.

What do you think of TROW? 

- Gremlin
- Long TROW and AMP

PS - I hope Nashville gets the Stanley Cup!


  1. That L3 flame out really does suck but in hindsight, it's not the first zero commish brokerage to go belly up which could provide a cautionary tale for Robinhood. I did like L3 a lot as it removed the barrier to buy stocks for everyone. I have a super, super small part of my portfolio in TROW. While the numbers look great on paper I question their long term viability in this fintech/robo age. That being said, I'm still holding on to my shares but doubt I'll make it a larger holding overall. Thanks for your update!

    1. DHut,

      Thanks for the comment. The L3 flame was a bummer, and it is another in a long string of cautionary tales (that usually end with the phrase 'make sure you have a viable income stream'). I don't plan on having a big TROW holding, and I agree the fintech/robo age hurts them. However, where there is a challenge their is opportunity.

      Thanks again,