What’s happening with IGD?


Today Global Equity Dividend & Premium Opportunity Fund (IGD) dropped price by almost 6%. Why is it happening? The fund announced a distribution yesterday and it meant another distribution decrease (a third decrease in a row).

ING Investments, LLC announced the monthly distributions on the common shares of two of its closed-end funds: ING Global Equity Dividend and Premium Opportunity Fund (NYSE: IGD) […]

The monthly distributions announced today are reduced from distributions paid in prior periods in an effort to align the Fund’s distributions with the current conditions in the equity and options markets. The Funds’ management considered a number of factors before deciding to decrease … Fund’s distribution, including the level of assets in each respective Fund, the dividend yield of the underlying equity portfolios and prevailing implied option volatilities.

With respect to … (the) Fund, the distribution will be paid on July 15, 2010, to shareholders of record on July 6, 2010. The ex-dividend date is July 1, 2010. The distribution per share for … (the) Fund is as follows:

Fund Distribution
Per Share
Change from
previous
month
ING Global Equity Dividend
and Premium Opportunity
Fund (NYSE: IGD)
$0.100 – $0.025

I checked the stock (fund) closely to see why this is happening and whether I should sell this ETF or hold it. ING Global Equity Dividend and Premium Opportunity Fund (the Fund) is a non-diversified, closed-end management investment company. The primary objective of the Fund is to provide a high level of income, with a secondary objective of capital appreciation. The Fund seeks to provide investors with a high level of income from a portfolio of global common stocks with dividend yields and premiums from covered call option writing utilizing an integrated option strategy. The Fund would invest at least 80% of its managed assets in a portfolio of common stocks of dividend paying companies located throughout the world, including the United States. The investment adviser of the Fund is ING Investments, LLC. The Fund’s sub-advisor is ING Investment Management Advisors B.V.

I looked at the Fund’s numbers and during 2008 – 2009 the Fund has been losing money due to financial crisis. The Funds holds 20.56% in Financial sector and during the crisis this got hit severely:

Top Sectors

% of Total Investments as of 04/30/2010
Financials 20.56%
Energy 12.20%
Consumer Staples 12.10%
Utilities 10.94%
Health Care 10.48%
Telecommunication 9.03%
Industrials 7.08%
Information Technology 6.43%
Consumer Discretionary 6.39%
Materials 4.78%

Another issue is that the Fund holds almost 40% (37.44%) of its holdings in European regions and these were hit severely too due to debt crisis in Greece, Portugal and Spain.
In this light it seems to me as a wise move that the management reduced the Fund’s distribution to keep the fund aligned with its current cash flow. The total yield is still more than 10% and when considering that the financial sector as well as Europe will not be in the crisis forever, the IGD is a great opportunity to buy at a discount right now as a long term investment.

Based on that I decided to hold on this ETF and as my cash allows I will potentially buy more shares.




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Posted by MartZee June 16, 2010
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Visa added to portfolio


Today I have bought Visa to my portfolio. I am expecting the stock to rise to $100 per share by the end of the year. Revenue growth is expected at 14% during the next five years. The stock will benefit from the economy recovery in the long run.


06/16/2010  10:33:26   Bought   20   V  @  76.1094




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Posted by MartZee June 15, 2010
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Market in confirmed rally today


The stock market has changed its status into a confirmed rally today as it surged in higher volume. The S&P 500 surged 2.3% and the Dow 2.1% as both cleared resistance at their 200-day moving averages. The NYSE composite climbed 2.5%, thanks to strength in energy and industrials.

Visa (V) erased its morning loses and ended high almost 4.5%. Given that I am buying this stock tomorrow.




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Posted by MartZee June 10, 2010
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Visa is creating a new trend


Visa (V) is creating a new trend these days, however the entire market is still weak and may not support this trend. Watch the stock very carefully. Right now the trend is creating its third high-high point and soon it may reverse to create a new high-low point. If it happens, on its reversal at high volume it will be my entry point. Also the entire market must be in confirmed rally at the same time to buy any new positions.

Today morning the market opened in strong rally after China trade data and US job data. The Dow Jones industrial average rose about 230 points in late morning trading. The Dow and the Standard & Poor’s 500 index climbed about 2.3 percent, while the technology-dominated Nasdaq composite index rose about 2 percent, which is creating a follow-through day. If this trend sustains its momentum till the end of the day, we may see the market in rally attempt.

I am expecting Visa to provide a buy point sometimes in June 16 to June 21st 2010.




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Posted by MartZee June 07, 2010
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Market slips back into correction


Today’s last hour sell off sent the rally attempt back into correction on fears that Europe economic problems would hurt recovery. The Dow slashed 115 points a day after it dropped 323 points on Friday. S&P500 is down 14 and Nasdaq which led the rally attempt a few days ago reduced by more than 2% and ended this rally attempt. Once again, it is wise to wait with buying new positions. I am staying in cash and waiting aside for the new rally.




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Posted by Martin June 05, 2010
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Picks 05/31 – 06/04


Trading Account:

New [tag]stock picks[/tag] this week:

Stocks bought or added to portfolio this week:
none

Stocks dropped from portfolio this week:

Stocks watched this week:

none

Existing & new [tag]holdings[/tag]:
Symbol Qty Last Gain($) Gain(%) Stop ATR Risk to
stop (%)

Contribution this week: $0

Current [tag]capital exposure[/tag]: 0%     Learn more

New positions available to open: 0     Learn more

Starting [tag]account value[/tag] = $1,600.08

Account value = $1,600.08 (without margin)

Buying power = $0

[tag]Portfolio Gain/Loss[/tag] this week = 0%

[tag]Portfolio[/tag] Gain/Loss for JUNE 2010 = 0%

Portfolio Gain/Loss for 2010 = -45.43%

[tag]Annual Return[/tag] (CAGR): -37.56%

Lending Club:

Debt notes
Available cash: $15.60
In Funding Notes: $0.00
Outstanding Principal: $389.08
Accrued Interest: $2.61
Account Total: $407.29  Net Annualized Return: 12.79%
Contributions this week: $0.00
Weighted Average Rate: 11.56%
Expected Monthly Payments: $13.11
Payments to Date: $15.79
Principal Payments: $10.92
Interest Payments: $4.87
Late Fees Received: $0.00

ROTH IRA Account:

New [tag]stock picks[/tag] this week:
06/02/2010 Bought 11.800 GABUX @ $6.00

Existing & new [tag]holdings[/tag]:

NTF Mutual Funds
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Port.
(%)
AIGYX 83.472 12.74  63.44 6.34 7.13 27
ATIPX 106.395 8.91  7.80 0.83 7.04 24
GABUX 77.118 5.88  -17.35 -3.68 3.99 12
HISIX 26.918 6.20  -33.11 -16.55 4.56 4
SICNX 62.259 6.33  -55.89 -12.42 4.97 10
SWDSX 53.286 11.14  -10.57 -1.75 4.00 15
SWLSX 29.814 9.35  9.84 3.66 1.63 7
Individual ETFs
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Portfolio
(%)
AOD 219.0 6.71  -534.36 -26.67 21.40 82
IGD 29.0 10.89  -40.89 -11.46 13.61 18
Individual stocks
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Portfolio
(%)
Account target and current allocation
Individual stocks 0 42% 0%
NTF Mutual funds $3,898.22 38% 67%
ETFs $1,785.30 20% 31%

Contribution this week: $50

Starting [tag]account value[/tag] = $5,889.44

Account value = $5,783.52 

Dividends received in JUNE 2010 = $5.03

Dividends received in 2010 = $150.05

Portfolio dividends yield 2010 = 2.59%

Portfolio dividends yield lifetime = 4.05%

Dividends received lifetime = $234.17

[tag]Portfolio Gain/Loss[/tag] this week = -2.63%

[tag]Portfolio[/tag] Gain/Loss for JUNE 2010 = -2.63%

Portfolio Gain/Loss for 2010 = -8.79%

[tag]Annual Return[/tag] (CAGR): -5.90%

[tag]Portfolio Return[/tag] since inception: -18.83%

Last week the stock market resumed rally again, particularly NASDAQ. However on Friday the rally attempt has been put under pressure and this rally may fail. This is why I am still keeping the market status at “Rally Attempt” instead of changing it to a confirmed rally status. The next week trading will reveal if this rally sustains this pressure or continues.

I am still watching a few of the stocks I wish to buy – Visa and Medifast. Both stocks are creating great buying opportunity. Visa is still under a strong downtrend, however, creating possible trend reversal. I still cannot say, whether it is turning the direction or not. So waiting for the market and for the stock to show its direction is the proper way to go.

Medifast is in downtrend reversal. The weekly chart created the bullish reversal in oversold zone, but I am waiting for the reversal on daily chart.

I am still thinking on how to manage the trading portfolio better way, whether to quit stock trading for now, save more money and return back later or continue trading while saving more money. I still do not want to give up the trading, so most possible way will be that I will purchase stocks like Visa, Medifast and I will continue saving in a mutual fund or ETF the similar way as I do in my ROTH IRA account.


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Posted by MartZee June 01, 2010
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Picks 05/24 – 05/28


Trading Account:

New [tag]stock picks[/tag] this week:

Stocks bought or added to portfolio this week:
none

Stocks dropped from portfolio this week:

Stocks watched this week:

none

Existing & new [tag]holdings[/tag]:
Symbol Qty Last Gain($) Gain(%) Stop ATR Risk to
stop (%)

Contribution this week: $0

Current [tag]capital exposure[/tag]: 0%     Learn more

New positions available to open: 0     Learn more

Starting [tag]account value[/tag] = $1,600.08

Account value = $1,600.08 (without margin)

Buying power = $0

[tag]Portfolio Gain/loss[/tag] this week = 0%

[tag]Portfolio[/tag] Gain/Loss for MAY 2010 = -33.54%

Portfolio Gain/loss for 2010 = -45.43%

[tag]Annual Return[/tag] (CAGR): -37.56%

Lending Club:

Debt notes
Available cash: $15.60
In Funding Notes: $0.00
Outstanding Principal: $389.08
Accrued Interest: $2.00
Account Total: $406.68  Net Annualized Return: 12.79% 
Contributions this week: $0.00
Weighted Average Rate: 11.56%
Expected Monthly Payments: $13.11
Payments to Date: $15.79
Principal Payments: $10.92
Interest Payments: $4.87
Late Fees Received: $0.00

ROTH IRA Account:

New [tag]stock picks[/tag] this week:
05/24/2010 Bought 8.375 GABUX @ $5.97
05/26/2010 Bought 17.007 GABUX @ $5.88

Existing & new [tag]holdings[/tag]:

NTF Mutual Funds
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Port.
(%)
AIGYX 83.472 13.48  125.21 12.52 7.13 29
ATIPX 106.395 8.92 8.87 0.94 7.04 24
GABUX 65.318 6.00  -8.09 -2.02 3.99 10
HISIX 26.918 6.32  -29.88 -14.94 4.56 4
SICNX 62.259 6.46  -47.80 -10.62 4.97 10
SWDSX 53.286 11.46  6.49 1.07 4.00 16
SWLSX 29.814 9.54  15.50 5.76 1.63 7
Individual ETFs
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Portfolio
(%)
AOD 219.0 6.91  -490.56 -24.48 20.63 82
IGD 29.0 11.27  -29.87 -8.37 14.49 18
Individual stocks
Symbol Qty Last Gain($) Gain(%) Div.
Y(%)
Portfolio
(%)
Account target and current allocation
Individual stocks 0 42% 0%
NTF Mutual funds $3,933.55 38% 67%
ETFs $1,840.12 20% 31%

Contribution this week: $150

Starting [tag]account value[/tag] = $5,858.65

Account value = $5,889.44 

Dividends received in May 2010 = $38.30

Dividends received in 2010 = $229.14

Portfolio dividends yield 2010 = 2.46%

Portfolio dividends yield lifetime = 3.89%

Dividends received lifetime = $229.14

[tag]Portfolio Gain/loss[/tag] this week = 0.53%

[tag]Portfolio[/tag] Gain/Loss for MAY 2010 = -9.99%

Portfolio Gain/loss for 2010 = -6.38%

[tag]Annual Return[/tag] (CAGR): -5.23%

[tag]Portfolio Return[/tag] since inception: -16.76%


Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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Interested in Dividend investing, but don’t know how to start?


I had this dilemma when I was figuring out what I wanted to do with my ROTH IRA account. I opened this account sometime in 2006 and had no plan at all. I was just buying some ETFs with somewhat messy allocation and I truly had no clue what to expect from the portfolio. Was I looking at capital appreciation, growth, value or income? I had no idea.

To start investing I needed to find out what I wanted. All the time, every minute I was thinking how to increase my savings, how to boost my contributions into my investment accounts to make them growing at higher speed. And that was the moment I found what I wanted to do with my ROTH IRA account.

I did a lot of researching on the Internet what would be the best strategy and approach which would satisfy my initial question to boost my portfolio. I realized, that dividend investing may be the point. Investing into dividend paying companies may bring some capital appreciation over time and deliver additional capital to reinvest and boost my portfolio. And that is my 2010 year goal to bring it up to levels where the portfolio will be speeding up as a snowball and growing faster and faster.

When researching how to invest in dividend paying stocks I came up with several good ideas. One I liked a lot was that over the long term dividend oriented portfolio outperforms all other investment strategies. And that is what I wanted.

So how to start?

The best way is to read and learn from others. I found several great blogs on the internet and I learned a lot from the investors who run them. So, here are my favorite blogs from which I have learned the most:

The Dividend Guy
For me: the most valuable blog I came across during my research and I learned the most. The most valuable information you may find on this blog is the investment strategy, which you can find in “My investment process”. I also value the holdings section, which can provide ideas for stocks and ETFs suitable for adding into a portfolio. For me this section provided a great link between holdings and valuation of stocks. Lastly, the greatest value is the weekly review of what’s happening in the dividend investing world. If you are a novice investor like me, read this blog.

Dividends Value
A blog literally loaded with dividend stock analysis, tools and valuable advice on dividend investing. Originally, I came across this blog through The Dividend Guy. This blog is also a “must read” blog. As a newbie in dividend investing you may start with following the blog and its ideas and as the time goes you start being more proficient in selecting and analyzing stocks yourself and be more “do-it-yourself” directed. However to start, read this blog first on regular basis.

The DIV-Net
A blog of the dividend network. Another great source of information on dividend investing. All experienced dividend investors who I could find on the web are contributing on this blog, so you may find several different ideas from all these guys at one spot. Locate “Recent DIV-Net Core Member Posts” section and you will have them all at once. Read a lot. After about six months of reading I was able to gain some confidence on what I was doing with my ROTH IRA portfolio, so even today with such a scary market behavior I am confident enough to hold on the strategy, which I believe will save me money in the future.

The Dividend tree
Just go to categories and you find gems in there. Analysis, Asset allocation, Dividend increase, Investment process, When Markets Collide and many others worth of reading.

Dividends4life
The last of the blogs I read on regular basis. You will find a lot of valuable analysis and advice on this blog such as One Rule To Improve Your Investing Performance (DIV) and a lot of investing ideas. It has a lot of educational value (for example go to “Process” category) which will help you to create a sustainable strategy.

If you are thinking about what strategy to go and considering dividend investing and reinvesting all dividends to create a snowball which will boost your savings the best start is by reading those blogs.

My contribution to the dividend investing would be a short advice of how to start with a small account (if you have only a few bucks a month to invest). The dividend guy writes about it in his post What Would You Invest in if you only had $1000. However I might have my recommendation here. If you have only $1000 to start with and then ca. $50 a month as subsequent contributions, you will be forced to watch your costs primarily. And here I am not talking about the costs implied by the fund (which is one important aspect too), but by your broker. Yes, you may set up an automatic payment, but that will tie your investment decisions and asset allocations. You won’t be able to allocate your money freely into under-allocated funds and reinvesting the dividends will be limited only to reinvesting into the same fund which generated the dividend (DRIP), which I personally do not favor.

To overcome this limitation a non transaction fee (NTF) fund may be your solution. With this fund(s) you can invest as little as one dollar and it will cost you nothing. There are some other limitations, such as you cannot sell such fund earlier than after 180 days redemption period otherwise a fee will be applied, these funds may be a bit more expensive (the expense ratio is higher) than the regular funds and you still will need some amount for an initial investment, however you may find funds with zero initial investments.

A regular investing of small amounts into these funds can help you save enough money, get a nice dividend and once you save, you can sell the fund and reallocate your money into ETFs or individual dividend paying stocks so the commissions won’t eat up your profits. At least I learned dividend investing this way.




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