when I joined 28 years ago I didn't know didly about stock,so I just put all my money in chevron stock 94 per cent exactly.now im paying the price..at 63 and ready to leave now I don't have much on my 401 and pension ,while my friends diversified and leave with a million dollars I only half half of that amount. so I advise new employees ,,,if there is such a thing,,, to go ahead and devirsify your stock,,maybe you will have better luck than me.and maybe marry a rich woman wouldnt hurt either.
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http://www.dividendgrowthinvestor.com/2012/06/most-successful-dividend-investors-of.html
It's not a bad dividend, but depending on that as your retirement strategy is not good. Diversify your investments more constructively for maximum gain.
To be clear it's $1.07 per quarter, $4.28/year. About 4 3/4 % yield at current prices. That's not too bad if you think the dividend is safe and likely to go up over time. Of course, that's a big "if" in the current environment. We will only know in hindsight whether it's better or worse than some other strategy.
9hax, at only a $1.07 per share for dividends, I hope you have a lot of shares to live on. I find it to be a waste of your time keeping this rollover coaster stock. I sold mine shortly after it came off its record high and invested in the S&P 500 which still did well. I since retired and put my investments into other things that are more dependable for sustaining a guaranteed income for the rest of my life. Nonetheless, I hope you are doing well and enjoying your retirement. Congratulations for your 34 years with the company.
28 years, you should have 2 stock splits giving you lots of Chevron stock to live off of the dividends. That is what I am doing now that I retired after 34 years.
@5mxc - I agree relying on one stock would be a risky strategy, but that's what some people did. Investing in several dividend stocks would be safer of course. In any event, though, someone who used this strategy wouldn't really care about the year to year fluctuations in the share prices of the stocks they invested in, just as long as they kept paying their dividend.
Chevron stock will take until at least 2017 to rebound to $100.
Chevron is a good company. Eventually, the oil price will rise again and Chevron stock will go back up. Hold on to your Chevron stock for as long as you can.
@5hwj, very true what you are saying. But would you sink your nest egg into a stock just to live off the dividends, and not do anything if you see the stock start to lose its value? Why not invest your nest egg evenly into 4 or 5 blue chip dividend stocks? Your buy and hold strategy may work out better that way, especially if the stocks are not all in the same sector.
Years ago some retirees would hold shares of a reliable dividend stock and live off the dividend. If the dividend yield is good and the company periodically increases the dividend, you can in theory live off the dividends indefinitely. Of course, if the company goes south, you can be in real trouble. In this case you don't really care about the share price because you don't plan on ever selling it; it's your heirs that lose. However, if a company's share price drops too much, it's going to have trouble continuing to pay the same dividend.
The value of your stock doesn't matter too much if you are holding it? I'd agree with you if you bought into the stock when the price was low. If you buy into it when it's high and see it plummet while holding it just for the dividends, that's not called investing.
The value of your stock doesn't matter too much if you are just holding it and not selling it.
@4kst, the dividend is indeed fixed whether the stock goes up or down. But what benefit is there in earning the dividend if the stock doesn't appreciate in value? On the ex-dividend date, a stock pays its dividend from cash. At that very moment the dividend is paid, the stock's price drops by the amount of the dividend. So, if the stock doesn't appreciate after the dividend is paid, you break-even at best.
The dividend should be a fixed amount per share whether the share value goes up or down.
Investing in a stock like CVX just for the dividends is not a great idea. Dividend investing is a good idea if the stock itself also goes up in value.
At least you are getting a good dividend on your Chevron stock. Hold on to your shares and just collect the dividends.
Many experts advise against holding too much stock in the company you work for. I beleive this advise to be sound, but I profited large several times throughout my Chevron career by holding 100% CVX, then reallocating after I thought the stock had a good run. Many of you may recall when CVX outperformed the major indexes, not to mention our own peers. That said, diversification and periodic reallocation of your investment funds is the best way to invest, IMO. Occasionally, a flight to cash (Vanguard Prime Money Market) is a strategic move to take a breather when things start to get too chaotic.
Selling CVX now and redeeming for Cash/Bonds would be similar to selling a US Stock Market fund in late 2008, early 2009. You have made your failure and now have the option to wait for a market beating rebound (that may never come-but most believe will within 1-5 years or so) or to sell at a loss (can still be a good choice if oil takes decades to rebound).
That being said, diversifying into other oil companies (i.e. go from 100% CVX to 33% CVX 33% XOM 33% RDSB or 100% CVX to 100% XLE) will lower your risk of CVX under performance and should not affect your returns as much as getting out of oil completely.
Any changes you make should be slow and steady performed in many small transactions (if fees and taxes permit). Consider how much the CVX you hold is worth and what you end up exchanging it for Cash/Stocks/Bonds/Property is worth.
If it were me, I would hold on to it or sell some and buy other oil stocks with the proceeds. Then if oil rebounds, I would gradually exit oil stocks and purchase diversified stock and or bond funds.
Going forward, you should never own stocks of a company in the same industry you work in.
I'm sure this sounded like a good plan, When the stock was going up
Diversification is the wise way to invest. Do this but don't fall into the trap of "buy and hold". Never buy and forgot about it. Keep frequent tabs on your portfolio. Analyze the performance of your investments monthly and reallocate funds every quarter.
If my grandfather hadn't followed the advice of his financial advisor to diversify his investments instead of having all of his money in Exxon stock, he would have died a multi-millionaire.
I won't advise you one way or the other. I think you already mentioned what you should have done. But today is today and your 401k is where it's at. Now you are about to retire from Chevron. Seems to me you will have to work a few more years at anything to pay the bills and not retire until you reach full Social Security age.
Hang on to CVX for a couple of years, re-invest the dividends and by late 2017 you will be sitting pretty. These downturns rarely last more than 3 years.