The Other Way To Harvest Tax Losses

Tax-loss harvesting is a strategy to offset capital gains and so limit tax liability. It is usually done by intentionally selling a losing position to limit the recognition of short-term capital gains, which are taxed at higher federal income tax rates.

Even if a taxpayer does not have capital gains to offset, tax-loss harvesting can be beneficial. Up to $3,000 of a realized loss can be used to offset the taxpayer's income in the given tax year. Additional capital losses can be carried over and used in subsequent tax years.

To discourage tax-loss harvesting, the IRS (Internal Revenue Service) disallows taxpayers from claiming losses on so-called wash sales. Investors have to wait 31 days before repurchasing an investment sold at a loss. The wash rule also prohibits buying anything substantially similar, including options to buy the stock.

Recent Transfer: Dominion Resources, Inc.

Founded in 1909 and headquartered in Richmond, Virginia, Dominion Resources, Inc. (NYSE:D) produces and distributes energy, natural gas and related services to customers primarily in the easter region of the United States. Operations are conducted through various subsidiaries, including Virginia Electric and Power Company.

This is the fifth transfer of a stock from my portfolio at Scottrade to DivGro. I'm providing details of past transactions, including buys and dividends received. I'm also explaining why I like the stock and why I want to be a shareholder. These posts are not very elaborate, as I want to complete the process as soon as possible. Later, I'll do a thorough stock analysis of each transferred stock.

Recent Transfer: AbbVie Inc.

AbbVie Inc. (NYSE:ABBV) is a world-wide, research-based biopharmaceutical company that develops and markets products to treat conditions such as chronic autoimmune diseases, including rheumatoid arthritis, psoriasis and Crohn's disease; hepatitis C; human immunodeficiency virus (HIV); endometriosis; thyroid disease; Parkinson's disease; complications associated with chronic kidney disease and cystic fibrosis, and other health conditions. ABBV was incorporated in 2012 and is based in North Chicago, Illinois.

I'm busy transferring stocks from my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO), Proctor & Gamble (NYSE:PG), and Kimberly-Clark (NYSE:KMB), adding $269.21 to DivGro's projected annual dividend income. In the process, I'm detailing past transactions and giving reasons for being a shareholder.

8 Dividend Increases, November 16 To November 20, 2015

Includes: BF.B • BOBE • JCI • LANC • PEP • SU • SYBT • SYY

Summary

• I monitor dividend increases for stocks in my watch list to identify candidates for further analysis and possible investment. 
• In the past week, 8 companies on my watch list announced dividend increases.
• Dividend increases that exceed the rate of inflation are great for dividend growth investors.
  

Recent Transfer: Kimberly-Clark Corporation

Kimberly-Clark Corporation (NYSE:KMB) is engaged in the manufacturing and marketing of a range of products made from natural and synthetic fibers using advanced technologies in fibers, non-wovens and absorbency. Key brands include Huggies, Kleenex, Scott, Cottonelle, WypAll, Kimberly-Clark and On-Q. The company was founded in 1872 and is headquartered in Dallas, Texas.

I'm in the process of transferring stocks in my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO) and Proctor & Gamble (NYSE:PG). In each of these transfer posts I'm providing details of past transactions and I'm explaining why I'm a shareholder. Later, I'll be doing a thorough analysis on each stock.

Recent Transfer: The Procter & Gamble Company

Headquartered in Cincinnati, Ohio, The Procter & Gamble Company (NYSE:PG) is focused on providing branded consumer packaged goods in more than 180 countries. The company was incorporated in Ohio in 1905, having been built from a business founded in 1837 by William Procter and James Gamble. PG currently competes in 37 product categories and has five reportable segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care.

I'm busy transferring stocks in my portfolio at Scottrade to DivGro. On Sunday, I transferred The Coca Cola Company (NYSE:KO) and today is PG's turn. In each of these posts I'll be providing details of past transactions and explain why I'm a shareholder. Additionally, I'm doing a thorough analysis of each stock to determine fair value.

6 Dividend Increases, November 9 To November 13, 2015

Includes: ADP • MCD • MDU • PRU • RGLD • ROK

Summary

• Monitoring dividend increases for stocks in my watch list of dividend growth stocks allows me to identify candidates for further analysis.
• Another reason I monitor dividend increases is to track yield on cost and projected annual dividend income for stocks in my portfolio, DivGro.
• This week, 6 companies in my watch list announced dividend increases. One of these stocks, MCD, is a DivGro holding.

Recent Transfer: The Coca Cola Company

The Coca Cola Company (NYSE:KO) is the world's largest beverage company and the leading producer and marketer of soft drinks. Along with Coca-Cola, recognized as the world's best-known brand, KO markets four of the world's top five soft drink brands, including diet Coke, Fanta and Sprite. KO was founded in 1886 and is headquartered in Atlanta, Georgia.

I'm busy transferring stocks in my portfolio at Scottrade to DivGro. In the process, I'll be providing details about past transactions and explain why I'm a shareholder. Please look for my upcoming stock analysis of KO.

Changes Are Coming!

As I mentioned in my Q3-2015 quarterly review, I have some big plans for the months ahead.

I'm selling stocks I no longer believe should be in my portfolio. Last week, I sold PennyMac Mortgage Investment Trust (NYSE:PMT) because the company cut its dividend by 23%. I also sold Textainer Group Holdings Limited (NYSE:TGH) after the company cut its dividend by nearly 50%. Several additional stocks are in my crosshairs, but I'm waiting for one last dividend payment from these stocks before selling.

The other plan I alluded to concerns the holdings in my Scottrade portfolio, which used to be a mixture of speculative and dividend paying stocks. While the portfolio performed quite well for me, speculation requires much more time and attention than I can afford at this time. On the other hand, the long-term strategy of dividend growth investing requires upfront work to select candidates that trade at or below fair value, but less work afterwards.

15 Dividend Increases, November 2 To November 6, 2015

Includes: ANDE • BPL • CLNY • EMCI • EMR • ENB • EVR • HON • KIM • MHLD • MIC • SIX • UBSI • UVV • VVC 

Summary

• I monitor dividend increases for stocks in my watch list of dividend growth stocks to identify candidates for further analysis and to make yield on cost adjustments for stocks I own.
• This week, 15 companies on my watch list announced dividend increases, including one of the stocks I hold in my DivGro portfolio. 
• Companies that regularly increase dividends show confidence in future earnings growth potential.

Recent Sell: Textainer Group Holdings Limited

Nov 4, 2015: Sold 75 shares of TGH at $14.94 per share.

On Monday, I sold all my shares of PennyMac Mortgage Investment Trust (NYSE:PMT) because the company cut its dividend. Today, I'm announcing another sell: Textainer Group Holdings Limited (NYSE:TGH), which shocked investors with a dividend cut of nearly 50%.

On Tuesday, 3 November, TGH reported weak third-quarter results, with falling rental rates, lower utilization and significant weakness in container resale proceeds being the main culprits. The near-term future does not look good, either. CEO Phillip Brewer noted that factors such as weak demand and lower rental rates will continue to impact TGH.

Recent Sell: PennyMac Mortgage Investment Trust

Nov 2, 2015: Sold 120 shares of PMT at $14.81 per share.

Yesterday, I sold all my shares of PennyMac Mortgage Investment Trust (NYSE:PMT) because the mortgage REIT (real estate investment trust) cut its dividend from 61¢ per share to 47¢ per share. In announcing the cut, PMT's chairman and CEO, Stanford L. Kurland said: "PMT's objective is to distribute its income through quarterly dividends that reflect the earnings per share we expect from the present investment portfolio.” 

While PMT's reduced dividend still represents a 12.63% yield, I no longer believe the investment should be in my portfolio. This sell removes $292.80 from DivGro's projected annual dividend income.

Recent Buy: ConocoPhillips

30 October 2015: Bought 47 shares of COP at $53.93 per share.

ConocoPhillips (NYSE:COP) is an American multinational energy corporation with headquarters in Houston. Created in 2002 through a merger of Conoco Inc and Phillips Petrolium Company, COP became the 5th largest integrated oil company in the world. In 2012, COP spun off its downstream assets to Phillips 66 (NYSE:PSX), with the intent of maximizing shareholder value. COP was founded in 1917.

My buy price of $53.93 results in an initial yield on cost (YoC) of 5.49%. This buy adds $139.12 to DivGro's projected annual dividend income, which now totals $7,047.

13 Dividend Increases, October 26 To October 30, 2015

Includes: AFL • BOKF • ETP • IRM • LECO • PFS • SASR • STAG • STON • UBSH • VLO • WEN 

Summary

• I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis and to make yield on cost adjustments for stocks I own.
• For dividend growth investors, regular dividend increases are important. I prefer dividend increases that match or exceed the rate of inflation.
• In the last week, 13 companies on my watch list announced dividend increases.

Monthly Review: October 2015

I wrote my monthly review for September 2015 less than a week ago and here we have the October review already! I'm catching up with my blog admin, so hopefully I'll have some time for more interesting articles in the days and weeks to come...

As I mentioned in my Q3-2015 quarterly review, I have some big plans for the months ahead. I'm planning to sell some stocks I no longer believe should be in my portfolio and I'm planning to merge the holdings in my Scottrade account with my DivGro holdings. More on that later!

Dividend income in October was a little disappointing. One of my stocks, PennyMac Mortgage Investment Trust (NYSE:PMT), cut its dividend by 23%. I will probably sell my PMT shares in the coming week. Also, I no longer own shares of Baxter International Inc (NYSE:BAX), which would have paid a dividend in October.

Quarterly Review, Q3-2015

The third quarter of 2015 has been volatile, yet quite quiet for DivGro. The market correction in August saw the S&P 500 drop from its 52-week high of 2,135 down to 1,868 – or about 12.5%. As I write this article, the S&P 500 sits at 2,066, so much of the losses have been recovered.

For longterm investors, market corrections create opportunities to buy shares of great companies at deflated prices. While it feels weird to celebrate a market correction because your portfolio may show losses, those losses usually are temporary and certainly unrealized unless you sell.

For dividend income investors, the situation is rosier. As long as the fundamentals of your stocks do not change, market corrections have no impact on your dividend income. Dividends are paid per share, independent of the current share price. In fact, when prices drop, you could use dividend income or fresh capital to buy more shares at a discount.

17 Dividend Increases, October 19 To October 23, 2015

Includes: ATR • CASS • CCLP • DOW • ENLC • GLP • GRC • HUB-B • HEP • KMI • MSM • NGL • OKE • PB • SCL • TRGP • VFC

Summary

• I track dividend increases for stocks in my watch list to identify candidates for further analysis and possible investment. 
• For dividend growth investors, regular dividend increases are important. Companies that regularly increase their dividends show confidence in future earnings growth potential.
• In the past week, 17 companies on my watch list announced dividend increases.

12 Dividend Increases, September 21 To October 16, 2015

Includes: CLC • CTAS • EV • GEL • IP • LMT • OGE • OHI • PAA • TOO • WEC • YUM

Summary

• For dividend growth investors, regular dividend increases are important. Dividend increases that match or exceed the rate of inflation are preferred.
• I track dividend increases for stocks in my watch list to identify candidates for further analysis and possible investment.
• In the period, 12 companies on my watch list announced dividend increases.

Monthly Review: September 2015

After spending 6 wonderful weeks with my parents, including an amazing cruise to Alaska on the Norwegian Jewel, I'm slowly catching up on my DivGro admin. Once again, my monthly review post is quite late – and less than a week away from needing to write another monthly review!

Compounding matters, I've been quite busy at work and things won't improve on that front until at least April Fool's day 2016! Fortunately, I love my work and wouldn't want to change what I'm doing at all! So, I'll just have to squeeze some time out of my leisure time to keep up with this blog!

Look for my Q3-2015 quarterly review in the next few days... first though, here's September's review.

Recent Buy: Exxon Mobil

Sep 25, 2015: Bought 35 shares of XOM at $73.27 per share.

ExxonMobil Corp. (NYSE:XOM) is the world's largest publicly traded international oil and gas company. Founded in 1882 and based in Irving, TX, XOM is engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. More than 80% of Exxon's earnings come from its operations outside the United States.

My buy price of $73.27 results in an initial yield on cost (YoC) of 3.99%.

Recent Buy: Philip Morris International

Sep 25, 2015: Bought 34 shares of PM at $81.27 per share.

Headquartered in New York City, Philip Morris International Inc (NYSE:PM) is the leading international tobacco company, with 7 of the world's top 15 international brands, including Marlboro, the number one cigarette brand worldwide. The company’s products are sold in more than 180 markets outside of the United States. PM was incorporated in 1987.

PM is a Dividend Challenger with a streak of 7 consecutive years of dividend increases. It pays quarterly dividends of $1.02 per share in the months of March, June, September and December.

Monthly Review: August 2015

In January 2014, I wrote a post on the balcony of our mini suite on the Norwegian Epic, en route to the Caribbean. My wife and I were celebrating our 28th anniversary by taking our first ever cruise as a married couple.

Last week we did our second cruise, this time an Alaskan cruise on the Norwegian Jewel. What an amazing experience! Alaska sure is a beautiful state! What made this cruise even more special is that we were accompanied by my parents and celebrating their 80th and 79th birthdays!

So, this post reflecting on August's portfolio performance is somewhat late...

7 Dividend Increases, September 7 To September 18, 2015

Includes: AIZ • ATNI • MSFT • O • PM • TXN • WPC

Summary

• I monitor dividend increases for stocks on my watch list of dividend growth stocks to identify candidates for further analysis and to make yield on cost adjustments for stocks I own.
• In the past 2 weeks, 7 companies on my watch list announced dividend increases, including 3 holdings in my DivGro portfolio. 
• Companies that regularly increase dividends show confidence in future earnings growth potential.

8 Dividend Increases, August 16 To September 4, 2015

Includes: BANF • BNS • EAT • HRS • ITC • NJR • SLH • VZ

Summary

• For dividend growth investors, regular dividend increases are important. Dividend increases that match or exceed the rate of inflation are preferred.
• I track dividend increases for stocks in my watch list to identify candidates for further analysis and possible investment.
• In the last 3 weeks, 8 companies on my watch list announced dividend increases.

Recent Buy: Apple Inc

This article originally appeared on The DIV-Net on Wednesday, 2 September 2015. 

Jul 30, 2015: Bought 22 shares of AAPL at $121.98 per share.
Aug 10, 2015: Bought 22 shares of AAPL at $118.43 per share.

Headquartered in Cupertino, California, Apple Inc (NASDAQ:AAPL) designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players. The company also sells a variety of related software, services, peripherals, networking solutions, and third-party digital content. AAPL was founded in 1977.