Buy at $9, Sell at $12 - Rinse, Wash, Repeat

I don’t set too many rules when investing. I believe that a good deal is more important than a good metric. However, I do stick to a few rules when purchasing dividend income:

I only buy yields greater than or equal to 7% No more than 20% of my dividend portfolio in one stock I set target sell prices and I sell at those prices no matter what

Rule #1 is easy to follow, but #2 and #3 can be tricky. This is because if your stock appreciates too much, it can appreciate you out of rule #2. However, you can use #3 to keep #2 in check by setting a sell price and sticking to it.

For GAIN, I set a sell price at $12.00. When I started buying it around $9 in early 2017, I thought it was a great deal. It was yielding 8.53% and paying it monthly. Additionally, they threw in a “special” dividend now and then, increasing the yield even more. Also, they had been paying a monthly dividend since 2005. High yields can be scary, but if you pair that with a special dividend and a track record of consistent dividends and increases, that is a good indicator that these guys and gals know how to succeed.

But why $12? Well, it represents a 33% increase. The stock market averages 8%, so anything over 15%, I feel, is a safe sell. The reason I hold onto my dividend stocks past 15% is because when you sell off shares, you lose the income. I am specifically buying these for income, so that is why I will usually hold onto these for longer than usual.

According to my brokerage account, I first purchased GAIN on a warm spring day in April of 2017. On the 3rd, I purchased at least 521 shares for $9.06 each. On the 5th of April, I purchased at least an additional 308 shares for $9.00 each.

I sold these on August 16, 2018 for $12.01. Here is what has happened since: