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Alpine Dynamic Dividend Institutional Message Board

  • mysonchino mysonchino Jun 25, 2010 6:48 PM Flag

    Be careful with gabux

    Many posters are considering selling advdx and investing in gabux. Gabux is not nearly as risky a fund as advdx has become but it is in no way earning a 14% dividend. Most of the dividend is simply returning your own money. Now, there is nothing wrong with that as long as you realize it. When we delude ourselves into believing we are receiving 14% or 26% is when things don't work out. The div of gabux will be reduced soon. Invest for earnings and earn, really earned dividends, not for a return of your own money. GL and keep searching. Try kmm, ppt wea or gdo if you want your NAV to remain constant and receive a nice dividend. GL.

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    • Thank you myson!!

    • Chino, I am simply amazed at the ignorance and disinformation commonly held and shared by so many posters on mutual fund boards. It happens more on active mutual fund boards than anywhere else, I think.

      You're completely right about GABUX. These people who are looking for unusually high dividend yields with safety are dreaming. I invested in ADVDX with full understanding of the risk of a dividend cut and as the fund declined in NAV it wasn't rocket science to figure out that either they would cut the dividend or drive the fund into a pit where the SEC would get involved. You saw that and argued your case well.

      For me I am quite content with the now current dividend. For me it is about an 11% yield and none of it is ROC. I believe that it is sustainable and whenever the economy recovers enough there could be a dividend increase. If there isn't, I am pleased with 11%. Since ADVDX is only one of my core holdings and is only 6.74% of my total portfolio I can live with such a massive dividend cut.

      Ths search for easy dividend money above 10% or so without a full appreciation of risk is foolish. GABUX is one example.

      • 3 Replies to fredkane3947
      • Well said Fred. I do think that Alpine is finally doing what is needed to have this fund be a viable investment. I don't own any now but would consider AOD at a discount and will be look at the advdx performance compared to the indexes over the next quarter.

        They did well when they started with a realistic distribution level and lower turnover and a lesser div capture portfolio. Thay could do well again. I hope so for all the people who own the fund. There is no reason not to have some of our portfolios invested in a dividend capture vehicle. It just has to be with in bounds and reasonable.

        When any fund is paying a 25% dividend you know in your gut that it is not real and something is wrong. 10% is a tough dividend to earn without unnecessary risk 25% is just nuts.

        As for gabux, I would not buy it. It is a high distribution and the NAv has held up because of the declining interest rate environment we have been experiencing for a long time now. When rates rise the NAV will drop and the div will be cut because rising rates and ROC will kill the NAV. But I am not commenting any further on gabux. I got enough people upset with me with advdx. GL.

      • I remember after ADVDX crashed in late summer of 2008. GABUX was where a lot of ADVDXers went. Us Alpiners were always trashing the Gab's utility freaks. But as long as the market was going up, we both didn't mind getting back some ROC . It's just Gab is straight-up about it, and Alpine kept denying it (as it kept selling after the ex-date prior to stock price recovery). But we both new this party would end (I just thought it would be late last Fall). Gab has a higher NAV, and because of it, had a lower yield, so I think it can wait a little longer before cutting. But it will eventually have the same darn problem. It's just ADVDX flew much higher and had much farther to fall.

      • davcot@att.net davcot Jun 25, 2010 8:46 PM Flag

        Barchart.com opinion for GABUX is a strong sell.WEA,recommended by Chino has a yield of 9.3%.Barchart opinion is strong buy.

 
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