I admit I'm new at this but if I buy 1000 shares of AOD for an income portfolio towards additional retirement income and don't plan on selling it for a very long time if ever, how is this a bad investment in this 1 % Bank rate times.
i buy aod also with arr, gaucx, buying aod now @$4-5 yes is a lot safer than $20.00 already passed.. but i watch my stocks daily because thats my job now, and i average 13.8% on 500k havent touched principal in 3 years!! since i retired and when the move is right i buy 1/4 shares divis..... at the end xdividend dates ((low )) of rso, cys, ivr, then resale at my buy price, go back to monthly!!! but i am retired and have beautiful veiw from my san diego home.
The correct response to your question is not how much AOD has declined from IPO because your purchase price is about $4.50. I believe AODs net asset value hit bottom in May of this year. Since then AODs NAV has risen slowely and for the last eighteen months AOD has generated more in Net Investment Income than it is paying in dividends. Whether the NAV takes a dip in the future depends on whether Alpine Woods can eliminate the losses it has taken on tranactions it makes to capture dividends. Based on the trend in NAV it appears they are not doing that now but only time will tell. At the current share price your downside is limited as long as NAV remains stable and future financials continue to show NII higher than monthly dividend. The problem with tracking AODs performance is that it only reports financials every six months. That enables a lot to go wrong before you find out about it. I despise Alpine Wood Management but my evaluation is based on the current financial position of the fund and prospects for the future. Never buy anything for a long time. Buy and hold it only as long as it performs up to your expectations.
You might be better off buying something like VZ which pays a 4.5% dividend which will grow over time or CTL which has a 7.3% yield and also has grown their dividend over time. If the account is not an IRA you can buy an Master Limited Partnership such as LINE or MMP or KMP or EEP which yield over 5% and grow dividends every year. But you need to do some research because MLP dividends are not dividends they a return of capital which gets special tax treatment.
rlaimbeer: AOD continues to have the problem that it always had since IPO.
When the general market drops. It drops more
When the general market rises. It rises less.
Since AODs assets are tied to the same underlying companies this is a crippling AOD and has for 6 years now.
Doesn't matter whether you plan on selling it. At the rate AOD is burning thru its capital, it MAY disappear in a few years. Its a terrible fund for retirees because its high up-front dividend masks potential problems for shareholders down the road. You don't want to be 80 and find out this abomination of a fund is almost worthless. Hard to get a job then. LOL
Have you seen how AOD dropped from $20 to about $4.50 since 2007?
BTW, I'm NOT new at this. Long time prudent investor.