Here is what I said I would do in the earlier post": " My AGD re-entry point is $9.25, although I'll fine tune that based on how things go. I'll be looking for similar pattern as the left of the graph for reintry - Red line above green, red candles turning to green, all candles below the green. A Doji or two to signal the market has beaten AGD down enough again.I'll probably have to wait 2-3 months for this reentry point. "
The recent market hammering because of the Goldman-Greece-Euro hysteria whacked the price down to below my buy point of $9.25. I'll wait to see if there is any permanent downtrend here, but look for a reentry at $9.00, instead of the $9.25 that I thought it would reach. I'm also only having to wait a month, rather than the 2-3 months I predicted. So I only lose out on one month of AGD dividend if I get in before the 15th. (AGD pays monthly, at the end of the month, based on your holding on the 15th).
ADG is a closed end fund, which according to the experts, often means it trades above Net Asset Value (NAV). In theory, this means it can be hit harder than other stocks by retrenchments, but it also means it may bounce back quickly.
Taking capital gains in income funds is part of our strategy at Daily Income for Life, although buying AGD was done originally for the pure income potential. At $9.25, AGD pays 14% p/a, which is not as good as it my initial purchase of AGD when it was paying 26% p/a, but its still a healthy income ETF to own.
In todays market, with even the stock exchanges uncertain whose computers screwed up to cause Thursdays panic, buy and hold is appears to be a completely outdated way to be in the market. By buying mainly dividend stocks that pay 10% p/a, we are hedging market volatility to a certain extent. Reinvesting the dividend month helps cost average out the price of the shares you own.
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