No guarantee that the Q will keep paying dividends when times get rough. Employees already have too much vested in the Q (their primary source of income in an area with only one major tech employer), so no need to hold on to so many shares as well for a crap yield. You'd be better off selling the shares in exchange for a rental property if you want yield
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The nice part about having multiple rental properties is that on weeks like this when the stock market goes up 250+pts on one day, and then gives back 200pts the next day, followed by another 136pts today is: it's the beginning of the month, in which I can count on those steady rent checks to be in my mailbox. Just saying.
@86371--from 86359: Agreed. As a rental owner, it's important to make sure you buy properties that can provide an income or hedge, regardless oF stock and bond market conditions. Ideally, you get your best return if you are willing to invest sweat equity. I've spent a lot of my copious free time between tenants cleaning crap off walls, painting, re-plastering walls, replacing plumbing, and refinishing floors. There are easier ways to save for retirement. I would suggest that the fastidious and those who think manual labor are beneath them sell their stock as soon as practical after it vests and diversify their portfolios.
And like I said, Qualcomm stock returns has been terrible recently... For reference.
NXPI in the last 2 years has returned 250%. Even more if you look 3 years out. Scrappy Cirrus Logic has returned 52% for the past 2 years. Scrappy Nvidia has returned 73% over the past year...And many other scrappy semi company that tanked year back. QC reached peak at 82, and all we've seen is the road down. Also, the likelihood of some of these smaller semiconductors getting acquired driving share price up is a far bigger possibly, since consolidation will happen in this industry. Shareholders of Altera, for example I'm sure a totally stoked. QC will never be an acquiree, always an acquirer. Same as intel. You missed the boat if left everything and didn't look at everything else that was trading at a bargain relative to QC, if semiconductor is your thing.
Rental real estate can be as good or as bad as you want them to be just like any other investments. The point is that anyone that cares about their future wealth would be wise to spread their risk across different asset classes. Real estate isn't for everyone. But concentrating everything on QC stock is a risky proposition. It's great when times are good. But when times are bad, you are putting your salary income and your safety nest stock/options all in one basket. If there's is a downturn, your stock is in the tanks and you are at risk at being unemployed all at the same time. If QC numbers are bad, stock tanks and then to make up for it, management will announce more layoffs. The bonus is employees that take moronic to the next level and use their own money to buy additional shares. Just ask all the ex-enron employees that put everything into enron stock. Not that QC is anywhere near enron. But can you digest a 20% correction in the stock price and digest possible unemployment at the same time?
Rental properties are a mixed bag. Write-offs against income are good; but there are a lot of costs associated with maintaining a place that people don't anticipate. And renters don't give a damn about your property. When the rental market is soft, you may barely break even after paying the mortgage, each month.
Samsung S6 is a big hit, estimated at over 50mil units for 2015. That is a 50mil unit lost to QC. The impact will show up in Q2 2015.That is probably a direct link to TSM's lower forecast.
Btw. We might not know what extent Samsung's damage is at this point. But some are taking precautions based on Taiwan semiconductor's recent profit warning. Either TSM is losing fab business to Samsung or their customer demand isnt as good as before. Or both. The company that fabs for QC is left as an exercise for the reader. Too much unknown for my level of risk. QC stock is in the toilet. Unlike other companies like NXP semiconductors. Which has absolutely crushed QC in performance. In fact, many of the previous laggards in semis are doing much better in returns over the past two years than qc, if you stop and look at it objectively versus emotionally
Lol. That 60-70% real estate appreciation due to the fed is almost like the appreciation you've seen in Qualcomm stock due to a favorable low interest rate environment that up until this point has encouraged more people to put more money into the stock market for higher returns. Once rates do go up, you can expect the stock market to correct much faster than the housing market, especially since most buyers these days are either cash strong or all cash with no hurry to sell. In fact I think we've seen what has happened to the stock market just this past two weeks on the mere mention of higher interest rates. Also add a surprisingly stronger us dollar into the short term and an unfavorable exchange rate for us companies that derives more than 50% of its earnings overseas, I think you have a bunch of companies that will come in light on earnings simply due to the exchange rate., assuming such tech companies didn't hedge against currency fluctuations. Add additional possible SOC losses at Samsung as they use more and more things from their LSI group, you are much braver to count on that near term QC stock appreciation all for that 2.5% yield. As for me, I'll minimize my risk in case the shit hits the fan.
Oh and to the other guy about amt
Even if some if us pay Amt in the teens , there are plenty of other ways to get much lower. If you aren't on w2. Been there done that.
people who make meaningful money don't worry about AMT. people who make meaningful money have effective tax rates in the teens. People who make meaningful money wouldn't even drive through a place like Mira Mesa.
I doubt people own tech shares exclusively for the 2-3% yield. But it's still free money from a steady patent royalty stream (at least til 2030 when 3G dies away), so no need to refuse it on principle. Especially from a company that is so overwhelmingly shareholder first. There are reasons to own every asset class. Not everybody wants to be a landlord, even if tax policy and monetary policy drive people into it, waiting for the greater fool to sell to later.
that 60-70% appreciation is thanks to the Fed. Not because the economy is better. Just pray they don't take your punchbowl away. Hard to leverage up when no more easy credit. God, I can't even imaging own section 8 in mira mesa. That's a meth lab waiting to happen.
BTW That 2.5% dividend still under performs that 30 year 3.75% conforming mortgage or 3% 15 year conforming loan (higher for conforming plus for north county homes ) which most if you youngsters will need to be able to afford north county since there is no way your pidly stock options is anywhere near some of us old timers especially after bending over and paying taxes on it.
Not that it matters to us that live in north county and dont have a mortgage on residential home or rentals for that matter. Just saying.
Talking about 2.5% qualcomm dividends is as moronic as talking about a 1%cd. If you were serious about dividend investment, you would be talking about the 4-5% that much more stable consumer staples company offers. Banking on any tech company for dividend is ridiculously stupid when tech companies are meant for growth and are volatile. We could also talking about section 8 housing in MM that would also yield 5.5% that would be pretty much be a goverment guarantee, much higher if you want to rent to non section8, and excluding 60-70% appreciation that has happened. We can also talk about all the write offs you can take on your 1040 verious your traditional schedule d dividend income that also would most likely push you into AMT making your effective tax rate on your earned income portion much higher. But since you probably aren't aware of all these things, chances are you dont make enough meaningful money , passive or earned, for these things to matter one way or the other. After all these are only real problems that some of us have (not that it is a bad problem to have)
Leverage up folks! The Fed QE game to prop up assets is in full effect. What could possib-lie go wrong. It's true there is no reason to be overweight in company stock. But good luck future landlords with that mira mesa crapshack. As long as there are still QC renters when times get rough, and property taxes don't rise dramatically, and CA still has water it'll be gravy train.