Well, my patience has paid off. I have been waiting for the price of T to retreat from the levels that I sold it off last Thursday. Today, it has dropped precipitously. Although it may continue the slide, I have to make a decision to buy at some point. I had a limit order placed for $34.28 since the beginning of the week, and it hit and placed the order for 973 shares at $34.27.
I am now in at a better price than I was last week, and I also have 9 more shares(973) than I had (964). The price may continue to fall, but I cannot prevent that. What matters to me is that my total number of shares keeps going up, and I have $16.82 more than I had in yearly dividend income even if I cannot make a roundtrip on my strategy.
As soon as the purchase was made, I placed a limit order to sell at $34.66 which is 1.14% or 39 cents above my purchase price which puts me right on track. In order for my strategy to work, I must be willing to not only buy but also sell. Compounding of the profits works whether it is 3.5% per year (paid in quarterly installments) for 30 years or 1% per trade over 500 trades. As long as I roll the previous profit into new shares and pick up more shares on the next purchase, the strategy will work.
There may come a time where I get popped and get locked into a (bad) trade, but I will have more shares that are earning more total dividends than I did on the prior trade. That is a very possible outcome, however, it is just as likely that the stock will trade for a profit that I will gladly book.
We will see how it goes. Nevertheless, the trade has been made and hope springs eternal. For good or bad, I am going forward with my trading strategy as well as my dividend reinvestment plan. The only issue I have with the strategy is that I have to wait for the funds to settle so that more trades can be made. Because of that, many opportunities that come my way cannot be realized. I guess there are tradeoffs in every strategy. Regardless, I am plowing forward in my quest.
Any thoughts will be greatly appreciated. Good luck to all.
Robert the DividendDreamer