Learn about Dividend Paying Stocks

Dividends, dividends, dividends. It’s sounds great, and it certainly can be — buy solid blue chip stocks or dividend payer ETF’s, sit back and watch the dollars roll in.

dividend coins reversed

So what’s the problem?

Dividend stocks do NOT offer protection of your principal. Why is that a problem?

Because the reality is most people have trouble sitting back and watching investments lose value every week or even every day, which happens during bad bear markets even if you are invested in blue chip dividend payers for your retirement income.

Between 2008 and 2009 dividend “royalty’ suffered along with the S&P 500. Some companies even went bankrupt. Have a look.

“Blue Chip” Dividend Payer Great Recession Peak to Trough Price Change
AT&T -43%
Exxon -39%
Eastman Kodak -93%
IBM -47%
Coca Cola -43%
Proctor & Gamble -42% -42%
Washington Mutual -100%
SDY* -59%
* = Basket of Dividend Paying “Royalty.” So much for Diversification.  

Eastman Kodak stock never recovered and eventually went bankrupt. It’s stock trades at around $0.20 per share in 2016.

Washington Mutual was largest bank failure in American history. More huge bankruptcies were on the way (Merrill Lynch, AIG, GM, etc.) when the US government began to intervene. Oops!

So for this risk, what did this portfolio pay out in income return pre-crash? About 3.5%.

If you put $10,000 into each of the above “Blue Chips” you collected about $280 a year in dividends, but the value of your $80,000 portfolio dropped by a whopping -$47,200 during the Great Recession. Could you have really watched your portfolio drop -59% in less than a year and not decided to sell to protect what was left?

What if you were retiring in the next two years? At what point would you have reacted and stopped the bleeding? If you are like most people, it would have been around the -40% to -50% down when many retail investors sold in 2008 and you would have crippled your retirement forever.

Don’t misunderstand – high quality dividend paying companies can be a good solution. But are they the best solution for YOU?

Ask yourself if you would have been happier earning 3% – 5% income for that same $80,000 investment, but without risking your investment in the stock market? What if that 3%-5% was highly likely to increase in the future?  That’s a fixed index annuity. Learn more about fixed and fixed index annuities by CLICKING HERE.

Questions? Ask a question with the contact button or the form at the top right.

CLICK HERE to have a planner help you find an income solution that fits your lifestyle and supports the goals that are important to you.

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Investment Management

For ACI, investment management begins with understanding and actively managing risk for our clients and partners.  We do this through smarter investments built on low cost, highly liquid and diversified investments rather than expensive financial products.


Understanding the needs of investors seeking stable results for portfolios greater than $500,000 is a core strength of ACI.  One of the most important things we do is help your investments to create stable income while generating sufficient growth to meet your future demands and the needs of those you care for. 

ACI uses customized planning and software to create retirement income plans to meet the specific needs of each of clients while providing confidence, flexibility, and cost efficiency.


Success in any endeavor comes from hard work, vision, and planning. We can help you create a more confident future by working with you, your CPA, your tax and estate counsel to make sure that when the tomorrow becomes today, you are where you want to be.

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Market Income

This portfolio invests in a basket of highly liquid Index or Sector securities and sells off atypical returns in exchange for a premium on a rolling basis. That’s a fancy way of saying we take the bird in hand and let someone else have the two in the bush.  We buy sectors that are undervalued relative to the rest of the market or vs. their historical value ranges which reduces downside risk vs. the broad market.  Typically out-performs in bear markets, neutral markets and mild bull markets, and under-performs strong bull markets.

Core Equity

Invests in diversified components of the financial markets and broad economy by targeting sectors which demonstrate the greatest potential for a consistent range of multi-year returns, while offering a risk adjusted investment profile equal to or lower than the broad markets.  Our research tells us which sectors demonstrate the greatest potential for consistent multi-year returns while offering greater risk efficiency than the broad markets.  We invest on an “Outcome Oriented” basis – meaning we have a good idea what the returns over time will be at a given purchase price.

Durable Opportunities

This portfolio invests in companies possessing a Durable Competitive Advantage.  Such companies are likely to be around for decades, easing the concern of principal return.  DCA companies often suffer less in bear markets and usually lead recoveries.  These companies allow ACI to build portfolios with minimum expected returns that can be in the mid-single digit range over any 3-5 year period which can provide long term stability partnered with long term growth in equity.

Full Cycle

This portfolio is derived from the ground breaking work in ‘risk parity’ by Ray Dalio, arguably one of the top 10 money managers in history and founder of Bridgewater Associates.  The Full Cycle portfolio is built on the allocation models Ray designed to provide the highest potential risk adjusted returns possible through all phases of the economic cycle.  Bridgewater’s “All Weather” fund was designed for pension funds and other large institutional investors that needed to earn stable returns with stable risk, and has been closed to new investors for years.  At the time the fund closed, the All Weather Portfolio had a minimum required investment of $100 million.

Equity Builder

This is a risk management overlay which helps build and protect accounts by collecting small premiums against held positions on an opportunistic basis during correcting markets through synthetic “short” positions.  EQB seeks to collect an extra 2% – 5% per year against the cost of underlying investments.  While primarily targeted at increasing account equity, EQB gives an extra layer of protection to capital during periods of higher volatility.

Fixed Income

Diversified, broad exposure to fixed income ETFs and best of breed no load funds including core fixed income components such as Government, Corporate or MBS, municipals, and unconstrained “Go Anywhere” funds.

Investment Team


Dak Hartsock; Investment manager with over 15 years of experience with securities & securities options. Dak has worked full time in the financial markets since 2007. He has more than a decade of operating experience as a business owner & developer. He is a graduate of the University of Virginia.

Robert Hartsock; MBA. Bob has over 30 years of senior management experience in diverse markets, products and businesses. He brings an exceptional record that includes management roles in two Fortune 500 companies and leadership of 7,500+ employees. Bob’s career features a specialization in identifying and fixing management and operational problems for multiple companies including leading over a dozen acquisitions, private placements and a public offering. He is uniquely positioned to provide ACI with highly relevant C-Level management perspective. Bob provides operational & macro perspective on investments ACI undertakes for client portfolios. Bob holds degrees from University of Illinois and University of Washington.

Process Portfolios is a dba of ACI Wealth Advisors, LLC.

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