Cold Calling Approaches

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Nov 10, 2006 5:26 pm

I've never cold called but I'm interested in incorporating it into my daily regime. What are the scripts or approaches that you seasoned vets use?

Nov 10, 2006 6:03 pm

Well for what it is worth....Hello is this the Simpson residence?  Ma'am the reason for my call ....I've stopped by your home 3 times in the last 6 months and haven't reached anyone.  I thought I would leave a message introducing myself and what I do. I would like to ask you a simple question. Do you and your loved ones work with a retirement specialist?  Yes...great...with your okay may I call and give you an Idea from time to time just to stay in touch. Yes ...great...by the way we have a stock with a history of rising dividends we have just upgraded today.  Do you own dividend paying stocks...such as a local bank or utility.  No...well let me send info to you..if YOU have more questions stop by or call..I'd be glad to answer any questions you might have.  Take care. They go into my system as a prospect with broker...will call every two months..with a sprinkle of a new issues as we go along. 

Nov 10, 2006 6:58 pm
bspears:

Well for what it is worth....Hello is this the Simpson residence?  Ma'am the reason for my call ....I've stopped by your home 3 times in the last 6 months and haven't reached anyone.  I thought I would leave a message introducing myself and what I do. I would like to ask you a simple question. Do you and your loved ones work with a retirement specialist?  Yes...great...with your okay may I call and give you an Idea from time to time just to stay in touch. Yes ...great...by the way we have a stock with a history of rising dividends we have just upgraded today.  Do you own dividend paying stocks...such as a local bank or utility.  No...well let me send info to you..if YOU have more questions stop by or call..I'd be glad to answer any questions you might have.  Take care. They go into my system as a prospect with broker...will call every two months..with a sprinkle of a new issues as we go along. 



Personally, I've never understood the attractiveness of dividends.  It seems to me that cash dividends are nothing more than forced liquidations (without a transaction charge) that create a tax liability  (even if no profits existed.)  I've never understood why people get so excited about having their own money handed back to them.

Nov 11, 2006 7:40 pm

mkttsystms:


Here's a research project for you, to show you the importance of dividends: Go back 50 years, for the S&P 500, and find out what percentage of average annual returns were contributed by dividends.


If you're going to work with HNW clients and/or retired clients, you had better get up to speed on the benefits of dividends.

Nov 11, 2006 9:49 pm
mktsystms:
bspears:

Well for what it is worth....Hello is this the Simpson residence?  Ma'am the reason for my call ....I've stopped by your home 3 times in the last 6 months and haven't reached anyone.  I thought I would leave a message introducing myself and what I do. I would like to ask you a simple question. Do you and your loved ones work with a retirement specialist?  Yes...great...with your okay may I call and give you an Idea from time to time just to stay in touch. Yes ...great...by the way we have a stock with a history of rising dividends we have just upgraded today.  Do you own dividend paying stocks...such as a local bank or utility.  No...well let me send info to you..if YOU have more questions stop by or call..I'd be glad to answer any questions you might have.  Take care. They go into my system as a prospect with broker...will call every two months..with a sprinkle of a new issues as we go along. 



Personally, I've never understood the attractiveness of dividends.  It seems to me that cash dividends are nothing more than forced liquidations (without a transaction charge) that create a tax liability  (even if no profits existed.)  I've never understood why people get so excited about having their own money handed back to them.


Obviously, you still haven't arrived at a logical understanding.

Nov 12, 2006 5:56 am
doberman:

mkttsystms:


Here's a research project for you, to show you the importance of dividends: Go back 50 years, for the S&P 500, and find out what percentage of average annual returns were contributed by dividends.


If you're going to work with HNW clients and/or retired clients, you had better get up to speed on the benefits of dividends.



When a cash dividend is paid, the price of the stock is reduced by the value of the dividend.  People have the mistaken impression that dividends are "new" money.

For a person who needs income, the benefit of the dividend is that it allows them to liquidate a small portion of their holdings without incurring transaction fees.

Nov 12, 2006 5:58 am
My Inner Child:

Obviously, you still haven't arrived at a logical understanding.



I have yet to hear a logical explanation. 

Nov 12, 2006 11:42 am
mktsystms:
doberman:

mkttsystms:


Here's a research project for you, to show you the importance of dividends: Go back 50 years, for the S&P 500, and find out what percentage of average annual returns were contributed by dividends.


If you're going to work with HNW clients and/or retired clients, you had better get up to speed on the benefits of dividends.



When a cash dividend is paid, the price of the stock is reduced by the value of the dividend.  People have the mistaken impression that dividends are "new" money.

For a person who needs income, the benefit of the dividend is that it allows them to liquidate a small portion of their holdings without incurring transaction fees.



If this is the case then why doesn't the stock price of all dividend paying stocks eventually go to zero?

Nov 12, 2006 12:14 pm

Maxstud:


If this is the case then why doesn't the stock price of all dividend paying stocks eventually go to zero?
-------------------------------------------------


Good point, Maxstud!


In fact, the only time I would disagree that a dividend should be paid, is when the company's internal rate of return is much higher than that I could obtain by reinvesting the dividend in something else.


For example, if the CEO can earn the company 18% by reinvesting an amount of earnings that otherwise would be paid-out as dividends, I say keep the money and avoid paying dividends. By "reinvesting", I mean either stock-buybacks and/or use as capital to operate or buy other businesses.


However, if the company's internal rate of return is much lower than say, a bank CD; then give me the dividend and let me do my own investing.


The most noticeable example of a company not paying a dividend and doing a good job of using its earnings to grow the company with an internal rate of return much higher than that which could be obtained by its investors, is Berkshire Hathaway (BRK.A) (BRK.B). Interestingly enough, its stock price does not keep up with its internal rate of return, making it an attractive stock to own and hold for the long term.


(Disclaimer: My clients and I own Berkshire stock. It may not be right for you or your clients. Do your own due diligence and make your own decisions. And for G*d's sake, don't blame me if it blows-up on you!)


Nov 12, 2006 12:44 pm

Nicely said Doberman. That was one of the more succint yet sufficient

explanations I've heard of when a dividend payment makes sense. Also,

mktsystms, you may want to check out Jeremy Siegel's The Future for

Investors
. It makes a pretty good case for investing in dividend paying

stocks. Also, please note that the payment of a dividend doesn't

necessary mean return of capital to the investor. Obviously, the dividend

can be reinvested to purchase more shares. As such, it's a built-in form

of DCA that allows the investor to take advantage of the inherent volatility

in the stock price. In fact, try running a hypo on an investment that

returns an even 10% a year (all in stock price appreciation) vs one that

averages 10% a year (made up of a consistent 4% dividend, and a

fluctuation in stock price that averages out to 6% a year). Over a long

enough time frame, you'll end up with a sizable amount more money in

the stock with dividend payments and price volatility. That's the magic of

dollar cost averaging.

Nov 12, 2006 12:45 pm

Edit: "succinct"

Edit 2: Include paragraph separations and indentations wherever you see

fit.