While my dividend reinvestment program (DRP) doesnt go back nearly as far as yours (mine began in 1994/5), I faced the same situation. My cash flow didnt generate large sums and it was much easier to write a check for $100 - $500 on a quarterly then monthly basis. Mutual funds were used for 401k, college funds, and avenues.
After reading all these pages, I have come to the conclusion, along with the link to the Forbes article that my dividend stock picking was dumb (Forbes term). So, I am a member of a cult and dumb.
Now that has been settled...what do I do next? Options are:
1. Do nothing and hold on to the equities.
2. Sell out and invest in TSM(?) or similar fund.
Seriously...what should be done at this time? I am not really interested in selling the portfolio, but understand the issues presented here. My capital gains tax would be significant. Would that come into play?
No two people have identical needs, nor an identical portfolio, but as long as we're mentally sound we have the ability to learn and adjust to the best of our ability.
I started out with drip's and added an account with a full service broker in my home town, from whom I usually bought some of his recommendations when I visited for the holidays. In my career town I opened an account with a discount broker and initiated an IRA and bought and sometimes traded stocks there.
It wasn't until the fall of 2011 that I brought the majority of my drip's into my full service account and sought the advice of my new broker; when I transferred my accounts to my second career town. He made some sweeping recommendations, which would have cost me thousands in fees as well as thousands in LT cap gains taxes. That's when I started my research, which led me to this site, which has led me to over a dozen books and counting. Fortunately, for me, I've never listened to anyone's advice until I've researched it for myself. When I looked at the biggest move he recommended, I realized that the ER's were larger than the yield, so I never took his advice and ended up transferring everything to the discount brokerage.
At that time, I devised a three year plan to rebalance my portfolio. This allows me to keep my LT tax gains to a minimum each year, while adding to sectors where I had been underweight or non existent. I was severely overweight on (DRIP's) US Large Growth and Value and underweight bonds and foreign. So far my plan is working. I know what I need and what I will sell. I plan to always keep a portion of my original stock portfolio and it will find a nice place in my overall allocation. 90% of my div stocks are not high dividend stocks and I never sought to chase such things, it's just the way it was done when I started investing and when I was in career mode it never occurred to me to stop and research, so I was vulnerable to the noise which I often acted on.
This ridiculous, redundant redactment about chasing is lost on me. Both the Wellesley fund and the Total Stock Market index fund have a higher yield than many of the div stocks I'm trimming and I'll take that yield for my expenses as well, so it won't change the fact that I can live from the yield and keep the principal intact for as long as possible. I'll just be better allocated.
So Ed, in my opinion your answer is both 1 and 2. Keep your expenses and taxes low, while meeting your desired asset allocation.
"The stock market is a giant distraction from the business of investing." - Jack Bogle