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The Blueprint for Successful Dividend Investing

August 16, 2017 – Comments (0) | RELATED TICKERS: JNJ , KO , PEP

Dividend growth investing is one of the most straightforward and powerful ways to build long-term wealth. It can also seem highly complicated to those without experience in this investment strategy.  [more]

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Dividend Growth Investing Promotes Long-Term Thinking

August 10, 2017 – Comments (0) | RELATED TICKERS: MO , SKT , JNJ

Dividend growth investing encourages long term buy and hold investing. With dividend growth investing you buy a company with a rising dividend at the right price, and you then hold on to it for as long as the dividend is at least maintained. You ignore all the noise out there, and keep holding.

If you keep your emotions in check, you may find yourself holding companies for decades to come, while enjoying rising dividend income. This passive approach keeps investment costs low, which means that you get to keep your fair share of investment returns. It is easier to practice dividend investing through the difficult times, because you are getting paid to hold the worlds best quality companies.

With dividend growth investing, all we do is buy future income streams. With every $1,000 that I invest, I end up generating $30 - $40 in annual dividend income. This income can be used to pay for my expenses in retirement. If I earned $20/hour, I am essentially buying back 1.5 - 2 hours of freedom with every $1,000 invested. The goal is after several years of saving and investing, to replace your paycheck with the dividend income from your portfolio  [more]

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Ten Companies Rewarding Shareholders With Regular Dividend Increases

August 07, 2017 – Comments (0) | RELATED TICKERS: HSY , K , WFC

As part of my monitoring process, I review the list of dividend increases regularly. This helps me to monitor the performance of companies I own. It also helps me to identify promising companies for further research.

I typically focus on companies that have raised dividends for at least a decade. I rarely violate this principle, but when I do, I have found out to have mixed success.

I also evaluate trends in earnings, dividends and look at valuations in order to determine whether a company is worth researching further today.In general, dividend growth investors want to acquire shares in a quality company with a long record of annual dividend growth, which also sells at an attractive valuation. The goal is to invest in such a company that can grow earnings over time. This provides the fuel behind future dividend increases, which pay for expenses in retirement.

Over the past couple of weeks, there were several notable companies raising dividends to shareholders. The companies include:  [more]

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Investing in the Dividend Champions from 2007

June 22, 2017 – Comments (1) | RELATED TICKERS: BAC , BRK.B , IVV

Imagine if you had $1 million dollars at the end of 2007. You decide to invest this money in the list of the original dividend champions companies. How would you have fared if you had invested that money in the dividend champions  almost a decade ago?

I have thought about the answers to this question many times. A few weeks ago I decided to start doing the work to answer it for myself. I always enjoy doing the hard work myself in order to form my opinions.

I used the information from David Fish and Robert Allan Schwarz in my data gathering phase. I wanted to determine how a passive investor in the original dividend champions from late 2007 to early 2008 would have done.

I was also inspired to do this research after observing those who always try to scare people away from dividend investing. The usual scare tactic involves mentioning one instance of a dividend cut, from the worst time for dividends during the 2007 – 2009 financial crisis, in order to trigger feelings of irrational fear. This low probability event is used to scare people away from dividend investing. Somehow, these doom and gloomers tend to focus on a once in a lifetime level of dividend cuts which has happened only during major financial collapses in 1929 – 1932 and 2007 – 2009. Otherwise, they do tend to ignore the 95% of the time when dividends are either up or flat for the year in aggregate.

I decided to accept the challenge, and offer proof that dividend growth investing works wonderfully even during a period that was extremely challenging for almost any strategy.  [more]

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The Real Risk With Dividend Growth Investing

May 25, 2017 – Comments (0) | RELATED TICKERS: CLX , UL , BF-B

There are risks to many strategies. Some risks include permanent impairment of capital, due to an investment that ends up going to zero. Some companies would usually cut or eliminate dividends a long time prior to going under. This usually serves as a last warning sign to long-term investors like myself that something is broken in the business. But dividend cuts are not the biggest risk to dividend growth investing. This is not the risk I will discuss today.  [more]

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