My Path To And Style Of Dividend Growth Investing

by: Zachary Viscidi

Summary

Create a diversified portfolio with numerous monthly paying stocks and traditional DGI stocks.

Frequently capture and reinvest dividends in an ever-widening array of stocks.

Leverage new technology to avoid brokerage fees.

As a young, debt-burdened millennial, I was wary of investing. I didn't want to venture down that road of risk until I had paid off my student loans, established my career, and gotten a picture of my overall wealth. However, that misguided post-collegiate attitude got me 5 years out of college with practically nothing to my name. So, last year, I took the plunge and started investing small sums. Using the Apple Store app, Robinhood, I was able to make small purchases of different stocks without paying commissions or broker fees. Being rather conservative, I started with small, gradual investments in AT&T (NYSE:T) and Emerson Electric (NYSE:EMR). At the time, I followed several DGI contributors on Seeking Alpha, and I bought into the belief.

Although I enjoyed reading these articles, my major hindrance was a lack of capital. Many contributors extolled spending thousands of dollars on their portfolio advice. By contrast, my first purchase was for one share! This was followed by additional one-share purchases for the next several months. Simply put, my paltry teacher salary did not allow me to experiment much, and I could not fritter away my hard-earned money when I had more important expenses such as rent, insurance, and food.

So, like a squeamish child entering the cold ocean, I slowly emerged myself into investing. Each month, I would accrue a small balance of un-invested cash. Over time, this balance grew, but whenever it grew to the price of one share, I would spend it. But, like the child entering the ocean, I grew impatient and waded in too far. Instead of continuing with my strategy, I strayed into penny stocks. Quickly, I lost these funds, but I found something greater: knowledge. Instead of squandering these funds on long-shots, I started buying dividend stocks, a bevy of them: Dogs, REITs, BDCs, the undervalued and the overvalued.

And thus, my strategy became clear. With each infusion of capital, I have allocated a percentage towards the traditional DGI portfolio of Dividend Aristocrats and David Fish's CCC list.

However, another percentage has gone towards a variety of riskier, higher-yielding stocks with the intention of capturing a dividend on every single day of the year. I don't know if it is truly possible, but in one years time, I have made great progress towards this goal. The strategy is simple: buy and hold for long term while capturing and re-investing dividends in different stocks.

This strategy is only efficient when commission and fees are taken out, but I think it is a viable way to compound money at speeds that are far faster than possible with a traditional DGI model.

Long: AT&T and EMR

Disclosure: I am/we are long T AND EMR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.