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Dividend Growth Investor
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I write about dividend growth stocks on my website I am mostly a buyer of high quality dividend stocks, with solid competitive advantages. My holding period is forever, as long as the dividend is at least maintained. I tend to concentrate my efforts on stocks... More
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  • The Biggest Investing Sin Exposed - Part II

    In part one, I started talking about the biggest investing sin exposed. This is part two of the series.

    My sample of three is not representative at all. These are individuals I have found through my browsing of the internet. If these individuals stick to their new found strategy for the next 20 - 30 years, I believe they will have high odds of succeeding. If they switch strategies however, I would be worried for them.

    For my strategy, I want to earn a certain dollar income say after 2018. Dividends are a more stable, and more reliable way of living off a portfolio. Since I receive cold hard cash every 90 days or so, which also increases every year, I am more likely to stick to my strategy. It is easier to ignore stock price fluctuations, when stock prices are flat or low for extended periods of time, when your expenses are covered by dividends. I would not want to be in a position to sell shares when I need the money, and shares are flat or down for extended periods of time. I know I would hate it, and I would end up watching and stressing out over meaningless price fluctuations. However, for some retirees in 1966 - 1982, stock prices went nowhere for 16 years. Between 1929 - 1954, stock prices also went nowhere. If you only rely on capital gains to bail you out, you risk running out of money when stocks are not in favor and their prices do not go up every year. You risk running out of money if you expect to sell 4% of your portfolio each year, it has a low yield, and stock prices are flat for extended periods of time.

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    Jul 15 9:42 AM | Link | Comment!
  • The Biggest Investing Sin Exposed

    One of the biggest sins in investing, is investing money without a clear plan or strategy to accomplish specific goals. This investing sin causes investors to chase unrealistic returns, and to abandon one strategy for the next when things get tough. A common trait of successful investors is identifying their investment objectives, and then devising a plan to accomplish those. The important part after that is patiently sticking to your plan even when things get tough. It is unrealistic to assume that any real strategy can deliver results that are always better than everyone elses, and can also generate consistent profits all the time. Investors who fail to understand this, end up abandoning strategies at their temporarily weak point, and then wasting precious years that could have caused the capital to compound and accomplish their goals.

    I believe that in order to be successful in investing, one needs to select a strategy, and stick to it for decades. This allows the power of compounding to do its magic. If you switch investing methods/styles every few years, because you chase what is hot, you are not going to let compounding do the heavy lifting for you. In addition, if you have high portfolio turnover, your compounding will be negatively affected, because you will be paying more in commissions, taxes and fees.

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    Jul 14 10:28 AM | Link | Comment!
  • Six Confident Dividend Stocks Giving Shareholders A Raise

    I love it when the stock market goes on sale, like it has been so far in the past two - three weeks. For aspiring dividend growth investors, this means that we are purchasing future income at discounted prices. When I acquire ownership stakes at discounted prices in quality companies like the ones I discussed last week, I get closer and closer to my goal of reaching my dividend crossover point sooner.

    I also like it when companies I purchased long time ago keep rewarding me with a higher dividend payment, year after year. It is amazing that just because I have had the foresight to identify and purchase a quality dividend growth stock, I end up receiving a passive income stream, which grows above the rate of inflation.

    In the past week, there were several companies that hiked dividends to their loyal shareholders. I isolated several of those which had raised distributions for at least five years in a row to present here:

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    Jul 13 11:09 AM | Link | Comment!
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