Scott Lewis

Scott Lewis
Contributor since: 2012
Great recap. I also read this article and thought the same things. Buy and hold is still a powerful strategy.
Great article. Like many of the previous comments, I also have developed both a business plan and business model very similar to yours. Mine encompasses several different income streams of which DGI is just a part (also including 401k, FERS partial pension, medical coverage, etc). I also liked your strategic review chart. Coming from a similar background, I find this model very helpful in planning and problem solving. Having spent many hours on this site, I have observed that sometimes screening for fundamentals can sometimes overshadow selection of dividend companies that have a solid moat.
Can these funds ever match the S&P? Don't the 2050 funds still contain a small portion of bonds/cash. I agree with the sentiment of your article that for many investors, target funds are not the best option. If you understand how to put together a solid portfolio, then the DIY approach is much better. However, for some folks that don't have time or education, this gradual rebalancing as one gets older makes sense.
Great personal story. I got the dividend bug in 2008, put a plan together over a few months, and began investing in 11 different stocks in Jan 2009. It was the best investing decision I've ever made. The reinvestment options, low transaction costs, and superior market performance make it all worthwhile. Best of luck with your portfolio!
Thanks for the comment. I believe there is a strong correlation between economic moat and dividend growth investing. This style of investing is long-term and changes (add/sub a position) to one's portfolio do not happen all that often. From this perspective, I believe that an economic moat is very important. For me, a company should be actively defending and expanding its moat to maintain its health and dividend. In my opinion, corporate governance and smart management are elements of a moat. From this perspective, I believe the companies that you mentioned have very strong moats. Other elements of a moat can be patents, superior products, name recognition, etc. Does this help with your questions?
Bill byte,
That's an interesting ETF, thanks. You make an incredible point about moats. They are not forever or impenetrable. If a company wants to maintain it, they must innovate and create new markets.
Thanks for the story. Amazing that Xerox had leading computer technology and the connectivity and didn't understand the demand from the consumer. If they had, we'd probably be buying Xerox laptops. I wonder how this would have impacted Apple, too.
Hi there.
Great point. I believe there is a huge amount of evidence to prove your point. There have been many tech companies that have over-promised and under-delivered. The adoption of new technological tools can be hit and miss, especially with the examples that you provided. To your point, many people have made money on Amazon, but I could never invest based upon its fundamentals (high P/E and razor sharp margins), yet they succeed. Ebay would be in this category, too. WRT, IBM and INTC, I am long because of the points that I made in the previous comment. They're winners and re-define markets. Would it make any difference to know that Buffett recently made a huge purchase in IBM?
Thanks for the response. I agree that EK had tremendous competition in Fuji, but I still think that they had the keys to their future (digital photography in 1975) and just shelved them.
Regarding your question about tech, I concede that IBM and INTC don't have what you would call a classic moat. They have intense competition. However, they lead their markets and consistently create new ones. Each company has reinvented themselves (more than once) in the face of market disruptions. In that, I believe that they protect what moat they have and consequently why I am long in both. Their fundamentals are very strong, too, which helps a lot.
Hi Kevin.
Great first article. These days (post-pension era), I think developing various buckets of money is necessary. I fully fund a 401k, but also recently developed a taxable dividend portfolio. The zero percent concept is a great way to get people to wake up about risk. With time on my side, I hope to get to the same level as you by covering my needs at a 0% withdrawal rate.
Great article. I particularly enjoyed the genesis of your thought-process: TT. You make a great argument for diversification. Not to pile on with the other comments regarding 40 stocks being too many to manage, but have you thought about factoring in sector differentiation to bring down the number of stocks? The argument being that a disruption to to one industry such as utilities would not necessarily impact consumer staples or telecommunications...
I always enjoy reading your articles. I usually walk away with a new thought for how to view my own portfolio. Coincidentally, I began my DGP in JAN09. While I have a different collection of stocks (similar number) it mirrors your results for those years. I'm curious, though, do your gains outweigh the taxes you pay in selling a position? This would be a big factor for me. Similarly, does the yield on KMP outweigh the higher tax rate?
As a fellow DRIPer, I find that the style of reinvestment is dependent on the stage in life and the best use of my time. As a busy professional DRIPing is great. I set it and monitor. However, I am only four years into dividend investing. So, it is not worth my time to collect what amounts to about $1500 per year in dividends across multiple stocks and transfer agents just to squeeze a few extra dollars by reinvesting elsewhere. However, I can imagine that toward the end of my investing years, it will be well worth my time to personally direct where my five figure dividends are reinvested. Does this make sense?
Thanks for your insightful article. It is extremely helpful to read about new dividend-specific analysis. I’m a DRIPer for the long-term and appreciate looking at the impacts of dividend growth versus dividend yield – a highly debated topic in this forum!
One thing that I noticed in reviewing the performance of my investments from the past few years is the impact of flat or losing markets over gaining years. There is so much consternation over a losing market, but if you have a long-term view of the market then flat and losing years can actually super-charge your dividends. I’m not talking about dividend growth or yield, I mean you are buying more shares which, if you reinvest, accelerates your accumulation rate. Isn’t this a good thing? Does anyone know if there is more research into the impact to one’s portfolio for this point of view?