Dividends & Income Digest: Are You An 'Essentialist' Investor?

Includes: DE, GILD, OHI, PSEC
by: Robyn Conti


Every issue, SA explores a dividend and income investing topic.

Today, I share some concepts from the book "Essentialism" and talk about how I think they apply to dividend investing.

What should Seeking Alpha be tracking in the dividend and income world? Leave a comment to let us know. Or better yet, submit an article of your own.

As we say farewell to long, lazy, warm days and get ready for the brisker weather and pace of Fall, I wanted to share with you a book that originally wasn't on my summer reading list, but came into my life just when I needed it. It's called "Essentialism: The Disciplined Pursuit of Less" by Greg McKeown. The concepts he discusses are deeper than I have the bandwidth to cover here, but as the book's name implies, the basic premise is "less, but better."

In other words, essentialism is the process of editing your life to make room only for what truly excites and motivates you, and creating space for the pursuits you're most passionate about, where you can contribute the most value based on your talents and convictions. It's about eliminating what McKeown calls the "trivial many" and focusing on the vital few. Essentialism is living with intent, being your most authentic self, and saying "Yes" only to the things that matter.

The book resonated with me on so many levels, but especially because 2016 has been a year where I've been consciously shifting my mindset from one of obligation to one of intent, and finding ways to live more simply and true to myself. Being more of an essentialist might also give me the excuse I need to outsource tedious, trivial household chores like laundry, cleaning and grocery shopping (I'm half-kidding).

But then I got to thinking, could we apply the concepts of essentialism to investing? I believe the answer is "Yes." At times, investing comes with so much noise, so much turmoil, so much emotion. And as we've talked about many times here on Seeking Alpha, it's really not about any of that, but about a steady, consistent process that, when you strip out all of the human garbage, generally delivers positive results over time. As with anything in life, except death and taxes, there are no guarantees, and the past is no guarantee of future performance; but when you develop a process and stick to it, you're more likely to achieve your investing goals, thus creating the income and wealth you desire.

It sounds so simple, but being human, we complicate it. We listen to the talking heads on TV with their latest sensational gloom and doom prognostications. We allow our strategies to be derailed by short-term volatility and uproar (Brexit and the Fed's perpetual waffling, anyone?). We then inject our emotions into those decisions. And we take actions that may be contrary to our internal compass, our best judgment, or our original goals. That's when things really start to get ugly. Looking back, if you've ever made an investing mistake, you can probably pinpoint that error to a specific departure of your sanity, or at the very least, your common sense.

All this to say - and this isn't anything that hasn't been talked about in our community before, but I think it's an important reminder - we all know better. We know investing is more about the long game and keeping our heads on straight. It's about stripping away the noise and focusing on what made us get into those investments in the first place. Not that selling isn't an option - but it's worth a sincere gut check to make sure you really understand the reasons WHY you're selling.

I think dividend growth investors are pretty adept at tuning out the macro and market noise and sticking to a defined strategy. In fact, I think you all do it better than most. But it boils down to what's essential, and that's probably a little bit different for every person. And that's all about choice. Again, the decisions we make are unique to each one of us, depending on our temperament, risk tolerance and goals.

Essentialism author McKeown writes that "'less, but better' is an idea whose time has come." Today, we have so many choices and there's so much social pressure, not just in investing, but in all walks of life - and sadly, while we've been told we can have it all, we can't. Nor should we expect to. It just isn't humanly possible. I'm okay with that. Are you?

I think by choosing to focus your strategies on dividend growth investing and the steady stream of income it's designed to produce, you've planted your flag and declared how you intend to approach building your wealth. What's more, by sharing your strategies and ideas on Seeking Alpha, you're bringing your passion to the fore and making a truly valuable contribution. And that's very essentialist, indeed.

Now it's your turn to weigh in. Do you think essentialism applies to investing? Do you take an essentialist approach to your own portfolio? Have there been times when you've strayed from your core investing strategy and it's resulted in disaster? Did you know better, but did it anyway? What do you think of the "less, but better" idea, whether it applies to investing or other areas of your life?

And now, on to the week's Dividends & Income news and analysis:

Why I Sold John Deere by Eric Landis

Gilead Sciences: Stay Focused On Yields by Stone Fox Capital

Revamping My Dividend Growth Portfolio by Nicholas Ward

Omega Healthcare's Shares May Be About To Fall Off A Cliff: Here Are 3 Reasons Why That's Potentially Wonderful News by Dividend Sensei

Prospect Capital: Harbortouch To The Rescue by BDC Buzz

Like Buffett, This Dividend Growth Investor Digs An Economic Moat by Mike Nadel

Have You Put Your Dividend Portfolio Through The Risk Wringer? by Adam Aloisi

Why Valuation Matters To Dividend Growth Investors by David Van Knapp

Prospect Capital's Results For Fiscal Q4 2016 - My Assessment (Including Current Price Target) by Scott Kennedy

Is 3 Enough? How About 6? Re-Thinking A 10-ETF Portfolio by Dividend Sleuth

85-Stock Portfolio Review By Dividend Payment Month Groups, CCC Status, Moats And New Purchases by RoseNose

Omega Healthcare Investors: Still A Buy? by Casey Hoerth

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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