Value Investing News

The primary focus of my income portfolio is to create ever-increasing income by investing in dividend growth securities. This means that often I will choose a lower yielding security with better dividend growth prospects over a higher yielding security. However, I will also invest in some high yield securities. Here are some of the better performers, along with my life-to-date return:

It is not unusual after I publish a list of stocks to get a comment or two asking why those stocks and not these stocks. Often the real thrust of the question is why buy those low yield stocks when you can buy these high yield stocks. The answer involves risk and its management.

Dividend investing is not about buying high-yield stocks to generate a high income. Instead, dividend investing is about finding solid dividend stocks that are reasonably priced and are expected to continue raising their dividends in the future. So, are ETFs and CEFs a good fit for this strategy?

Any investor that understands the merits of asset allocation also understands the importance of including an international allocation in their portfolio. To meet my set international allocation, I have focused on the following four areas of my overall portfolio:

One tactic to help manage the risk of a dividend cut is to limit your allocation in any single investment to a maximum of 5%. However, if the allocation is measured by market value, our portfolio may still be at significant risk of a dividend cut. Consider the following:

Once you know your investment risk profile, how do you gauge the risk of individual securities in your portfolio or your portfolio as a whole? I tend to weigh the risk on my portfolio as a whole and make adjustments through the selection of more or less risky investments. For my dividend stocks I look at these measures:

Most people would agree that an asset allocation should include a defined percentage dedicated to international investments. As a dividend investor, this has been one of the more difficult allocations within my portfolio. I have identified several difficulties in locating, acquiring and owning international stocks: