Value Investing News

Commitment is a word often thrown around, but rarely backed up with actions. Salesmen are committed to your needs until you sign on the dotted line - then they are committed to next unsigned contract. A true measure of character is how committed are you to doing right when the times are hard and you are tempted to go astray?

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Ned Davis Research examined the relative performances of stocks between 1972 and 2006 and established a link between rising dividends and superior long-term returns. The study found S&P 500 stocks that consistently increased their dividends returned 10.4% total return (dividends + share price appreciation), while those that did not increase their dividends returned only 8.2%.

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If your goal is to accumulate wealth for a comfortable retirement, then there is no risk-free path. Throughout time every angle has been tried and failed. Inherently, individual stocks will carry higher risk due to the lack of diversification when evaluated on a stand-alone basis.

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In one form or another, I get the this question, “What do you think of the market? Where’s it headed?” Normally, I politely respond as expected, but occasionally I will startle the person with a reply like, “I don’t know. For me it really doesn’t matter much.” My investing goals are not defined by movements in the market.

The goals of an income portfolio are much different than those of a capital appreciation portfolio. The good news is an income portfolio consisting of quality dividend growth stocks can not only succeed, but excel during a market downturn. Dividend investors are focused on building a stream of steadily rising income from solid companies.

To succeed as a dividend growth investor you must identify and purchase stocks with sustainable dividend growth. Put another way, targeted companies must be both capable and willing to grow their dividends. Obviously, we can not look into the future and see who will and will not perform.

I was amazed to find several companies on the champions list, which have raised distributions for over 50 consecutive years. The companies include: