Value Investing News

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Compound interest is what occurs when interest previously earned is added to the principle and is considered when calculating future interest – i.e. earning interest on interest. So, what’s more powerful than compound interest? Compound dividends! Compound dividends are like compound interest on steroids – you are not only earning on reinvested dividends, but the dividend rate is increasing.

A photograph captures a moment in time. Seconds after the flash dims a tree could have fallen on the object of the photo or the sad looking man in the photo could have been told he just won a million dollars.

Over the next several weeks I plan to look at different sectors that have traditionally been very friendly to dividend investors. Each of these sectors have attributes that make the companies in them potentially desirable to long-term buy-and-hold dividend growth investors. Understanding these attributes will hopefully help us to select the very best companies for our income portfolios.

Readers of this space know that the primary focus of my investing efforts is to build an ever-increasing income income stream 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. As one that values diversity, I also invest in some high yield securities.

As dividend growth investors we understand the danger of focusing on high yield alone. Many, if not most, high yields are simply not sustainable over the long term. However, we often turn our heads to what can be an equally dangerous metric – high dividend growth rates. Like high yields, high dividend growth rates often are not sustainable.

Some of the best dividend stocks provide investors with the right to share ownership in some of the best managed companies in the world.Those companies are characterized by solid competitive advantages and products or services which have lasting pricing power.They generate enough cash flows to not only invest back in the growth of the business but also to share the prosperity with shareholders by

With all the other investment strategies out there, why should investors consider dividend or income investing? There are a multitude of reasons to follow a dividend growth strategy. These include: investment stability, security of cash, continuous feedback, potential higher returns, low maintenance, et. al.