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fourth_quarter_2015 [2015/12/13 09:47] tom |
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+ | ==== Fourth Quarter 2015 ==== | ||
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+ | * What does the market value in most cases depend upon? (answer below on this page) | ||
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+ | • The main reason dividend growth investors run our own income ' | ||
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+ | * “The classic 60/40 balanced portfolio is not true diversification. Indeed, one of the best-kept secrets of the investing community is that stock market return so dominates the risk of a 60/40 portfolio that the portfolio exhibits a 98–99 percent correlation with stocks!” Rob Arnott | ||
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+ | ---- | ||
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+ | from Connolly Report front page, December 2015 (next issue March 2016): | ||
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+ | ♦ 12% A Year - “A Canadian Steady-Eddie portfolio” was the headline of the Nov 12 2015 Number Cruncher column in the Report on Business. Morningstar' | ||
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+ | **Answer**: According to Ben Graham in his 1934 book Security Analysis (Chapter 7), the market value in most cases has depended primarily upon the dividend rate. Don't believe it? You will have trouble being successful at investing. Why? You will be depending upon someone else buying your piece of paper (stock) at a higher price. A stock which does not pay a dividend has no intrinsic value. Don't believe it. That's your problem. Sorry. The dividend rate is initial yield plus dividend growth. This is what builds wealth. Would you purchase an apartment building in which the tenants do not pay rent? | ||
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