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+ | * CNR’s dividend at the turn of the century was 12¢. In January of 2024 CN’s dividend was $3.38. That’s 14.9% a year. Dividends are a big deal. As dividends go, so does the stocks’s price. CNR’s price went from $7 to $78. Our income doubles every decade of so. So does our capital. | ||
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{{why_dg_oct_2016.pdf|}} Dividend Growth Investing | {{why_dg_oct_2016.pdf|}} Dividend Growth Investing | ||
* How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' | * How can it be? How can a dividend increase affect the price of a stock? Especially if it's only a cent or two. It's unbelievably simple: an investment that produces more income becomes more valuable. Metro' | ||
- | January 2023- **Ask Your Adviser** - A Rob Carrick’s column in early January 2023 had the headline “Five things to talk with your investment adviser about after the sad returns of 2022”. I’ve been thinking about what Rob said. Rob is talking price returns. Most investors do. Over time, however, return on equities will track the sum of yield plus dividend growth. In the last decade, the CAGR (compound annual growth rate) of the 28 stocks I follow has been 8.79%. This is what really matters. ♦ My questions to ask your adviser, because of this, are quite different. First of all, I would not, and do not have an advisor. Advisors don’t have the answers. They are paid to peddle product and have no skin in your game. Most are not fiduciaries. An advisor should tell you that return has two parts: the investment return and the speculative return. The investment return, yield plus growth) is fairly stable, predictive, in fact. The speculative return fluctuates with human emotion. It is the speculative return that is falling. ♣ We could ask the adviser why they did not call in 2021 when the market was very high? Actually, I do not invest in the market. The market is a giant distraction for the business of investing. In the last major bear market, starting in 1964, the Dow was 874: in 1975 the Dow was 875. I do not buy index funds. | + | January 2023- **Ask Your Adviser** - A Rob Carrick’s column in early January 2023 had the headline “Five things to talk with your investment adviser about after the sad returns of 2022”. I’ve been thinking about what Rob said. Is a one year period enough to judge returns? Certainly not. Although total return was mentioned, |
♦ Did the advisor inform you inflation was about to increase and suggest you cut back on bonds (fixed income) and move more into equity with its growing income. A growing income makes a company more valuable and drives up its price. Actually, returns from equities, over time, make stocks safer. Safer than bonds, in fact. ♦ My retirement __income__ doubles every decade, on average: This means my capital will double also. ♠ In my view, advisor’s biggest error is not apprehending yield growth. As a result, an advisor does not know how to protect a portfolio. They are infected by modern portfolio theory. It’s just a theory and it’s wrong. Return, for instance, is not really related to risk. Return is more in the price you pay. Return, is the long run, tracks the sum of your initial yield and dividend growth. Price gains are driven by this increasing cash flow. Never buy a stock without knowing its ten year record of year-over-year earnings and dividends. The Connolly Report 2022 summary of dividend growth, year-by-year, | ♦ Did the advisor inform you inflation was about to increase and suggest you cut back on bonds (fixed income) and move more into equity with its growing income. A growing income makes a company more valuable and drives up its price. Actually, returns from equities, over time, make stocks safer. Safer than bonds, in fact. ♦ My retirement __income__ doubles every decade, on average: This means my capital will double also. ♠ In my view, advisor’s biggest error is not apprehending yield growth. As a result, an advisor does not know how to protect a portfolio. They are infected by modern portfolio theory. It’s just a theory and it’s wrong. Return, for instance, is not really related to risk. Return is more in the price you pay. Return, is the long run, tracks the sum of your initial yield and dividend growth. Price gains are driven by this increasing cash flow. Never buy a stock without knowing its ten year record of year-over-year earnings and dividends. The Connolly Report 2022 summary of dividend growth, year-by-year, | ||
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**January 2021 blog** inside this site (five pages): 20 year, year-by-year, | **January 2021 blog** inside this site (five pages): 20 year, year-by-year, | ||
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+ | “Facing uncertainty, | ||
* **Target date funds** bungle* up your retirement finances. How? Just as your equities become safer, before retirement via the build up of intrinsic value, target date funds automatically sell your stocks and buy more bonds. Just say no to target date funds. "As an investors time horizon lengthens", | * **Target date funds** bungle* up your retirement finances. How? Just as your equities become safer, before retirement via the build up of intrinsic value, target date funds automatically sell your stocks and buy more bonds. Just say no to target date funds. "As an investors time horizon lengthens", | ||
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- | Martin Mittelstaedt' | + | * |
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Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | Most investors do not know, let alone believe, that as the dividend rises the price of the stock will also rise. Think. If a company is throwing off more cash each year (dividends), | ||
* ETFs allow so-called ' | * ETFs allow so-called ' | ||
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Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | Linked just below is a rather good item (May 23 2011) about reasons to buy and hold dividend growth stocks: | ||
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- | * [[Fourth Quarter 2017]] Rob Carrick on dividend growth boosting a stocks' | ||
- | * [[First Quarter 2016]] Connolly Report since 1981...thirty five years | ||
- | * [[Fourth Quarter 2015]] Why dividend growth investors do better. | ||
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- | * [[First Quarter 2015]] - " | ||
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- | * [[Fourth Quarter 2014]] - You must construct an individual dividend growth portfolio | ||
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- | * [[Third Quarter 2014]] Link to a retirement investing column in The Economist | ||
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- | * [[First Quarter 2014]] - the essence of dividend growth investing | ||
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- | * [[Third Quarter 2013]] | ||
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- | * [[Second Quarter 2013]] - PBS Frontline - The Retirement Gamble - Dump your funds! | ||
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- | * [[First Quarter 2013]] - dividends provide most of the return | ||
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- | * [[Fourth Quarter 2012]] - a growing income, up 9.6% in 2012 | ||
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- | * [[First Quarter 2012]] - //Probable Outcomes// | ||
- | * [[Thoughts from 2011, '12 and '13]] | ||
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- | * [[Third Quarter 2011]] - observe comment titles below | ||
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- | * [[DGDPG2013]] - An example of how dividend growth drives price growth... | ||
- | * [[Falling Market]] - some thoughts in June 2012 | + | ——— |
* Living from dividends in retirement [[WSJ_May10]] | * Living from dividends in retirement [[WSJ_May10]] |