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dividend_growth_strategy [2021/02/04 21:50] tom |
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====== The Dividend Growth Strategy ====== | ====== The Dividend Growth Strategy ====== | ||
- | It’s the future cash flow dividend growth are interested in. We want Our cash flow to be sound and growing. And we have discovered that as the dividend grows, the price grows also. Here is one example. | + | It’s the future cash flow dividend growth |
- | In 2000, CNR’s dividend was 12⊄. As I key this in February | + | |
+ | Here is one example. In 2000, CNR’s dividend was 12⊄. As I key this in February | ||
{{ logo.png|Logo}}When they are at least fairly priced, I purchase certain common stocks with a long record of dividend growth and hold them for years, waiting for the dividend and the yield to grow. In the long run, yield provides most of the return. I also use yield, mainly, to determine value. A stock with a low yield and high dividend growth, for instance Alimentation Couche-Tard, | {{ logo.png|Logo}}When they are at least fairly priced, I purchase certain common stocks with a long record of dividend growth and hold them for years, waiting for the dividend and the yield to grow. In the long run, yield provides most of the return. I also use yield, mainly, to determine value. A stock with a low yield and high dividend growth, for instance Alimentation Couche-Tard, | ||
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But...and it's a big but...do you have the patience to wait years for the dividend to grow? Can you control your behaviour and resist buying 'story stocks' | But...and it's a big but...do you have the patience to wait years for the dividend to grow? Can you control your behaviour and resist buying 'story stocks' | ||
- | • **Time-Horizon Arbitrage** – We are heading into another long bear market. But don’t be concerned. The last long bear marker was in the 1970s. In 1984, luckily, I encountered dividend growth investing. The gentleman who wrote the letter to the editor of the Financial Times of Canada I happened to read, retired in 1968. His simple portfolio did unbelievably well all through the 1970s and into the eighties and beyond. Over the same period, the market did not do well. Warren Buffett did very well in that period too. From 1975 to 1982, Mr Buffett' | + | • **Time-Horizon Arbitrage** – We are heading into another long bear market. But don’t be concerned. The last long bear marker was in the 1970s. In 1984, luckily, I encountered dividend growth investing. The gentleman who wrote the letter to the editor of the Financial Times of Canada I happened to read, retired in 1968. His simple portfolio did unbelievably well all through the 1970s and into the eighties and beyond. Over the same period, the market did not do well. Warren Buffett did very well in that period too. From 1975 to 1982, Mr Buffett' |
♣ Contrast the above ideas with indexing: large portfolios with a fair number of losers (non-dividend payers and high yielders) and poor income growth. “The crux of your success”, Stephen Jarislowsky says, “will be to select leading companies and holding onto them for years.” Mr Jarislowsky held his Abbott Laboratories for over 50 years. | ♣ Contrast the above ideas with indexing: large portfolios with a fair number of losers (non-dividend payers and high yielders) and poor income growth. “The crux of your success”, Stephen Jarislowsky says, “will be to select leading companies and holding onto them for years.” Mr Jarislowsky held his Abbott Laboratories for over 50 years. | ||