BlackRock’s Global Chief Investment Strategist Richard Turnill on the importance of dividend growth. This week’s chart shows how U.S. dividend stocks have outperformed the S&P 500 over the past year, a trend we have also seen in other regions, as ultralow bond yields have intensified the hunt for income. Year-to-date flows into dividend-focused exchange traded products (ETPs) have reached $7.4 billion, more than seven times the 2015 total, according to our data. So what’s next for dividend stocks? We don’t see strong demand for dividend stocks dissipating anytime due to low … [Read more...]
“For My Money the Sun Rises and Sets on…”
I found this gem from Richard C. Young’s Intelligence Report, December 1988 issue. Some things never change. When it comes to serious money invested in common stocks, for my money, the sun rises and sets on dividends. With dividends as your friend, you have the miracle of compounding on your side through thick and thin. What question should you ask first before you invest in common stocks? You ask, what is today's yield on stocks compared to the historical yield on stocks? If the current yield is higher than the average yield over many cycles, you can take advantage of a period of value. … [Read more...]
Dividends are Back!
Dividends are back. “The humble dividend is reclaiming its rightful place as the arbiter of stock-market value. In three of the four biggest developed markets, shares offer a higher yield than the longest-dated government bond, and in the fourth—the U.S.—the dividend yield beats even a 20-year bond,” writes James Mackintosh at The WSJ. But offering higher yields than the longest-dated government bonds is like jumping over a candle stick. “The low returns on the longest-dated bonds are extraordinary: 0.3% on Japan’s 40-year government bond, 0.9% on Germany’s 30-year bund, 2.1% on Britain’s … [Read more...]
The Most Impressive Dividend Records
Ben Graham was one of the most successful investors of all-time and the father of value investing. He also wrote the one and only investment book that most investors will ever need to read, The Intelligent Investor. If you’ve read The Intelligent Investor cover-to-cover, you are head and shoulders above the vast majority of the investing public. The amount of investing insight and wisdom packed into this single volume remains unmatched to this day. The Intelligent Investor's Most Valuable Advice Some of Graham’s most valuable advice was to the defensive investor. In Intelligent Investor, … [Read more...]
The Monday Melee: Dividends Break Records
Third Quarter Dividend Explosion CNBC reports that dividend growth hit a new quarterly record of 23.4% in the third quarter. A wobbly third-quarter stock market didn't stop companies from shelling out cash to shareholders, with U.S. investors getting the bulk of the benefits. American companies issued a staggering $107.9 billion in dividends for the three-month period, a 23.4 percent quarterly increase that "comfortably" set a new record," according to data released Tuesday by Henderson Global Investors. How to Choose a Dividend Stock Spreading the Wealth Reuters reports … [Read more...]
Dividend Religion, Hallelujah!
Do you know what a dividend paying stock that yields 3% today and increases its dividend by 10% per year for 10-years will yield? Answer: 7.78% I don’t need more proof than that to get me some dividend religion. … [Read more...]
Sell in May Go Away?
You can learn a thing or two from history. For one, it happened, it’s a fact, and 2) not many people predicted it correctly. In Bill Bryson's book One Summer “America 1927” he touches on the fateful decision by the Federal Reserve to lower its discount rate. The stock market even before leading up to that fateful decision by the Federal Reserve was fueled by credit. You could buy $100 worth of shares with $10 down. Brokers or banks were happy to lend you the money at 10-12 percent interest, which they borrowed from the Fed at 4 to 5 percent. It all worked as long as the stock … [Read more...]
“The Moment” I Lost Money
If you’re over 50 and lived in or around the Boston area during the 70s then you know the moment. 45 year’s ago, Mother’s Day 1970, Bobby Orr took the pass from Sanderson, scored to clinch the Stanley Cup, and “The Flying Bobby” was born. That was the defining moment in Boston sports for Boston Globe sports-writer Kevin Paul Dupont. In describing his most important moment in Boston sports he talks about winning and losing. It made me think about making and losing money. I lost money at a very early age and it hurt. The summer between my Junior and Senior years at Babson I had an … [Read more...]
Dow Down 7.3% Jan & Early Feb
You may feel whipsawed by this stock market so make sure you’re getting paid cold, hard cash to invest in it. I only like dividend paying stocks for you because investors piling into the market now may be gone in January. Let’s not forget what a rotten start 2014 was as E.S. Browning of The WSJ observes: The concern is that those investors might move at least some of their money elsewhere after New Year’s Day. Something similar happened at the start of 2014, when the Dow fell 7.3% in January and early February. Bad weather hurt stocks then, too, but January usually is a strong month as … [Read more...]
Consumers Are Tapped Out
You need to get paid to invest in this market. My favorite form of payment for you is dividends. A lot of good things come from a sound, dividend-centric approach. First, your interests are in alignment with the company—it must pay you, the investor, for buying the stock. Second, there’s a safety net of sorts since the company has to have some cash to pay you that dividend. And third the best dividend payers have a history of consistently increasing their dividend. But maybe the most important reason is that dividend payers tend to have a long track record of being in business through more … [Read more...]
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