If you are a dividend-focused investor, especially a global dividend investor, many of the stocks in your portfolio and on your shopping list have been out of favor. Zero rates, negative rates, and money printing all ignited one of the biggest rallies in speculative shares on record. The tried and true have been left behind by the market. The Nasdaq Broad Dividend Achievers index (down 3% in 2015) and the International Dividend Achievers index (down 19% in 2015), a group of stocks that are among the most investable shares for serious long-term investors, have struggled while the FANG stocks (Facebook, Amazon, Netflix, Google), trading at an average price-to-earnings multiple of 210X (the market trades at about 18X) have enjoyed the spoils of easy money.
As global dividend investors, we’ve watched the speculative rally in the FANG’s unfold and have counseled our readers and investors to eschew what has been popular. To invest successfully you have to play a long-game. Developing an ability and a willingness to invest for the long-run is of immense benefit to you. Many individuals can’t stomach the feeling of missing out, and many managers get the pink slip if they miss out for more than a couple of quarters. This dynamic creates a short-term orientation in the market that often presents opportunities for long-game investors.
We don’t play the short-game at Young Research or at our sister company Richard C. Young & Co., Ltd. Our goal is to help investors like you preserve and protect what you’ve saved. We craft diversified portfolios that harness the power of compounding through high dividend payments today and the promise of higher dividends tomorrow.
Despite being focused on global dividend stocks, over the last one, three, five, and ten years, Young Research’s Retirement Compounders have done better than the gold standard of global portfolio benchmarks—the MSCI All Country World Index Net. Over the last five and ten years, our portfolios bested the benchmark by about three percentage points—that’s huge over a 10-year period. I had to double check the returns when I first looked at them. I thought, surely after what has been a tough few years for global dividend shares, our RCs wouldn’t look so great relative to an index that included FANG stocks and their international equivalents. To my surprise, our strategy worked rather well even during this challenging period.
Outperforming an index has never been our goal and it still isn’t. Our goal remains to help investors craft portfolios that meet their investment goals and objectives without taking knock-you-out-of-the-game risks. That, I can confidently say, we have succeeded at and will continue to succeed at.
Jeremy Jones, CFA
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