05-18-2014, 04:43 PM
My mentor has been the Connolly Report and here's one of his comments.
"HALF GONE SOON
If you have savings invested in broad equity mutual funds (and most are as they hold scores of stocks) or if you have an index fund, there is a very good possibility that you will lose half of your money in the next few years. The gains you were expecting to earn are on the table now. Take them! Markets are cyclical. Valuations are close to extremes. Get out of equities that do not grow their dividends before the downdraft. Do not go into bonds: they are way overvalued too. Hold cash. Wait for safer valuations.
On the other hand, those of us who hold dividend growing stocks purchased years ago, can't sell and do not wish to sell. These assets generate our retirement income. We actually plan not to spend our capital. Market gyrations, therefore, do not affect our our retirement income. As we (dividend growth investors) are not going to sell, the price really does not matter. Capital gains, until realized, are hypothetical anyway. Just now we are culling the few duds (poor dividend growers) we own.
This is the fundamental difference between what dividend growth investors do and what most everyone else does. Ours is a whole different way of thinking, of investing. The financial plan you read of in the press are mostly wrong. We focus on the growing yield our common stocks provide in retirement. And, if the cash a company throws off is growing, it's most likely the stock price will rise also.
One of the portfolios I keep an eye on began life with $200,000 in 1998…one hundred percent in dividend growing common stocks, gradually purchased. The portfolio now generates $28,800 in annual tax-free Canadian dividend income. Last year alone, income increased by 7.3% ($1,160 more). That's the dividend growth retirement plan.
Begin dividend growth after the marketdowndraft, even if it is with only one dividend growth stock. It takes time for income to grow to meaningful numbers."
"HALF GONE SOON
If you have savings invested in broad equity mutual funds (and most are as they hold scores of stocks) or if you have an index fund, there is a very good possibility that you will lose half of your money in the next few years. The gains you were expecting to earn are on the table now. Take them! Markets are cyclical. Valuations are close to extremes. Get out of equities that do not grow their dividends before the downdraft. Do not go into bonds: they are way overvalued too. Hold cash. Wait for safer valuations.
On the other hand, those of us who hold dividend growing stocks purchased years ago, can't sell and do not wish to sell. These assets generate our retirement income. We actually plan not to spend our capital. Market gyrations, therefore, do not affect our our retirement income. As we (dividend growth investors) are not going to sell, the price really does not matter. Capital gains, until realized, are hypothetical anyway. Just now we are culling the few duds (poor dividend growers) we own.
This is the fundamental difference between what dividend growth investors do and what most everyone else does. Ours is a whole different way of thinking, of investing. The financial plan you read of in the press are mostly wrong. We focus on the growing yield our common stocks provide in retirement. And, if the cash a company throws off is growing, it's most likely the stock price will rise also.
One of the portfolios I keep an eye on began life with $200,000 in 1998…one hundred percent in dividend growing common stocks, gradually purchased. The portfolio now generates $28,800 in annual tax-free Canadian dividend income. Last year alone, income increased by 7.3% ($1,160 more). That's the dividend growth retirement plan.
Begin dividend growth after the marketdowndraft, even if it is with only one dividend growth stock. It takes time for income to grow to meaningful numbers."