01-02-2014, 11:07 AM
(This post was last modified: 01-02-2014, 11:07 AM by hendi_alex.)
I wonder what relationship, if any, exists between dividend growth and total returns? It could be that a portfolio that is structured purely toward dividend growth is one that is structured toward chronic under performance. After all, higher dividend payouts are usually a trait of more mature, slower growing companies which can't find more productive use of the cash. On the other hand, smaller cap companies tend to be faster growing and can deploy all of their cash into organic growth that turns out to be the best use of that cash, better both for the company and for the share holder.
I'm a big believer in dividend stocks, but think that getting 100% focused on a DG type portfolio could be counter productive to one's wealth, especially for those with decades before retirement. Does anyone have any thoughts on what allocation, if any, one should give to smaller cap growth companies?
I'm a big believer in dividend stocks, but think that getting 100% focused on a DG type portfolio could be counter productive to one's wealth, especially for those with decades before retirement. Does anyone have any thoughts on what allocation, if any, one should give to smaller cap growth companies?
Alex