05-08-2014, 08:42 AM
As the article states, Dividends and Dividend growth make up almost 90% of long term returns and the key is the following quote from the article:
"For my dividend retirement plan, I am focusing not only on the dividend, when selecting stocks however. I try to select companies that regularly pay and increase dividends, and also have the potential to increase profits over time. Rising profits supply firms with the firepower to increase dividends over time. In addition, I also focus on qualitative characteristics such as competitive advantages, strong brand names and products or services that clients are willing to pay top dollars for. Another important factor is valuation, since overpaying for even the best income stocks will surely lead to subpar returns for the first several years of the investment".
"For my dividend retirement plan, I am focusing not only on the dividend, when selecting stocks however. I try to select companies that regularly pay and increase dividends, and also have the potential to increase profits over time. Rising profits supply firms with the firepower to increase dividends over time. In addition, I also focus on qualitative characteristics such as competitive advantages, strong brand names and products or services that clients are willing to pay top dollars for. Another important factor is valuation, since overpaying for even the best income stocks will surely lead to subpar returns for the first several years of the investment".