06-09-2015, 03:12 PM
In a case of rising interest rates, high current dividend yield companies will most likely suffer capital losses. High current dividend yield companies are not necessarily what I as a dividend growth investor look for. I'm more concerned with where the potential dividend increases could lead me in 10-20 years.
It is fair to ask current yield be a minimum according to a relevant benchmark. A relevant benchmark could be the yield-to-maturity of the 10-yr T-Note, or the average dividend yield on the S&P 500.
Because the current yields on the companies I own tend to be just over my benchmark, which is not high yield, they're less sensitive to an interest rate move than a high yielder.
Pure growth play? My core competency as a CPA is financial statement analysis. I like researching micro cap and small cap companies that are not followed. The reason I like little information, is because the less information on the company, the more likely it is to be mis-priced. My skills give me great insight as to the economic value of a business, and allow me to accomplish alpha with small caps.
I don't recommend people try to do this themselves. In fact, I'm not a DIYer when it comes to investments. It would take years of studying accounting and finance, experience with hundreds of companies, and thousands of market experiments to understand what I do. I'm not being pretentious, that is just the truth.
It is fair to ask current yield be a minimum according to a relevant benchmark. A relevant benchmark could be the yield-to-maturity of the 10-yr T-Note, or the average dividend yield on the S&P 500.
Because the current yields on the companies I own tend to be just over my benchmark, which is not high yield, they're less sensitive to an interest rate move than a high yielder.
Pure growth play? My core competency as a CPA is financial statement analysis. I like researching micro cap and small cap companies that are not followed. The reason I like little information, is because the less information on the company, the more likely it is to be mis-priced. My skills give me great insight as to the economic value of a business, and allow me to accomplish alpha with small caps.
I don't recommend people try to do this themselves. In fact, I'm not a DIYer when it comes to investments. It would take years of studying accounting and finance, experience with hundreds of companies, and thousands of market experiments to understand what I do. I'm not being pretentious, that is just the truth.