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Very good analysis.
Almost a little scary if you step back and look at what I guess would be referred to as Capital Gain Volatility....
http://www.dividendgrowthinvestor.com/20...nvestor%29
Cheers,
Rob
There are people who use up their entire lives making money so they can enjoy the lives they have entirely used up
Frederick Buechner
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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".
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And this thought (I think it was chowder or RAS that espoused it in one of the first articles I read after signing up for SA) was the impetus for me to switch to a dividend growth strategy versus whatever the method I used was called:
"On the other hand, dividend income has remained more stable than capital gains. Since 1977, the dividend income for S&P 500 has experienced declines in only 4 out of 34 years. As a result, it is no surprise that the predictable nature of dividend payment amounts is appealing to investors in retirement."
I further posit that it is appealing to investors not in retirement but planning for it. Those dividends are a valuable source of capital when Mr. Market is being fickle allowing you to buy when you should be buying -- low.
I don't know a consistently successful market timer.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
