Great article. This is such a polarizing topic. I think most spend time trying to convince others (and themselves) that there is a mathematically optimal way of doing things and ignoring the psychology behind it. Leaning into the psychology of not having to sell is very on point. Good stuff.
Nice article Stephen, very informative on the subject. What about the increase (hopefully) of the stock price itself during the years one builds-up his/her dividend growth portfolio? For instance Dynacor stock price more than doubled during the past decade, is this not an extra benefit to the income investor who selects quality dividend growth companies? I do not see this point mentioned in similar articles or by dividend investors. Am I missing something?
No no, my writing just wasn't good enough. In the section about leverage I alluded to it by saying "keeping the compunding" by which I meant the investor gets the share price appreciation.
I think the focus is just on the income, but the share price appreciation is definitely there. It's a big selling feature.
I think maybe it's de-emphasized because share price appreciation is usually better achieved by growth companies which frequently don't pay dividends. Relative to other options, the share price appreciation is not the highlight. Just an idea.
Your point is good, I should have made it more clear
Great article. This is such a polarizing topic. I think most spend time trying to convince others (and themselves) that there is a mathematically optimal way of doing things and ignoring the psychology behind it. Leaning into the psychology of not having to sell is very on point. Good stuff.
Thanks Dean. I feel this. Listening to financial advisors go on about the latest academic research seems to miss the a lot of the point
Nice article Stephen, very informative on the subject. What about the increase (hopefully) of the stock price itself during the years one builds-up his/her dividend growth portfolio? For instance Dynacor stock price more than doubled during the past decade, is this not an extra benefit to the income investor who selects quality dividend growth companies? I do not see this point mentioned in similar articles or by dividend investors. Am I missing something?
No no, my writing just wasn't good enough. In the section about leverage I alluded to it by saying "keeping the compunding" by which I meant the investor gets the share price appreciation.
I think the focus is just on the income, but the share price appreciation is definitely there. It's a big selling feature.
I think maybe it's de-emphasized because share price appreciation is usually better achieved by growth companies which frequently don't pay dividends. Relative to other options, the share price appreciation is not the highlight. Just an idea.
Your point is good, I should have made it more clear
Telus? 7% yield 7% growth