Tuesday, May 25, 2021

Dividend Stocks in Today's Market

When I stumble across an old article I had forget, it is like finding lost treasure. This has happened as I was looking for and information and found some notes on an old article How to Play Dividend Stocks in Today's Market by Roger Conrad. Unfortunately, The site and the article no longer exist, but I still had my notes.

Here are a few interesting takeaways from the article:
  • Income investing is, at its core, a long-term enterprise.
  • Frequent buying and selling of dividend-paying investments can jack up your tax bill.
  • A growing dividend is a strong sign of a company becoming more valuable. Companies that increase dividends tend to have rising share prices, but you only cash in if you buy and hold.
  • If a company continues to post the right numbers, the best course is still to grit up and hang on, even if its share price has already taken a tumble. History shows that companies that weather down cycles as businesses will eventually recover in the share market, provided they keep up their good work.
  • The point for income investors is we’re going to have to start looking at the inflation risk of what we own, just as we now look at credit risk.
  • My philosophy of income investing is that diversification is paramount. If you’re going to buy and hold, you’re going to have to weather the ups and downs of the market.
  • Holding only first-rate businesses does protect your dividend streams. And over time, it ensures you’ll also get steady price appreciation.
Overall, it was a very interesting read.

Full Disclosure: No position in the aforementioned securities.