Investing in dividend stocks
Dividend investing is about creating a stream of growing and predictable dividend income. There are a number of aspects to consider when investing in dividend stocks and one of the more important is that long-term the dividend growth rate has a greater impact than current dividend yield on the long term returns.
Before turning your attention too much towards dividends other aspects needs to be considered securing a good investment. Remember – your goal should always be finding good buys not only good assets.
- The primary goal is finding good buys not (primarily) good assets
- Buy below value with margin for error; average down
- Be patient and stay prepared (create watch-list)
- Great opportunities do not exist every day; when prices are high risks are high and returns are low. Do not insist on being clever when there is nothing clever to do.
- Just because its undervalued does not mean its going to go up any time soon
- Remember the pendulum – where are we now? Never sell at lows; Buy at lows and do not follow the herd
- The relationship between price and value is influenced by psychology and technical that can dominate over fundamentals in the short run
- The only risk that matters is permanent loss of capital