The past year was the sixth year in which I have been sharing ideas on dividend investing on this site.
I have outlined the top five articles written in 2013, which readers found to be the most useful. I have also added a brief summary behind each article.
1) Best Dividend Stocks for 2013 and Beyond
I presented a list of 20 quality dividend paying companies, which were attractively priced, and are great long term holdings. Some of these companies like Walgreen (WAG) went up in price considerably, and I could only consider them great holds. Others like Phillip Morris International (PM) are available at attractive valuations today. After all, the name of the game is to select a quality company at a reasonable price, which grows earnings and raises dividends for you. Your job is to then hold on to that compounding machine, and let the power of compounding work for you.
2) Warren Buffett's Dividend Stock Strategy
In this article I analyzed some of Warren Buffett’s largest investments at Berkshire Hathaway. I found out that the Superinvestor likes to generate growing distributions from the companies he invests in, and then uses those to purchase more businesses that distribute excess cash to him. The similarities with what dividend growth investors do on a monthly basis are strikingly similar, which is why I believe that Buffett is a closet dividend investor.
3) Ten Dividend Paying Stocks I Purchased in my Roth IRA
Last year, I had the realization that I am paying too much in taxes. As such, I am trying to defer taxes as much as possible, by tapping every legally allowed way to put money in 401 (k), SEP IRA and Roth IRA. In this article I discussed ten companies which I purchased using Sharebuilder for my Roth IRA. The purpose of this series of articles on Roth IRA investing was that one could invest $5,500 over a three month period, make 25 – 30 individual investments, and pay $24 in total commission costs. By reducing investment and taxation costs to a minimum, the investor will keep more money for themselves. You can create you tax-free dividend compounding machine today by making a Roth IRA contribution, and won’t have to pay any taxes on income when you withdraw it at age 59 ½. By my estimates, a $5,500 investment today could generate approximately $200 in annual dividend income. If dividends grow by 6%-7%/year and are reinvested into securities yielding 3% - 4%, the annual income stream would grow to $1600 in 30 years and $3200 in 40 years.
4) Why Most Dividend Investors Never Succeed
In this article, I outlined a few behavior items that can prevent investors from achieving their investment objectives. I believe that most buy and hold dividend investors have an edge because of the relative passivity of their strategy. However I believe that succumbing to behavior issues could jeopardize investment success. While the article was more geared towards new investors, I think that those who have experience in dividend investing could benefit from reminding themselves about psychological pitfalls of investing in general.
5) Twenty Dividend Stocks I Recently Purchased for my IRA Rollover
The last article I am outlining lists twenty companies I purchased for my IRA. I rolled this account over from an old 401 (k) at Fidelity in the past year. The process took less than a day, as I kept the IRA at Fidelity. It was difficult to find 20 companies to put my money to work in at almost the same time, but I managed to pull it off. My retirement accounts are the only places where I automatically reinvest dividends.
It is very interesting that the readers like to hear more about purchases I have made, or specific companies I discuss, rather than income investing strategy. I actually believe that the strategy piece is the most important one, whereas individual stock selection is a result of having a sound investment plan.
6) A few other information resources I enjoyed covered an interview with Peter Lynch and a documentary about Sir John Templeton. You can find the links below.
Interview with Peter Lynch
Documentary about Sir John Templeton
Sir John Templeton and Peter Lynch
Thank you for reading Dividend Growth Investor. I hope the new year brings us a correction, which would allow us to get more dividend paying stocks for our bucks.
One of my favorite quotes from Warren Buffett deals with an issue that many dividend investors face from time to time. The quote is” If you...
The price of oil has declined a lot since the summer of 2014. The West Texas Intermediate (WTI) in Cushing, Oklahoma has declined from a hig...
It is not a secret that stock prices have been rising for 6 - 7 years in a row now. This makes it easy to hold on to stocks, and believe tha...
The stock market is finally having the correction everyone has been waiting for since 2012. In the past month, the S&P 500 is down by 7...
As many of you know, I only invest my money in companies which pay dividends. I have made a lot of money that way , and I use dividends as a...
Note: I originally planned to post this article tomorrow, but in light of recent developments about Baxalta being in the process of being ta...
As someone who has been investing in, and writing about dividend paying companies for over seven years , I have accumulated a lot of observa...
I have been focusing on dividend growth investing for several years now. As such, I try to think about why it works, and also think about s...
I am often asked the following question in some variation: If I were starting a dividend portfolio today, and had a lump sum to put to work ...
As an investor my goal is to attain financial independence using my dividend growth strategy. As a dividend investor, my goal is to generat...