Sunday, January 19, 2014

Dividend Growth Investor Website Turns 6 Years Today

I just wanted to post that this site just turned 6 years old today. I made the first post to the site on January 19, 2008. I want to thank everyone who reads it.

The purpose of this site was to make me a better investor. I am trying to achieve that by putting down investment thoughts on paper, and document my reasoning why I liked certain companies and strategies. By writing things down, and posting it out there, I am essentially pushing myself to do the actual work before committing money to an investment. By keeping a constant schedule, I am able to mentally maintain my persistence to keep plugging at my dividend investing. Dividend investing is a marathon, not a sprint, which is why it is important to be persistent, and patient all the time. Sometimes you will get low on motivation, which is why it is important to develop systems to get yourself out of it! For me, every time I receive a dividend, I am pretty ecstatic, because that is income I didn't have to work for, generated from an investment I may have made years ago.

I used this site to document aspects about dividend growth investing, which I learned through my research. As I keep learning more, I keep writing more. I also try to think ideas out loud, write them down, and see if they make sense.

In addition, when I post something in public, I get the opportunity to get feedback, which could uncover ideas I might not have thought out about. Another benefit of having a website is that I have been able to connect with other investors, and learn more about their thought process, and resources they utilize in their stock research. I especially like when someone asks me a question, because by interacting, I might think about something I have not previously thought about.

My road to Dividend Growth Investing was a long and arduous one, but once I learned about it, I decided this was the strategy for me. For several years prior to becoming a Dividend Growth Investing, I learned all there was about charting, indicators, momentum investing, stock market history, and about the stories of successful traders. The thing that always made me shun those strategies was the fact that one could correctly identify a company that will grow in value, yet make little money because you get whipsawed when it has a correction. You get whipsawed, because when companies are on their way to greatness, they never go up in a straight fashion. I then decided that buy and hold is my preferred method of investing, since it involves less time, taxation costs and investment costs than active trading. I also wanted to be able to generate cash flow, no matter whether stock market was going up or down. I did put a large portion of my money in CD’s, which provided cash flow. The problem was that the income and principal were losing purchasing power due to inflation. I was looking for a strategy where I would earn more income over time on my capital, while my capital would also compound above rate of inflation as well.

As I kept doing research, I uncovered the beauty of Dividend Growth Investing. Once I saw how a company like Johnson & Johnson (JNJ) managed to keep earning more, and pay more dividends over time, I was instantly hooked. It isn’t that difficult to get excited about a company, where a single $1000 investment can generate hundreds of dollars in annual dividends after a certain period of time. In my experience, some people who learn about Dividend Growth Investing get it almost instantly. The rest will never get it, and will provide you with 100s of reasons why it is a bad strategy. While it is helpful to get opposing viewpoints, in order to avoid making stupid mistakes, I have found that arguing with the people who don’t get Dividend Growth Investing is a waste of my time. They probably do mean well, and sometimes have some good points such as don’t fall in love with a stock, focus on earnings growth and not just chasing yield, diversify etc. Of course, everyone has their choice of how to invest money, and I am fine when someone finds something that works for them. I chose Dividend Growth Investing, because it fits perfectly with my long-term goals of generating a rising stream of income from my portfolio. I didn’t want to be at the mercy of the stock market, and risk depleting my nest egg by having to sell during bear markets, in order to meet my living expenses. I also didn’t want to invest in shiny growth companies, with sky-high valuations ( or non-existent earnings), which may or may not survive, and where market sentiment about the stock price results in huge fluctuations.

I like the relative stability and predictability of companies like Johnson & Johnson, Coca-Cola, Philip Morris International, which quietly compound earnings, dividends and capital over time. They are there, in plain sight, making patient long-term investors rich, while everyone else is out there searching for the next Microsoft. I like that when I get a dividend it is mine to keep, and cannot be taken away from me. Dividends are more stable than capital gains, which makes dividends an ideal way to live off my nest egg. When dividends increase over time, they also preserve purchasing power of income and principal. Over time, as a company like Coca-Cola earns more, it pays more in dividends, and becomes more valuable to investors. Therefore I get the trifecta of goodiness.

I launched the site in early 2008, just as the global financial system was imploding. I started off converting most of my assets to Dividend Growth Investing between 2008 and 2009. I would be the first one to admit that the timing of my initial investments was based on pure luck in hindsight. Since then, I am spending my time saving money, looking for bargains, analyzing companies and learning more about dividend investing and quality companies. I am building my dividend machine one dividend paying stock at a time. I also encourage everyone to keep learning as much about stock selection as possible, by studying anything on Ben Graham, Peter Lynch, Warren Buffett, Charlie Munger, Philip Fisher etc.

I am a regular person, like everyone else that reads this site, who has a day job, saves some money from it, and then wants to find a place where my money can work for me. I am always low on time.
I do not write about myself on the site, because I do not think I am that interesting. I also do not write specifics about my financial situation. I already post my ideas on investing for free, so asking for extra like specific numbers is asking too much if you ask me. I don’t see why an anonymous person would be interested in how much I have, and ask me to post it online, unless their intentions are bad. In addition, anything I write about on this site, includes my thoughts about companies, strategies, is not a recommendation for anyone else to act on. You should do your own research before you make any investment decisions, and not rely on everything that anonymous people post on the internet.

Anyway, thanks for reading my site. I have a lot of articles written over the past six years, which I have posted in the archive accessible from here. I hope to be able to share my investment experiences over the next 5- 6 years as well.

Relevant Articles:

Dividend Growth Stocks – The best kept secret on Wall Street
Dividend Growth beats Dividend Yield in the long run
Frequently Asked Questions (FAQ) About Dividend Investing
The Dividend Investment Journey
My Dividend Goals for 2014 and after

35 comments:

  1. Congrats on 6 yrs. A rational and helpful blog on the insights of DGI

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  2. I am relatively new to dividend investing and do appreciate you sharing your thoughts. They have been very helpful

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  3. Thanks for the site! Keep up the great work!

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  4. Congrats, Mr. DGI. Your methodical, consistent approach to your articles and stock analyses has been a great aid for me in learning about new ideas and maintenance analysis on existing ones. Well done, keep it up!

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  5. Congratulations on the six year mile stone. I look forward to reading your posts and appreciate, very much, all your efforts and hard work.

    Many happy returns.

    Steven

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  6. Coming from a patient long term investor, thanks for all you do and all the time and trouble you go through to give us insight that may very well get us to a comfortable retirement 8)

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  7. Thanks for your great and informative articles.

    I'm based in the UK and have been investing in dividend stocks for 2years. I've been reading your website for 2 years. I have learnt a lot from you.
    Thank You.
    Jon, UK

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  8. 9966685Over the last couple of years I have turned my portfolio into a dividend portfolio. During this time you have written many articles. Is there any way to search the file to find the individual article as you probably have written on most of the stocks I own and the ones I hope to buy in the near future?

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  9. Please keep on writing. I appreciate all your articles. You're probably more interesting than you think.

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  10. Congrats! I enjoy your posts and look forward to many more.
    Keith

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  11. Happy 6th birthday and good health to carry on your good work and sharing as being a UK reader I appreciate the information on US companies.

    I make frequent use of spreadsheets in my analysis, incorporating a dividend discount model and the Three step Dupont model which I find extremely invaluable.

    I wonder if you these type of tools might be a subject of discussion for a future article?

    Kind regards

    Louis Gunn

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  12. Thank you for the effort and time to document your thoughts. It has helped me be more disciplined and on occasion has changed my opinion.

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  13. I'm a believer in dividends just like you -- thanks so much for creating this site and letting us into your thoughts. Congrats on year six, and here's to many more.

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  14. Your site has been extremely informative, helpful, and one of the reasons why once I learned about DGI, I immediately decided it was worth my attention and capital. Keep up the great work.

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  15. Congratulations and thank you for sharing your process!

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  16. DGI,

    Congrats on all of your success. You've obviously built a wonderful portfolio chock-full of equity high quality companies, and for that alone you should be commended.

    The fact that you've also been providing the community with a great service for free for six years now is just icing on the cake.

    Keep up the great work! Looking forward to another six years. :)

    Best wishes!

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  17. Your site has been a very important part of my transformation from a "buy and worry" investor to a dividend growth investor. I now sleep well at night--not because I'm 100% confident that my financial capital will grow--but because I believe I have maximized my chances to do so. Thanks for your consistent, high-quality work. You give real numbers without all the unnecessary details. I hope you keep post another 6+ years.

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  18. Happy 6th Birthday! I am a quiet, but loyal reader. Love your blog and wish you great success and many more DGI birthdays!

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  19. Please accept my ongoing gratitude for all of your efforts and insights into your sensible approaches to and explanations of dividend investing. Happy 6th "Birthday" from a 78 year old whose family's future has been enhanced by your thoughtful newsletters.

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  20. Congratulations! I know your site has helped me immensely from an investing perspective AND for my own site!

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  21. thanks for all your work and for sharing your investing ideas.

    one minor suggestion: in the opening paragraph of today's post, I think you meant to say that dividend investing is a marathon, not a sprint (rather than the reverse which is what was written)

    I share much of your investing philosophy. Having a long term, consistent approach is essential for DGI to work.

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  22. Cheers! Here's to many more years for DGI and your investment success!
    Thanks,
    Skip

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  23. Congratulations on the website doing so well. Six years is amazing. Thank you for what you do. Your work takes a lot of time, effort, and research. I have learned ideas here on this website.

    Best wishes off this website and yourself in the future.

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  24. Congrats on the 6 years ! Oustanding!
    Really helpful blog, one of my favorites about DGI !
    I have just started investing and your blog, your archives and your current thoughts are really helpful!
    Keep up the great job!

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  25. Congratulations on your 6 years, I have been a loyal reader since 2008. I know to trust you as you always state your point of view clearly nor are you self-promoting. Your thoughts and observations have helped to form my own philosophy of investing at a crucial time of my retirement. Keep up the great work!

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  26. "Dividend investing is a sprint, not a marathon."


    Are you sure you got those terms right?

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  27. Thank you everyone for reading. As many mentioned, I messed up a perfectly good quote. It should have said " Dividend investing is a marathon, not a sprint".

    I have updated with the suggestion!


    Cheers!

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  28. May I second everyone's thanks for your efforts. You are very interesting and helpful, despite the personal modesty. Here's to six more! Karl N

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  29. I appreciate what you are doing, and it has been very helpful to me. I sure wish I had known about this when I was younger!

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  30. Thank you for all the time and effort you do to write this blog and to help the rest of us to learn more about dividend growth investing. I appreciate your input and the way you do it. (I would buy your book if you had one to sell.) Your blog is a must read for me as I make investment decisions for myself and some members of my family. I could go on but suffice it to say, I really appreciate your sharing in these regards!

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  31. Keep it up for another six! I think my investing could gain a lot by documenting it like you have with your website! Holding yourself accountable keeps yourself on track. Cheers to early retirement!

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  32. In picked up your blog in 2009 and at that time my money was invested mostly in high MER mutual funds and a few stocks for speculation. Investing money was very frustrating to me, I had no rules or system to buy and sell, and day trading was too demanding and risky for my personal situation.

    Thanks to a few blogs and yours is on the top shelf, I learned a great deal about DGI and not only did I make money, I take great joy in tracking my dividend income and investing is not a chore anymore.

    I think all readers here are one the same page, we all wish you to continue for another 6 years at least !

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  33. Big D....
    You are the man...I can't thank you enough for getting me going on this path.
    J

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  34. DGI,
    After investing for twenty years, I am embarrassed to say that I did not know that many of the companies I owned increased dividends yearly. Yes, my dividends increased every year, and I noticed it, but did not put two and two together, until I ran into your blog and really read it. I understood, quite by accident, with your help, what I had been doing. Your blog gave me focus I did not have before, a real understanding of what I had been doing and needed to do. On backtesting some of the stocks I owned, stuff like MO, PM, JNJ, and looking at their dividends and increases over the years, I simply could not believe my eyes. It was like day-break!

    Now, I don't blindly follow your lead, no one should. We don't always agree, that's only natural. But I want you to know this: in those moments when you wonder if you should continue your blog, when you wonder if you have the time to continue, when you wonder if you have helped anyone at all, served any purpose at all, please smile and know that you have!

    Thank you,
    A

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Questions or comments? You can reach out to me at my website address name at gmail dot com.

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