BBE, not sure I get all your metaphors, but I have always struggled with the tradeoff between current yield and expected growth. Struggled, but struggled in a good and productive way, I think. When I started DGI five years ago, it was easy to find high quality companies yielding 4% and even more. Now, barely possible, if at all.
Today, to me, the choice comes down to something like this: Does one want to buy PFE with a 3.6% yield and slow growth on the horizon (although I think dividend growth will be healthy for awhile) or MCD (pretty expensive right now) or LMT with yields in the area of 2.6% but expected dividend growth of 7% to 10%. When I began DGI, I did both, but concentrated more on the JNJs, MCDs, and LMTs. Now I am five years older--but still with a lengthy expected life span, and am slightly more oriented toward the 3.5% yield, but since I don't really "need" the income, I can go either way. Anyone who says that one way is "right" and one way is not is mistaken, IMHO. One may be better for someone than the other, but there is no "right answer." Depends on needs and expectations.
Hope this addressed some of you questions. |
