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Strategies & Market Trends : Dividend investing for retirement

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From: Max Fletcher	6/30/2020 4:34:17 PM
	1 Recommendation Recommended By B.K.Myers Read Replies (2) of 34328

Timeless Wisdom. I’m re-reading Burton Malkiel’s “A random walk down Wall Street” and came to one of the mantras (in my mind) of investing that - to my amazement - two investment professionals friends had never heard of. “Very long-run returns from common stocks are driven by two factors: the dividend yield at the time of purchase, and the future growth rate of earnings and dividends... The discounted value of this stream of dividends (or funds returned to shareholders through stock buybacks) can be shown to produce a very simple formula for the long-run total return for either an individual stock or the market as a whole: Long-run Equity Return = Initial Dividend Yield + Growth Rate I don’t personally track my investment performance (too many variables to keep track of, including money in and money out) and I’m not trying to beat the market - I’m trying to achieve an Income stream with modest risk. But at SSD I see the yield of my holdings is around 3.7% and the dividend growth over the last 5 years is 6.0%. So, over the long term - ignoring the fluctuations of changing PE Ratios - my performance would be in the 9.7% range. More than acceptable to me. GLTA

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