" Avoid stocks where the dividend is the thesis.
Own stocks where the dividend is the byproduct of growth."
Well, this message certainly got my attention. I think it's very accurate, I'm just trying to figure out what to do about it.
For me, I've been thinking about why I own these particular stocks. It's two reasons
1. Opportunistic Buy while the stock was out of favour, great dividend while waiting for capital gains to arrive. This worked out well for me with stocks like IBM, CSCO, GIS. I honestly still look for A grade stocks that are out of favour, since I've limited skills for picking growth stocks.
2. High yield, stability and lower draw down during bear markets. That's what I believed I was doing with the likes of VZ, T, BCE, and it's still what I'm doing with KO, PEP, JNJ, PG albeit lower yields, but more DG. I guess with VZ, BCE I was just not in tune with business degradation that would lead to share price erosion and divy cuts. Specifically with the telecom's I was treating them like utilities where people would prioritize and pay for their internet, phones and data over other things.
So, what are individuals focused on rather than buying stocks where the dividend is the thesis? - is it Bonds? (something I've never purchased in the past...)
Andy |
