Why Require Ten Years of Dividend Growth?
Dobromir Stoyanov submits:
After my post when to break your rules, some readers asked me whether it is reasonable to enter into a dividend investment which has not raised dividends for more than 10 years in row.
The truth is that dividend investing should require intense scrutinizing of companies in order to find the best stocks for ones portfolio. Otherwise, investors could end up getting whipsawed in and out of stocks, which would increase trading costs and would make them less likely to reach their goals. The reason behind requiring at least a decade of consistent dividend growth is to weed out all companies which are inconsistent in their dividend policies. Few companies which raise distributions for less than a decade end up on the dividend achievers list. In fact of the total universe of 10,000 US publicly traded stocks, less than 300 are included in the achievers list.
Investing, Long Term Investment, stock market | admin March 3, 2010
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