Tuesday, July 8, 2008

My Dividend Growth Plan - The Dividend Guy

On July 2nd, my colleague at The DIV-Net (the moneygardener) posted an interesting article on his dividend growth plan. I was intrigued by his investment philosophy and thought I should do the same as it is probably important for readers of The DIV-Net to understand the philosophies of the authors that are posting here. I have put together this post to help you better understand me and my investment process.

My investment process starts off with what I call The Dividend Guy Investing Code. Fancy and creative name aside, I think this is something that every investor should do before setting out on their investing journey. It helps to clarify goals and understand your approach so that emotions and wavering judgment do not get in the way. Here is my Investing Code:

  1. Pick an appropriate and well diversified asset allocation and stick with it through thick and thin
  2. Hold at least 15 stocks in each of the CDN and US portions of the portfolio
  3. For other asset classes (i.e. international equity, REIT), use index funds unless index funds are not available through my pension fund
  4. Hold dividend growth stocks that consisitently raise dividends to my core portfolio
  5. Maximize my employer contributions to both my pension plan and my employee savings plan
  6. Only invest in companies I understand
  7. Buy only companies that are selling at a discount
  8. Only invest in companies that are dominant in their industry
  9. Only invest in companies that have strong fundamentals (EPS, Revenue, ROE, etc.)
  10. No individual stock holding to make up more than 10% of overall portfolio
  11. Never sell*
* Never is a long time - there may be circumstances where selling is the best course of action such as fraud, cessation of dividend payments or other factors.

These are the principles and philosophies that I use to guide my investing decision. Again, it helps to ensure that my decisions are based on research and sound investing principles and not on emotion and whimsical decisions.

If you would like to read more about my overall dividend investment process, then please visit my blog and look in the sidebar for the links under the heading, 'The Dividend Guy's Investment Process'.

This article was written by The Dividend Guy. You may email questions or comments to me at info@thedividendguyblog.com.

0 comments:

Post a Comment

Recent Posts From DIV-Net Members