Category Archives: Dividend Growth Investing
The Fourth Scenario For When Should I Transition From Capital Gain Investing To Dividend Growth Investing? – Seeking Alpha
An author, whom I consider a friend, Robert Allan Schwartz, recently penned an article describing his views on when young investors should transition from growth to dividend growth investing. In this article found here, he created a series of three scenarios and created a set of parameters from which to run them on. Although I felt that his parameters were reasonable, and his scenarios plausible, I also felt that they grossly underestimated the true power of what I would call a pure growth strategy. Frankly, I felt he inadvertently shortchanged the powerful performance capabilities that true growth stocks are capable of achieving.
With so many participants and contributions, it is inevitable that some misconceptions about dividend growth investing have sprung up. Here are five prominent “myths” about dividend growth investing, along with my point of view about each one.
Seeking Alpha’s Jonathan Liss recently caught up with Van Knapp to discuss the rapid growth in popularity of dividend growth investing. His most recent e-book, Top 40 Dividend Growth Stocks For 2012: How to Create and Maintain a Dividend Growth Portfolio provides the basis for the interview that follows.
David Van Knapp (DVK): Typically, the dividend growth investor purchases stocks with the intention of holding them for a long time. That’s because he or she selects companies that are expected to succeed for long periods of time, and then focuses on the increasing income stream generated by those companies. So stock price movements have less impact than they probably do on the average investor. In fact, contrary to some behavioral finance theories about investor panic, a price increase may be more likely to induce a sale than a price decrease, while a price decrease may be more likely to induce a purchase.