In dividend growth investing, the dividend growth portfolio is focused on an ever-increasing dividend stream. Price is not the focus. I don’t care about the market fluctuations, I solely want to stay invested in companies that will hopefully allow me to create a flow of income that does not force me to draw from a capital pool, thus moving my focus away from price. This will hopefully also eliminate the emotional aspect of investing. I talk to grandparents and retirees, and they talk about the ups and downs off the market and how their portfolios are effected. I don’t want this to be me.
Also – the great thing about a dividend growth portfolio that focuses on an income stream, is that over time, your total capital appreciation should increase as well. Only well-run, profitable companies can consistently grow earnings and continue growing dividend payments. Price follows earnings over the long haul.
Start young, buy a diversified basket of quality companies with a history of creating an ever increasing yield on cost, and focus on your dividend stream, not price or any arbitrary nest-egg amount.
Then I live on the dividends/income rather than having to sell some of the base assets to generate income. That has to be tough for folks to do in down markets.
Some people think that “It does not make one bit of difference whether you finance retirement from “income” or the sale of assets.”
WRONG!
It makes a huge difference.
There’s a difference between eating the eggs (“income”), and killing the chicken (“sale of assets”).
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