Comments on: 2006 Results for The Dividend Guy http://www.thedividendguyblog.com/2006-results-for-the-dividend-guy/ One Guy's Journey to Passive Income Through Dividend Investing Sun, 14 Mar 2010 11:17:23 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: pfstock http://www.thedividendguyblog.com/2006-results-for-the-dividend-guy/comment-page-1/#comment-8644 pfstock Sat, 27 Jan 2007 01:14:14 +0000 http://www.thedividendguyblog.com/2006/12/30/2006-results-for-the-dividend-guy/#comment-8644 I'm going to make two predictions and one assumption. The assumption is that you will almost certainly achieve goal #2. Dividend paying companies are under great pressure from their shareholders to increase dividends or at the very least not decrease them even during an economic downturn. And since you are probably reinvesting your dividends, you will have an increasing number of shares on which to collect dividends. These two facts make it a virtual guarantee that you will achieve your goal of increasing your dividend payments, unless you sell your dividend paying stocks. Prediction #1: 2007 will be like 2003. In 2003, the "Stock Market" increased by 26%. Suppose that in 2007 the stock market goes up 26%, but your return is only 21%. Then you would be writing a post very similar to this one stating that you didn't meet your goal, and you'd be looking for reasons why. Prediction #2: 2007 will be like 2002. In 2002, the stock market decreased by 23%. Suppose this happens again in 2007, but your portfolio loss is only 18%. Then you would be writing a post stating that you achieved both of your goals. Although both the index and your portfolio went down, you'd be able to congratulate yourself because you didn't lose as much as if you had invested in "the Index". Which scenario would you rather have? One has to be careful when setting goals; I, personally, would not consider scenario #2 to be satisfactory, even though the stated goals have been met. Note: "Stock Market" = annual U.S. S&P500 return excluding dividends. <a href="http://pfstock.blogspot.com/2006/09/backwards-investor.html" title="Further Reading" rel="nofollow"></a> I’m going to make two predictions and one assumption. The assumption is that you will almost certainly achieve goal #2. Dividend paying companies are under great pressure from their shareholders to increase dividends or at the very least not decrease them even during an economic downturn. And since you are probably reinvesting your dividends, you will have an increasing number of shares on which to collect dividends. These two facts make it a virtual guarantee that you will achieve your goal of increasing your dividend payments, unless you sell your dividend paying stocks.

Prediction #1: 2007 will be like 2003. In 2003, the “Stock Market” increased by 26%. Suppose that in 2007 the stock market goes up 26%, but your return is only 21%. Then you would be writing a post very similar to this one stating that you didn’t meet your goal, and you’d be looking for reasons why.

Prediction #2: 2007 will be like 2002. In 2002, the stock market decreased by 23%. Suppose this happens again in 2007, but your portfolio loss is only 18%. Then you would be writing a post stating that you achieved both of your goals. Although both the index and your portfolio went down, you’d be able to congratulate yourself because you didn’t lose as much as if you had invested in “the Index”.

Which scenario would you rather have? One has to be careful when setting goals; I, personally, would not consider scenario #2 to be satisfactory, even though the stated goals have been met.

Note: “Stock Market” = annual U.S. S&P500 return excluding dividends.

]]> By: Tim http://www.thedividendguyblog.com/2006-results-for-the-dividend-guy/comment-page-1/#comment-5266 Tim Tue, 02 Jan 2007 21:54:58 +0000 http://www.thedividendguyblog.com/2006/12/30/2006-results-for-the-dividend-guy/#comment-5266 Nice job. I think your strategy of growing your dividends will pay off nicely. I don't find it surprising you lagged a bit for a strong up year for the market. You should really out perform in flat or down years. Nice job. I think your strategy of growing your dividends will pay off nicely. I don’t find it surprising you lagged a bit for a strong up year for the market. You should really out perform in flat or down years.

]]> By: Mighty Bargain Hunter » Welcome to the Carnival of Personal Finance #81 http://www.thedividendguyblog.com/2006-results-for-the-dividend-guy/comment-page-1/#comment-5240 Mighty Bargain Hunter » Welcome to the Carnival of Personal Finance #81 Tue, 02 Jan 2007 05:18:22 +0000 http://www.thedividendguyblog.com/2006/12/30/2006-results-for-the-dividend-guy/#comment-5240 [...] ‘Tis the time for 2006 wrap-ups and The Dividend Guy tells us how he did. [...] [...] ‘Tis the time for 2006 wrap-ups and The Dividend Guy tells us how he did. [...]

]]> By: yielder http://www.thedividendguyblog.com/2006-results-for-the-dividend-guy/comment-page-1/#comment-5175 yielder Sun, 31 Dec 2006 09:58:21 +0000 http://www.thedividendguyblog.com/2006/12/30/2006-results-for-the-dividend-guy/#comment-5175 Do you care about beating the index or do you care about beating inflation? If you are looking for "Passive Income Through Dividend Investing", your focus is on income from dividends not market growth. If your focus is on dividends, you care about dividend growth. Looking at what you own, I'd say that you beat inflation handily although it would be interesting to see a weighted dividend growth figure. All the best in the New Year, Mike Do you care about beating the index or do you care about beating inflation? If you are looking for “Passive Income Through Dividend Investing”, your focus is on income from dividends not market growth. If your focus is on dividends, you care about dividend growth.

Looking at what you own, I’d say that you beat inflation handily although it would be interesting to see a weighted dividend growth figure.

All the best in the New Year,
Mike

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