Rating systems are great. They simplify things and give investors a quick overview of their portfolios. But it doesn’t consider your perception or goals. Knowing the pros and cons of a rating system will help you understand its role and limits. Let’s get started!
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- We start the episode by giving concrete examples of a rating system: The DSR PRO Rating and Dividend Safety Score. What do they mean, and how do we use them? This sets the context and gives listeners an idea of what should their own ratings be based on.
- Rating your holdings can help you create categories in your portfolio, such as core holdings, educated guesses, and falling knives.
- This will help investors easily identify problems and ease their buy & sell decisions. Mike explains how.
- Is the rating system time-sensitive? How many times a year should you revise it? What kinds of news should influence your rankings?
- There are many good free stock screeners available. However, following too many can get really confusing.
- Mike ends the episode by summarizing the pros and cons of a rating system.
Investors can classify their holdings into Core companies, Educated guesses and Falling Knives or Speculative Plays. Mike defines each category and gives stock examples in the episode below.
Are You Allowed to Speculate in a Dividend Portfolio? [Podcast]
A Dividend King is a company that has increased its dividend for at least 50 consecutive years. At first sight, the whole list feels pretty safe. But the past is never a guarantee for the future…
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