The Dividend Aristocrats

"The One Strategy That Beats Wall Street" written by James Altucher is one of the best article I have read on shares investment in a long while.

It is solid common sense to win over impatient investors who are raring to make a killing in the stock markets at a fast and furious pace by pouncing on what's hot and throwing caution to the wind.

When it comes to shares investment, what is 'boring' with consistency may well give you a better return on your bucks. So, buckle up on a less Ferrari-like vehicle and look through a windscreen for companies that pay dividends unfailingly.

Photo by Caleb Woods on Unsplash

As Altucher let on, "Dividends are the simplest way to collect a piece of a company’s cash flow. When a company pays a dividend, it shows they’re serious about sharing profits with investors. Every other smart investor I’ve met says the same thing."

Click here for The One Strategy That Beats Wall Street and meet the so-called Dividend Aristocrats.

To digress, you may be torn between buying a blue-chip share which costs a lot more per unit as opposed to, say, a Real Estate Investment Trust (REIT).

In Singapore context, a bank like DBS Group Holdings Ltd may pay an annual dividend of, say, SGD 1.20. Based on its recent closing price of SGD 28.30, the return on an investment of 1,000 shares costing SGD 28,300.00 would be SGD 1,200.00 (4.24%).

On the other hand, a REIT like Ascott Residence Trust may distribute SGD 0.08 per units per annum and 1,000 units costing SGD 1,110.00 (based on its recent closing price of SGD 1.11) would yield an income of SGD 80.00 (7.20%).

Other things being equal, it would seem that you would be better off with Ascott in the above scenario. 

But, of course, in reality, there is a host of these other factors which could affect the outcome of your investment choice. For example, DBS may have a bigger upside or downside in price movement and Ascott's future performance is subject to a myriad of factors such as competition (or dominance, on the flip-side) and interest rates on its borrowings.

For sure, companies that pay good dividends annually are alive and kicking. The dividends they pay you is like a bird in the hand which is worth two in the bush of non-paying ones. Be sure to include some of these 'aristocrats' in your investment portfolio after doing your usual due diligence of the target companies you have in mind.