Okay dividend growth investors, here’s the deal: your investment philosophy kinda sucks. Sure, it’s better than having a portfolio consisting on Netflix, Amazon, and Tesla, but it’s not great. There’s a few problems that I have with the whole process, including the focus on the dividend, (and the lack of focus on total return, which is far more important) the lack of small cap and value names in a portfolio, and the love of names that make products investors are familiar with, like Pepsico, Proctor and Gamble, Exxon, or Walmart.
Dividend growth investors always forget to realize that you can create your own dividend growth vehicle by investing in a preferred share or bond which yields 6% and just reinvest those dividends every year. Boom, I just grew your dividends 6% a year without doing a thing. But hey, keep thinking your method is the best.
Anyway, good news for all the dividend growth investors who follow me. I wrote a little piece over at Seeking Alpha on how easy it is to replace your painstakingly picked dividend growth portfolio. One ETF has provided superior returns as well as a growing dividend, and it does it all for a management expense fee of just 0.10%.
Now that I’ve freed up a lot of time, I suggest dividend growth investors get a different hobby. Like reading all my archives. Or golf. Or a mistress. Hey, whatever floats your boat.