RL150 — Dividend Growth vs High Dividends Now?
On the Retirement Lifestyle Show, Roshan Loungani and Eric Olson break down high yield versus dividend growth investing and which one might be right for you. They discuss what they are, how you can potentially use them in your portfolio, and even ways to get the best of both worlds.
[00:00] Introduction
[02:57] Dividend Growth Versus High-Yield Dividend Investing
[04:58] When to Choose High Dividend Growth Investing
[06:24] Common Criticisms of High-yield Dividend Investing
[09:16] Payoffs From High-yield Investments
[12:42] Performance Comparison From the Two Investment Strategies
[16:22] The Role of Time and Timing When Investing
[19:00] Companies Doing More Stock Buybacks Than Dividend Payoffs
[22:30] What is Shareholder Yield?
[24:15] Understanding the Enterprise Value of a Business
[27:05] Eric and Roshan’s Debate: Yield or Growth - Which Is Right for You?
[34:58] Why Being a Forced Seller is the Ultimate Worst Thing For Investors
[37:00] The Big Question: Income Versus Growth in a Portfolio
[43:30] The Pros and Cons of the Two Strategies For a Retiree
[48:02] Tips for Individual Investors
[50:32] Parting Thoughts
For more links and the full show notes keep scrolling down!
Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905.
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Full Show Notes:
Dividend Growth Investing Versus High-yield Dividend Investing
Dividend growth investing involves investing in companies that have a history of consistently increasing their dividends over time. The goal of this strategy is to build a portfolio of stocks that provides a growing stream of income, rather than relying on a high initial yield. The type of investors who prefer this strategy are looking for a long-term investment that will provide a reliable source of income for many years.
On the other hand, high-yield dividend investing involves investing in companies that have a high dividend yield, which is calculated by dividing the annual dividend by the stock price. Using this strategy, your goal as an investor is to generate a high level of income in the short-term, rather than focusing on long-term capital appreciation. This approach is often preferred by investors who are looking for a more immediate source of income, or who need to generate a high level of income to meet their financial goals.
Both dividend growth investing and high-yield dividend investing have their pros and cons, and the right approach for you will depend on your investment goals and risk tolerance. It's always a good idea to consult with a financial advisor before making any investment decisions.
All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.