Let’s be honest. The market has been boring, really boring for the last year and a half. It’s gone up. It’s gone down, but only in a limited range. Yes, the tech stocks have been the lever that moved it all. Yet they moved the market NO WHERE.
My focus recently lately has been buying income streams. This means buying quality companies with dividends that are rising. Yes, this strategy is boring, but beautiful. These companies might have lower dividend yields. Those yields keep rising year in and year out. And, based upon what you have paid for the stock, the yield becomes sweeter and sweeter. The key is the long term – plus ten years. I am happy as hell to own them.
You don’t have to be on the “bleeding edge” all the time. In investing, there is a time to be and not to be. Now is not that time.
In March of 2022, I was advocating buying money markets who were starting to show life (green shoots) after a long period of small to nothing income returns. Ok, everyone now is moving to money markets. In my mind, that means, “the gig is up”. When everyone starts doing what you are doing, that is my clear sign to move on.
If you hold these companies long term, like MCD over the last ten years, your initial capital costs are covered by the dividend more and more. This means your initial investment eventually is covered by the cumulative dividends over your investment period. The IRR on those returns may be 10 to 13 percent, but they help you “tread water” and look for the next investment growth period.
So, stay covered with quality stocks and position for the next growth phase by owning “income steams” for now. This means owning REIT’s (in the right areas) and steady dividend payers. Build your income streams to support the next step up when it occurs and you’ll have the funding for the next real step up.
Step up my friends. Step up.
Be smart, be well-read, be aware and be successful.
It is not important to be better than someone else, but to be better than yesterday.
Kano Jigoro
