46 responses

  1. optionsdude
    May 17, 2011

    No arguing that dividends are very important. I liked Jeremy Siegel’s book “Stocks for the Long Run” is a great read and stresses the importance of dividends as part of the overall return on stock investing. Even though Buffett doesn’t pay dividends, he sure likes to get them.

    • moneycone
      May 17, 2011

      Good point on Berkshire! Buffett’s contention is that he can better manage the money than his shareholders!!

  2. Travis@TradeTechSports
    May 17, 2011

    Really nice list. I always hate the investing marketers who say well if you buy now you can recover your money and or previous returns are…blah blah blah. This list proves with simple investing techniques you can make compounded returns very nicely even on the worst time frame for buying a stock.

    • moneycone
      May 17, 2011

      One more reason why I like dividend paying stocks!

  3. DIY Investor
    May 17, 2011

    Good list though I have to admit I prefer ETFs and would use DVY. Worth keeping in mind is that your list was for the “lost decade”. I have no doubt that if we have another “lost decade” your list will do spectacularly. But how will it do if we experience an extremely strong market with international markets leading the way? I wonder how it did for the 10 years ending at where your study started?
    Interesting analysis.

    • moneycone
      May 17, 2011

      The reason I started doing this was introspection. Was there a way to have made money during the lost decade and what should I do to not repeat the same mistakes if there was one more impending.

      One easy answer was gold! But I’m not much of a precious metals guy!

  4. retirebyforty
    May 17, 2011

    Great list! I am slowly moving my portfolio toward dividend stocks. I think it’ll be great for income and hopefully they’ll also see some gain over the next 10 years.

    • MoneyCone
      May 18, 2011

      I prefer them for the simple reason, if the company goes kaput, I would’ve at least would’ve made some money from the dividends!

  5. Untemplater
    May 17, 2011

    That’s awesome analysis! I was never gutsy or smart enough timing wise to mess with tech or finacial stocks myself. It is definitely refreshing to look at long term upward trends. I wish I made those kind of returns! I’m definitely not patient enough to ride out the ugly storms.

    • moneycone
      May 18, 2011

      True! When I bought these stocks I was least bothered if these went up or down – because long term, they have a better chance of success

  6. Ken Faulkenberry@AAAMPblog
    May 17, 2011

    What really interested me about your ariticle, besides the fact that I currently own 6 of the stocks on your list, is you seem to believe we are going to have another lost decade.
    I believe we must be prepared for another decade of huge volatility and a sideways or down market because these kinds of bear market usually last 17-20 years. In addition to the dot com bubble, we are still experiencing the unwinding of a housing bubble, and may be at the beginning of downsizing a bubble in government spending.
    Thanks for the great article!
    (http://AAAMPblog.com )

    • moneycone
      May 18, 2011

      I’m sure I’ll see turbulence! What I wanted to figure out was, if we were to have another bad stretch, how best I should invest.

      Because, on the face of it, it looked like, no matter where you invested in, you lost money! But this exercise proves that, that obviously not true!

      I went with the crowd during the last one and that didn’t turn out very well!

      • Ken Faulkenberry
        June 2, 2011

        Yes…following the crowd usually get us in trouble because none of us are smart enough to get out at the top. I use a tactical asset allocation strategy for the Arbor Asset Allocation Model Portfolio (AAAMP) which only lost 2% in 2008. I underperform the market when it’s rising but the net result is long term outperformance. It is more important to not lose money (because of compounding) than it is to capture all the gains in rising markets. Here is an explanation of my risk adverse strategy:
        http://ArborInvestmentPlanner.com/tactical-asset-allocation-strategy.php

  7. youngandthrifty
    May 17, 2011

    I’ve recently become a huge fan of dividend stable boring stocks… but do alot some of my portfolio to riskier type “gambles”. I don’t know why I do this, it’s silly!

    That’s a great list.

    • moneycone
      May 18, 2011

      We all our thrill dose right!

    • Money Reasons
      May 19, 2011

      Don’t feel too bad Young! I do the same thing… :)

  8. Spruce Up Your Finances
    May 17, 2011

    Great list! People have lost a lot of money during the downturn and investing money towards dividend paying companies with stable revenue streams is a nice strategy.

    • moneycone
      May 18, 2011

      Ken,
      The key is not dividend paying companies, the key is exclusion of Tech and Finance companies. Had I included financial companies (they used to pay dividends unlike tech companies), the results would be terrible.

  9. Robert @ The College Investor
    May 18, 2011

    Man I already own a bunch on that list! Good choices and smart screen!

    • moneycone
      May 18, 2011

      Thanks Robert!

  10. 101 Centavos
    May 18, 2011

    Steady, boring and predictable are all good things. They need to balance out the hairier parts of the portfolio.

    • moneycone
      May 18, 2011

      Most definitely!

  11. The Biz of Life
    May 18, 2011

    I’d argue just about every company today is a technology company, especially telephone and drug companies. Phone companies, in particular, have dim long-term growth prospects. In fact, they will have problems just maintaining where they are at now. Moore’s law for microchips has a corollary in the world of networks.

    • moneycone
      May 18, 2011

      The reason I exclude tech is not because tech companies don’t have prospects, but because it is hard to predict which will weather the storm considering how quickly technology changes.

      I exclude financial companies, because if these companies engage in ‘creative accounting’ it is hard to tell. We have to rely totally on auditors and we know how they did! Moody’s anyone?

      Plus I think there is poor oversight. Goldman Sachs played a key role in the crisis, yet they were fined $500 million, which is chump change! I’m sure their bean counters must’ve figured by now that by skirting the law, the cost if caught would much less than making money through shady deals.

      But it is easy to spot deficiencies if a company has a tangible product – less chances of creative accounting.

      Those are the two reasons I skip these sectors.

      Telecom giants hardly have competition thanks to restrictive deals – that’ll keep them humming for a while. (edited comment for clarity)

  12. Suba @ Wealth Informatics
    May 18, 2011

    Great list! We have been building a dividend portfolio outside of our retirement investments. We already have a few from the list JNJ, PG… I will look up your other ones too.

    • MoneyCone
      May 19, 2011

      Thanks Suba!

  13. Travis@TradeTechSports
    May 18, 2011

    Im with the earlier comment about stable and boring stocks that do well over the long. It seems nowdays a lot of fundamentals don’t matter because major news events and speculation moves the whole market regardless of what the company is doing.

    • MoneyCone
      May 19, 2011

      Speculation is good for day traders, but long term, fundamentals matter.

  14. Lawrence@CreditDonkey
    May 18, 2011

    The dividend really makes a difference with stocks. I really like your criteria’s there. This article was really helpful, thank you so much for sharing it. Another food for thought!

    • MoneyCone
      May 19, 2011

      Glad you liked it Lawrence!

  15. Jon
    May 19, 2011

    The key thing to remember is that any stock purchase should be considered a long term investment. For short term investments you play the volatile money markets, for long term safe investments you go for government bonds, then for the safest long term results you get blue chip stocks. But it seems that tech stock are still doing well.

    • moneycone
      May 19, 2011

      Always a balance between return and risk!

  16. krantcents
    May 19, 2011

    What I found interesting in your example is many of the p/e ratios went down, but the increases were greater. It shows you need a portfolio of stocks or a fund of stocks to spread the risk.

    • moneycone
      May 19, 2011

      I’m glad somebody noticed! There was a reason for sneaking in the PE data in the table!

      Great point KC!

  17. Money Reasons
    May 19, 2011

    Nice list, I hav VZ and MCD. I know people that have ABT and PEP, I don’t know why I haven’t pulled the trigger on those yet…

    • moneycone
      June 4, 2011

      All four are good stocks to hold MR.

  18. KS
    May 28, 2011

    I think a piece on international/emerging markets dividend stocks would be interesting for readers. International stocks have irregular dividends but offer greater growth potential and, most of the time, better dividend policies, namely they don’t force themselves to pay a dividend if they’re not profitable. I’m thinking TEF, CPL, SSL….

    • moneycone
      June 4, 2011

      Definitely food for thought KS.

  19. Little House
    May 29, 2011

    I’m just starting to build a dividend investing portfolio. Thanks for sharing this list and the outcome. Boring and predictable are just fine for me. ;)

    • moneycone
      June 4, 2011

      Stick with boring, predictable and profitable, you’ll come out ahead of the rest in the long run!

      Glad you like it LH!

  20. Squirrelers
    May 31, 2011

    Interesting analysis, I like it! Not sure how I missed it originally, but nice to read it now.

    Goes to show that over the long run, companies with good fundamentals (and cash rich?) can potentially be great investments. The craziness and volatility that’s seemingly become the norm just might be a distraction for the real long-term opportunities.

    • moneycone
      June 4, 2011

      Very true Squirrelers!

  21. Ken Faulkenberry
    June 2, 2011

    I have included this article in the “Best of Personal Finance Investing Blog Posts” at http://blog.ArborInvestmentPlanner.com/2011/06/best-of-personal-finance-investing-blog-posts-2

    • moneycone
      June 4, 2011

      Thanks Ken, much appreciated and honored!

  22. Dana
    June 7, 2011

    Devidens is surely a important signal to know a good stock (and company) that great as dependence stock in difficult time such as economy crisis.

  23. Buck Inspire
    June 24, 2011

    Awesome article MC! What lost decade? 65%? Amazing. I think human ego and pride get the best of us. No one likes boring. Everyone wants the homerun and to brag about it at the water cooler. 10 baggers anyone? Now that those days are behind me, sign me up for the boring portfolio!

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