Trust. It's almost a quaint word when each day brings us more bad news about the folks running our companies. Another insider trading scandal. Another corporate expense account maxed out at a strip club. Another CEO getting paid eight figures to destroy ten figures of shareholder value. Perhaps this is why I've noticed a renewed interest in stocks that tangibly show their trustworthiness by regularly returning cold, hard cash to shareholders.
To beat the market, though, we have to get more granular. We can buy into the 42 Dividend Aristocrats to make a more dividend-rich portfolio, hone it down further to my list of 10, or pick and choose individual bets from among the 10. With each granular step, we lose some of the safety of diversification and gain the possible advantage of stock picking. Salt to taste. Personally, I anchor my stock portfolio with broad indexes like the S&P 500 and trusted mutual funds. Then I layer in individual stock picks I've spent the time to research.
Source: Motley Fool
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