Data sources can be misleading about your returns. Most sources ignore dividends and only show price returns. When a major news network reports what the market did that day, they speak only of price returns. "The Dow went up 118.86 today." The charts on CNBC, Morningstar, Seeking Alpha, Yahoo - they are all price charts. Price-only charts. Your brokerage's displays are probably price charts. Mine are at E-Trade. What if you reinvest dividends? The return picture changes dramatically if dividends are reinvested.
A Berkshire shareholder receives the benefit of this compounding via BRK's share price, which is an interpretation by the market of BRK's business value. As with all stocks, BRK's price goes up and down. An individual investor can set up a Grahamian "investment operation" that follows the same general model. That is what I try to do as a dividend growth investor. I collect cash from my assets, then I redeploy that cash to collect even more next year. That is compounding.
Source: Seeking Alpha
Related Articles:
- 7 Higher-Yielding Stocks With A Low Price To Book
- Don't Forget: Buy And Hold Is Not Buy And Forget
- 5 Stocks With Strong Dividend Growth Metrics
- Are Defense Stocks Good Defensive Stocks?
- International Securities For A Diversified Income Portfolio
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Even after multiple rate hikes from the U.S. Federal Reserve, savings accounts are still paying next to nothing. That’s why over the last se...
-
These stocks are a safe bet to increase your portfolio value as they provide both steady income and cushion against market risks. A large pa...
-
In bull markets, dividends become more or less irrelevant. When the Dow Jones Industrial Average traded above 14,000 in 2007, very few stoc...
-
I love getting paid to invest, which is why I've filled my portfolio with income stocks. My favorites are those that not only pay genero...
-
This is one of our top dividend-paying companies that can help boost the investment income in your portfolio. These stocks are a safe way to...
-
A big worry for retirees isn't necessarily the size of their nest eggs, but whether they'll keep up with inflation. While convention...
-
Tracking down a stock that pays a high yield is easy enough to find, but selecting ones that are worth holding onto for decades to come is q...
-
Many investors label companies with long dividend track records as “dividend aristocrats.” That is not just a catchy term. There are indices...
-
Not all dividend-paying companies make a lot of money, but the ones that do could fetch you solid returns in the long run, simply because a ...
-
In some dividend investors' minds, there's no such thing as too much dividend income. Yet often, stocks that carry extremely high di...
0 comments
Post a Comment
Post a Comment