Happy New Year!
I wanted to start this first post of 2024 with some inspiration from none other than Tom Connolly. The following quotes have been taken from his old newsletters but the message is still heard loud and clear 25 years later.
“If there is no income from an investment, return has to come from appreciation. Capital appreciation involves hope: dividends are real money and much more reliable.”
“I gradually buy common stocks which have paid a dividend for many years and hold them for the growing income.”
“The goal is neither growth nor income, but income growth. For instance, start with a yield of 7% and obtain a dividend growth rate of 4% and in ten years the yield alone will be 10%”.
“I never buy a stock on the basis of dividend yield alone. I investigate first.”
Sound advice.
Let’s not forget that when our companies slump so do most others. When the market is down many investors are in the red but at least as dividend growth investors we continue to earn an income, and, better yet, one that increases year after year.
A few months ago in one of my newsletters, I included a chart that demonstrated how the dividend income of each company I followed had increased over 10 years. Many were well over 100%. This assumed that no other shares were purchased and demonstrated how dividend increases have a significant impact on the growth of your investment income.
Here’s my updated list showing dividend growth from 2014 to 2023: