Stocks

The Power Of Choice vs Blindfolded Monkeys

My favorite stock screener (Finviz) shows there are 3,749 stocks that pay dividends in its database.  There are no shortage of stocks to choose from.

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There's an idea that blindfolded monkeys throwing darts at pages of stock listings can do just as well as an intelligent investor.

I don't think that's correct.  Is Warren Buffett a great investor, or just the luckiest guy on the planet?  The answer seems obvious.

It's intelligence, discipline, and skill that determine investing success over the long run, not luck.

We get the choice of what stocks we invest in.  At Sure Dividend, we systematically (using The 8 Rules of Dividend Investing) look for stocks that:

  1. Are trading at fair or better prices
  2. Have shareholder friendly managements
  3. Have strong and durable competitive advantages

We choose not to invest in the thousands of dividend stocks out there that have spotty dividend histories, weak market positions, and/or terrible valuations.

You can make the same choice.

You can invest in the strongest businesses around trading at reasonable valuations, or you can speculate, or you can take the dart throwing monkey approach.

Speculation can lead to uncertainty and inferior returns.  More concretely, this can lead to a longer savings period (or indefinitely in the worst case scenario) before retirement.

On the other hand, high quality dividend growth stocks are likely to pay rising dividend income year in and year out.  A portfolio of these stocks gives investors a high likelihood of portfolio income that exceeds (hopefully greatly exceeds) the rate of inflation.

Investors looking for high quality stocks should take a look at the Dividend Kings and Dividend Aristocrats lists, which include stocks with 50+ and 25+ years of consecutive dividend increases respectively.

More specifically, I've listed out 3 high quality dividend growth stock buy ideas for the long-run below:

Disclosure:  I am long CAH and WBA.

All 3 are high quality dividend growth stocks with long histories of success.  All 3 are Dividend Aristocrats, and Procter & Gamble is a Dividend King as well.  All 3 are also trading at reasonable prices, even in today's generally overvalued markets.

The 3 examples above are all past Sure Dividend Newsletter recommendations.  I expect at least 1 (and possibly all 3) to be in the upcoming Sure Dividend Newsletter. The new edition comes out this Sunday.

The Sure Dividend Newsletter gives you access to detailed, to-the-point analysis on the 10 best dividend growth stocks each month, as ranked using The 8 Rules of Dividend Investing.

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Thanks,

Ben Reynolds

Sure Dividend

ValueWalk readers can click here to instantly access an exclusive $100 discount on Sure Dividend’s premium online course Invest Like The Best, which contains a case-study-based investigation of how 6 of the world’s best investors beat the market over time.