Dividend Growth Is Not Ideal For The (Ultra) Small Investor
In my last article, I compared the short- and long-term results of investing a $10,000 stake in closed-end funds to that of using a dividend growth investing strategy. The shorter-term results favored the CEF portfolio, and the long-term results favored the DGI approach.
Here is what I stated in my previous article, which became the impetus for this one:
I believe that the DGI strategy is the better long-term track for my children. But there aren't many teens or twenty-somethings that have $10,000 to invest. Mine sure don't --- not even close!
As a matter of fact, our boys in their twenties barely have two nickels to rub together, but I know it's only a matter of time for them to come around to setting money aside for investing. We won't do that for them because previous experience tells us that financial assistance has little lasting value. They need some skin in the game.
Our girls, in their teens, will have a better crack at it. Mostly because I know so much more than I did ten years ago, and have since been far more diligent in passing on what I've learned about budgeting, investing, and planning for the future.
As stated in my previous article:
So in light of the topic and the results of my research, I turned my thoughts to 'what stock should my 17 year old daughter put her $250 into?' After all these recent conclusions, the answer was not as forthcoming as you might think. I discovered a weakness in this investing strategy.
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