Dividend Growth Or Closed-End Funds REVISITED

In August 2016, I published an article titled Dividend Growth Or Closed-End Funds: What's Your Time Horizon? In it, I compared both the growth of income and the compounded growth of investment between three strategies: a closed-end fund income strategy, a dividend-growth strategy, and a high-growth dividend strategy. The shorter-term income prospects (10-15 years) greatly favored the CEF strategy, and the long-term income prospects (30+ years) favored the Hi-DGI strategy. Long-term compounded growth on investment (30-40 years), in that study, were astronomically high for the Hi-DGI strategy. The mid-ground DGI strategy fell between the other two.
It was pointed out by one of my readers that a fault in a key premise I used in the extrapolation of data skewed the long-term results. I toyed with the idea of going back to the drawing board and creating a new data set, but instead I put it on the back burner. Recently, however, an article by a fellow SA author prompted re-evaluation of my previous analysis but with more care given to operating from a more realistic premise. Acknowledgements to Stanford Chemist and Steven Bavaria for getting the wheels turning again on this from a new perspective.
THE PROBLEM WITH THE OLD PREMISE The data set I created in my previous study was based on the premise that the share prices of dividend-growth stocks fluctuate up and down but average out flat over time. This was a faulty assumption on my part. Dividend-growth stocks grow their share... Read more

Older articles featuring CEFS: