Dividend Growth Portfolio 4th Quarter Letter To Investors

With one quarter left to go in 2018, there are three things on investors' minds: the Fed, the coming mid-term elections, and the ongoing trade war. Thus far, the market has mostly shrugged off these concerns, though income-focused investments such as bonds, REITs and dividend-paying stocks have had a hard time gaining traction.
Sizemore Capital's Dividend Growth portfolio, which invests primarily in higher-yielding securities, has also had a hard time gaining traction in 2018. The portfolio returned 0.14% in the third quarter and 0.53% in the year-to-date through September 30. This compares to 7.2% in the third quarter and 9.0% year-to-date for the S&P 500 and 5.1% and 1.6% for the S&P 500 Value. (Returns data calculated from the performance of Sizemore Capital's Dividend Growth model at Interactive Brokers; past performance is no guarantee of future results).
Given its focus on attractively priced stocks paying above-market dividend yields, I consider the S&P 500 Value to be a more accurate benchmark than the standard S&P 500. And frankly, it's been a difficult market for value strategies.
Value vs. Growth Over time, value strategies have proven to outperform.
This is not my opinion. This is empirical fact. In their landmark 1993 paper, University of Chicago professors Eugene Fama and Kenneth French found that value stocks outperform over time. More recent research by BlackRock found that in the 90 years through 2017, value has... Read more