The Best Dividend Stocks To Buy In A Red Hot Market
Due to reader requests, I've decided to break up my weekly "Best Dividend Stocks To Buy This Week" series into two parts.
One will be the weekly watchlist article (with the best ideas for new money at any given time). The other will be the portfolio update.
To also make those more digestible, I'm breaking out the intro for the weekly series into a revised introduction and reference article on the 3 rules for using margin safely and profitably (which will no longer be included in those future articles).
To minimize reader confusion, I will be providing portfolio updates on a rotating three-week schedule. This means an update every three weeks on:
my retirement portfolio (where I keep 100% of my life savings) the model Deep Value Dividend Growth Portfolio (beating the market by 6.3% after 17 weeks) the model Bunker Dividend Growth Portfolio (100% undervalued Dividend Aristocrats and kings)
Why Valuation ALWAYS Matters
Even the best companies can make terrible investments if you overpay. A Yale study looking at market returns from 1881 to 2016 found that starting P/E ratio had a significant effect on total returns out to 30 years. What's more, in the past few decades, valuation has explained about 45% of the market's forward 5-year returns.
Data as of March 2019
In other words, buy-and-hold investors can't just blindly buy great companies at any price but need to remember Buffett's famous quote, "It's far better to buy a wonderful company at a fair... Read more