Dividends And Reasonable Price Appreciation: Introducing The 'DARPA' Portfolio
Published Sep 13, 2020 on Seeking Alpha

Seeking AlphaDividend StrategyDividends And Reasonable Price Appreciation: Introducing The 'DARPA' PortfolioSep. 13, 2020 12:31 PM ET|| Includes: ABC, AMGN, AMP, BLK, BMY, CL, CSCO, GD, HD, HSY, KMB, LMT, LOW, MMM, T, TROWby: Psycho AnalystPsycho Analyst Long Only, Value, Growth At Reasonable Price, healthcareSummaryFocusing exclusively on dividend income can lead to substantial erosion of a portfolio over time if the dividends are high because the companies are stagnant.
Careful investors can find quality dividends in stocks that offer reasonable price appreciation too.
We will track stocks that currently meet the criteria for quality, good dividends, and growth prospects and those that could meet those criteria after a market downturn.
Interest rates are now at previously unimaginably low levels and likely to stay there for some time. This poses a challenge to investors who have hitherto relied on bonds or CDs for income, particularly those of us in retirement. In my previous articles, about the SCHED dividend ETF and several stocks I considered well valued dividend payers, I surveyed what is currently available to the investor who wishes to buy dividend stocks right now to replace lost bond and CD income without paying too much. But as I researched this topic, I discovered that almost all dividend stocks right now have been bid up to unsustainably high valuations or else are the stocks of companies that face serious headwinds that make it possible that they are value traps, not value stocks.
Don't Lose Money Chasing Dividends
I come to investing in dividend stocks as someone who has usually concentrated on share price growth when making stock investments, since I was content to draw income from the higher yielding CDs I was able to find over the last decade. So I find myself uncomfortable with the idea of buying a stock solely for its dividend. I had foolishly let myself be swayed by enthusiastic dividend-centric investors into buying... Read more