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9 Secrets of Dividend Investing

Many income-focused investors solely focus on the dividends when considering what to invest in. After all, bigger dividends equals more income. Right? Actually, this may not be the case all of the time. Take Matthew Page and Ian Mortimer, for example. These two mutual-fund managers take a different approach to deciding how to invest and where to place their faith. Instead of solely focusing on dividend yield, these two focus on the characteristics of the company, and how the company has fared in the past and is projected to fare in the future. They start their search by identifying a pool of companies with characteristics that exemplify long-term success. These companies are dividend growers who have a history of smart investment strategy and high returns on capital. Both of these traits indicate companies with the ability to continue hiking their dividends. However, these companies do not necessarily have to have the highest dividend yields in the market. A company with moderate dividend yields may actually be a better option because it has more room to grow, whereas companies with high dividend yields may have hit their ceiling. Ultimately, Page and Mortimer’s strategy may not be for you, but their ability to think innovatively is undeniable. For any investor, following the norm may not always be the best way. In Page and Mortimer’s case, they aren’t following the norm, and they are doing quite well for themselves. Investors everywhere can learn an important lesson from these two mutual-fund managers: always think outside of the box, and if you cannot, get an advisor who will for you.