You have permission to publish this article either electronically or in print, free of charge, as long as
author bylines are included. A courtesy copy of your publication would be appreciated. Please email to mailto:charles@thestockopolyplan.com Word Count (689)A Personal Stock Market Investment Philosophy
∙ Make every investment in stock market a long-term investment.
My Mother worked as a teller in a small bank in Dover, New Jersey. The name of bank was called The Dover Community Bank. While working at bank (she eventually became a branch manager) she enrolled in bank’s dividend reinvestment plan, making purchases of stock through pay-roll deductions. She continued purchasing stock through years, having dividends from her shares in bank reinvested into more shares every quarter. By time she left bank (in early seventies) she had accumulated around 300 shares of The Dover Community Bank.
My Father, when he retired, had dividends from those shares sent home – to help ends-meet. When my Dad passed away at age 80, my brother and I inherited over 7,600 shares of The Bank of New York, all originating from those 300 shares of what was once called The Dover Community Bank.
From this personal experience grew an investment philosophy that all stock market investments in a security should be purchased with intent of providing dividend income to help ends-meet during retirement, with understanding that no one can successfully retire without financial freedom. So every investment now in a security is purchased with intent of holding that security (and adding to it during years) until dividend income from that security is ample enough to ease loss of income from retiring from my job.
∙ Make every investment in stock market provide you with an ever-increasing cash dividend for rest of your life.
With philosophical investment approach of holding a security position forever, what criteria should I be looking for in that security? Certainly dividend income – that’s a given! And since I never intend to sell security, capital gains may not even be an issue.
I would argue that a company that just pays a dividend isn’t good enough. Instead, I will only purchase those companies that have a long history of raising their dividend every year. This will eliminate a whole bunch of risk. It would eliminate possibility that companyis ‘cooking their books;’ after all, money has to be there to pay shareholder. And because this company has been raising their dividend every year for many years, it eliminates risk of investing in a start-up company that may not even be around in a year or so.
