My Philosophy On Low Dividend Stocks

Any investment that you would sell, upon encountering some adversity, is not worth holding no matter its long-term total return potential. There are plenty of stocks with great long-term characteristics—John Deere & Co. and its 12.5% annual compounding rate come to mind—but based on your individual profile, it could be a disastrous investment. It lost something like 75% of its stock market value during the last economic recession. Some people are not equipped to tolerate those kinds of losses. Other people save $5,000 per month, have fifty stocks in their portfolio, and could see John Deere’s $1 billion annual profits even during the worst of the recession, and power through the capital loss and maybe even add more if they were truly opportunistic.

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