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.

Accurately knowing yourself as an investor is the foundation of everything—avoiding selling low is the critical ingredient to long-term stock market success, and you should only buy … Read the rest of this article!