The Long, Long Term For Oil

It is hard not to sit up and take notice when you see that Royal Dutch Shell has delivered compounded returns for the buy-and-hold investor of 14% annually between 1911 and 2003. It’s been one of the best living, breathing examples of the notion that you only have to get one decision right in life to radically change your financial circumstances, and the particular case of Royal Dutch Shell comes with the important side benefit that much of the total return comes from the dividend income.

There are 50+ companies out there with similar 50+ year track records, but what distinguishes Royal Dutch Shell is that the total returns significantly exceed earnings growth. It applies The Philip Morris principle explained in Dr. Jeremy Siegel’s book research “Stocks for the Long Run” in which perpetual undervaluation enables reinvested dividends to give you a long-term result that is much better than you … Read the rest of this article!