Investing Wish List: Really Naughty or Kind of Nice?
There is nothing like a good list to lift one’s spirits. Kids of all ages begin December with a Christmas gift list and end December with their list of New Year’s Resolutions. We seldom get everything on our lists, but those scribbles do help shape our plans and expectations.
What’s on your Wish List? Creating an investment wish list can be quite simple. Do you want your investments to put a check in the mailbox or to grow like weeds after summer storms? Is investing a do-it-yourself passion or a do-it-for-me task? Can you sleep knowing your investments support pollution, pornography and poor health, or is it important that your finances are in lock-step with your personal priorities? Investing wish lists should never start with dollar signs or return percentages. Those are the bobbles and bangles that create the kid-in-the-candy-store appetite with the tech-bubble hangover.
One of My Favorite Lists One of my favorite investing lists is the Dividend Artistocrats; a group of companies which have raised their dividends, annually, for more than 25 years. This list, created by Standard & Poors, currently holds just 57 companies. Each year S&P updates this list of dividend-growth companies that have been naughty or nice; deleting naughty names which have failed to increase dividends, and adding nice companies whose good dividend behavior allows them to join this prestigious group. The list isn’t an end-all-be-all list, but serves as a starting point to find potential investments. With global headlines and Washington angst creating short-term market volatility, a dividend-growth philosophy helps investors find companies with long track records of paying their shareholders.
By way of example, Johnson & Johnson (JNJ) has made some unfavorable recent headlines, driving the stock price down significantly. But headlines aren’t new to the company that has increased its dividend EVERY year for 56 years. Income focused investors have been rewarded with dividends that grew an average of 7.4%, annually over the past decade. And for you investing Grinches, JNJ’s dividend growth streak includes six recessions. But, before making any investments be sure to check your list and check it twice, ‘cause investors must know who’s been naughty or might be nice. Need one of Santa’s helpers to review your list or financial plan? Just give us a ho-ho holler!