In the current environment of low interest rates, international fiscal instability, and the prospects for rising rates, we believe that dividend growth strategies should continue to outperform the market as they consistently have since the U.S. stock market peaked in 2000.
Our investment methodology has impressive back tested results over the last 12 years:
- Our five stock dividend growth v1.1 strategy has a 20.92% annual total return versus 4.4% for the S&P 500. 16.52% outperformance over 12 years is exceptional. The average holding period of this strategy is 278 trading days. This means that on average you can hold these stocks a full year so that taxable accounts can enjoy more favorable capital gains and dividend tax rates. This concentrated portfolio has an average yield of 5.324% as of March 23,2013.
- Our fourteen stock Dividend Growth Plus V3 has an annualized 18.29% return vs. the S&P 500 TR of 4.4% or 13.89% annualized outperformance. We utilize macroeconomic and market risk management overlays, require stocks have a minimum market capitalization of $100 million, exclude all finance stocks, have positive earnings trends, dividend growth, and positive price momentum.
We seek to find companies with earning momentum, dividend growth, and positive price action that should produce excellent returns for investors and provide the income needed for living or operating expenses far more effectively than bond investing. We are at the end of a thirty year bull market in U.S. Treasuries which have seen the ten year U.S. Treasury yield decline from 15.32% in September 1981 to 1.53% in July 2012. We fear that over the coming years, rates will rise and those investors and portfolios that have not reallocated may be hurt. Both retirement and endowment cash flows may suffer and portfolio values may decline and possibly crash as ten year US treasury yields rise from 2% to the 4-6% range over the years ahead.
We offer a variety of income and quantitative strategies which we can combine to meet your financial need. Please contact us to receive more information on our investment strategies.