2017 could be the year that dividend growth becomes the most important aspect of income investing. In 2016 and recent years, low levels of inflation have meant that investors focused on higher yielding stocks. While this was enough when inflation has been at or near zero, a faster rising price level could mean that the…
There are generally considered to be two ways in which companies can grow their earnings. The first, and most common for businesses both large and small, is organic growth – whereby a company expands its existing, or “internal”, operations via increasing sales, breaking into new markets or launching new products for example. Inorganic, or acquisitive…
Sainsbury’s (LON:SBRY) has a rather strange growth strategy, given the outlook for the UK economy. Its purchase of Home Retail Group mans that it is becoming less defensive and more cyclical at a time when real disposable incomes seem certain to come under pressure. A mix of higher inflation and uncertainty regarding the economic outlook…
– Apple has struggled to innovate over the last several years compared to the other technology companies such as Facebook, Google, Amazon, and Tesla. – If a portfolio comprises technology stocks, shorting Apple may provide downside protection to your portfolio if and when the market corrects. – Investors have to be careful when shorting stocks,…
December’s Halifax House Price Index showed that house prices rose by just 0.2% in the last month. This gives a quarterly change of 0.8%, with the report warning that “house price growth may slow over the coming months”. That’s not surprising. Uncertainty surrounding Brexit, affordability issues and the potential for high inflation are all likely…
One major difference between investors who focus primarily on dividends and investors who focus primarily on capital gains is their time horizon. Companies that pay dividends usually do so every six months, so a dividend investor who buys into a company will often have to wait several months before their first dividend appears. Capital gains,…
Looking ahead to 2017, it feels as though there are a number of major risks facing investors. In fact, it is difficult to think of a more uncertain time since the credit crunch. The ‘no’ vote in the Italian referendum is but the latest challenge facing investors. Depending on who succeeds the now former Prime…
It’s easy to look at Brexit and come to the conclusion that it will be bad for all UK-focused companies. After all, it brings uncertainty, change and a potentially negative impact on the UK’s overall economic performance. However, as with any situation, there will be winners and losers. Some companies will see their sales and…
For most investors, it’s been a case of ‘so far, so good’ since the EU referendum. The only real impact of the result to leave the EU has been a weaker pound, which has benefited exporters and put pressure on importers. However, Brexit has not yet begun. Things could therefore get much, much worse for…
In recent months I’ve written about a range of dividend stocks from the high quality end of the spectrum: from Buffett-style stocks to consumer staples and consistent inflation-beaters. But being a dividend-focused investor is not only about buying into these high quality dividend growth companies. There is another side to the search for income –…
