Shailesh, you have someone here who is a value investor (a growth investor too). Most of my "stock-market money" is in dividend ETFs. Each contains 50+ stocks. They're all large established companies, almost household names. Value investing 💪
We've started with value as well. In our case, we looked at the S&P 500 dividend aristocrats. Perhaps not the perfect value example, it has been doing and is doing it's job. Within that pool we have seen returns of a little over 8% long-term (> 5 years). With growing dividends each year, the aggregate grows as well and provides a nice little extra cash flow, ready to invest.
Within that pool we observed that there are some that appear to be too popular at times and some that appeared to be out of fashion. Depending on what it was we either added to or trimmed the position. This helped with the returns.
However, we decide that this approach is just one stepping stone. For quite some time we then considered whether there is one or more industries that we might understand better than others. For example, we do not have experience in our family with the fashion industry or with luxury goods.
On the other hand, we do have experience in the IT sector. This gives us a little better understanding in areas like software, cloud, semiconductors, suppliers to those industries and similar more. As a result we added in companies in that space that we felt were great companies at acceptable prices. And this approach paid off quite nicely, pushing the annual return of our portfolio from 8% (purely dividend aristocrats) to about 14% at the moment.
Just some food for inspiration. I think, a lot of investors may have an edge as well, that helps with finding good stocks, beyond just value versus growth.
Happy investing!
Learn about how one of my friends is exploiting their edge in this free article:
Shailesh, you have someone here who is a value investor (a growth investor too). Most of my "stock-market money" is in dividend ETFs. Each contains 50+ stocks. They're all large established companies, almost household names. Value investing 💪
Very nice! It is great to have a consistent philosophy. Are you reinvesting dividends for dollar cost averaging?
Yes. I haven't hit my freedom number yet so DRIPping is the way to go.
We've started with value as well. In our case, we looked at the S&P 500 dividend aristocrats. Perhaps not the perfect value example, it has been doing and is doing it's job. Within that pool we have seen returns of a little over 8% long-term (> 5 years). With growing dividends each year, the aggregate grows as well and provides a nice little extra cash flow, ready to invest.
Within that pool we observed that there are some that appear to be too popular at times and some that appeared to be out of fashion. Depending on what it was we either added to or trimmed the position. This helped with the returns.
However, we decide that this approach is just one stepping stone. For quite some time we then considered whether there is one or more industries that we might understand better than others. For example, we do not have experience in our family with the fashion industry or with luxury goods.
On the other hand, we do have experience in the IT sector. This gives us a little better understanding in areas like software, cloud, semiconductors, suppliers to those industries and similar more. As a result we added in companies in that space that we felt were great companies at acceptable prices. And this approach paid off quite nicely, pushing the annual return of our portfolio from 8% (purely dividend aristocrats) to about 14% at the moment.
Just some food for inspiration. I think, a lot of investors may have an edge as well, that helps with finding good stocks, beyond just value versus growth.
Happy investing!
Learn about how one of my friends is exploiting their edge in this free article:
https://open.substack.com/pub/mannionmoney/p/what-is-your-edge?r=1c2kt&utm_campaign=post&utm_medium=web