Appreciating The Small Steps Of Dividend Growth Investing

A new article of mine has been published on the investing website Seeking Alpha. The article is entitled Appreciating The Small Steps Of Dividend Growth Investing and it discusses productive ways in which investors can think about the small dividends received in the early years of investing. I would like to thank my fellow bloggers for inspiring some of the ideas in the article.

Dividend Growth Investing Strategy: Benefit From “Other Persons’ Mistakes”

A new article of mine has been published on the investing website Seeking Alpha. The article is entitled Dividend Growth Investing Strategy: Benefit From "Other Persons' Mistakes" and discusses how dividend growth investors can take advantage of broad market declines.

Note that my articles appear under the username "Dividend Growth Machine."

The Psychology Of Dividend Growth Investing: Defining Success

I am pleased to announce that I have just published my first article on the investing website Seeking Alpha. The article is entitled The Psychology Of Dividend Growth Investing: Defining Success and discusses how investing success can be defined from a dividend growth perspective.

Note that my articles will appear under the username "Dividend Growth Machine" because the SA Editors did not think "Deedubs" was a suitable author name.

Keeping Things in Perspective

It can be frustrating when you buy a stock only to see it fall in price soon after your purchase. Case in point: My purchase of NSC yesterday.

As I mentioned in my post about the purchase, the stock's price has been declining this year (despite no bad news or change in the company's fundamentals), so I felt compelled to take advantage of it being "on sale." Little did I know that the very next day (today) the market would see its biggest one-day loss thus far in 2012 and NSC would go down another 2.6%.

It is easy to get upset when this happens and I'll admit that I was a bit frustrated. However, at times like this I find it helpful to remind myself of the following points:

• Short-term price fluctuations are essentially impossible to predict, which is why market timing rarely works. I could not have predicted that the price would drop 2.6% today, so there is little sense in getting frustrated about it.
• My purchase price was a price at which I deemed I was getting a good stock at a good value, and that remains true. How would I have felt if the price had shot up and I had missed the opportunity to buy the stock when it was on sale? Indeed, I missed plenty of great buying opportunities last fall that would have led to double-digit gains by this time.
• If the price continues to fall, then I will have the opportunity to buy the stock at an even greater discount. (Whether I do will depend on the availability of cash and how much larger I am willing to make my position.)
• The purchase is intended as a long-term investment, so years from now I will not care about a price difference of a few percentage points.
• The price difference amounts to about $30, which is trivial relative to the size of my position and the rest of my portfolio. Moreover, I've spent $30 countless times on far less important things in my life -- and none of those things paid dividends.
• My primary investing goal is to create a sustainable, rising stream of dividend income, and my purchase is entirely consistent with that goal.

Thus, I think a major psychological aspect of being a good investor is learning to keep things in perspective -- to let rational thinking supplant emotional reactions. It is not an easy thing to do and it is something with which I still struggle, but I think that writing about it on this blog helps my thinking about investing.