I don’t have any big updates on the Real Money Portfolio this week, or on my big-picture thinking (still holding a lot more cash than usual, still being mindful of stop loss triggers for momentum/growth stocks, still hoping some of my favorites will reach prices that inspire a buy soon, since we’re right in the middle of “tax loss selling” season), so I’m going to focus on a teaser pitch for you today.
Marc Lichtenfeld is pitching his Oxford Income Letter ($79/yr) with an ad about “Extreme Dividends” — and with everyone feeling a little shaky after a couple tumultuous months in the market, dividends and “money in your hand” offer some solace, so maybe some of his ideas will strike your fancy.
The basic spiel is wildly exaggerated, like many income investment newsletters — he talks up the idea of investing in the stock and “soon” having your investment repaid by huge dividends, getting to the point where your quarterly dividend is as large as the amount you originally invested (“EXTREME DIVIDENDS! The Only Way to Earn More Than 100% Income on Your Money Every Year… for Life…”)
That kind of recurring gain is possible, of course, if you find a company that’s on a strong “dividend growth trajectory” and has staying power, particularly if you find it when it’s not yet beloved (or even trusted), but it typically takes good stock selection and lots of patience — usually for decades. And “possible” is not anywhere near the same as “likely” — there’s a reason why the folks who squirreled away a little bit of a dividend-paying stock, let the dividends compound, and waited 30 or 50 years to become multimillionaires are great stories, it’s because that doesn’t usually happen. Compounding dividends and long-term patience have indeed built some fortunes, but they don’t usually do so on the back of just a single purchase at just the right time — they do so on the back of continuing, disciplined regular investment in strong and steady stocks that most of us would typically think of as “blue chips,” at least in retrospect.
Here’s a bit of the hype that gets your attention:
“I’m going to teach you the only proven way I know you could generate 100% income yields on your savings every year… for life.
“This means that ...