Jim Collins

When I worked in business, one of my opportunities included working for a CEO who believed in stretching us. This included getting our hands dirty in parts of the business that had “nothing” to do with our primary role or knowledge. Because I was the VP of Information Technology, that meant I needed to spend time in customer service, traveling with field sales representatives, working in the warehouse and spending time in accounts receivable. Those were valuable opportunities.

He also had us read good books about business. One was Jim Collin’s book Good to Great. Another was Built to Last. The idea was that we were to think about and work towards making our business better and sustainable.

Great Investments Are Not Hard to Find

Good to Great Investments

This mindset is also important for long-term investors. If you are a day-trader or swing trader, you may not care much about the business fundamentals. You are likely trading on sentiment, social  or media buzz, and/or momentum. Few can be successful in that murky and turbulent water. I prefer to sale on the bigger ships that have a long history of success. But I am not limited to large cap investments. I also seek midcap and small-cap investments that fit my investment profile.

Great Investments Grow Earnings and Dividends

Over the last twenty plus years, as I approached and entered my non-IT days of other types of productive work (retirement), I studied the ways I could invest to gain income and grow our investments with minimal work. My studies led me to focus on dividend growth companies and related ETF investments. Some companies have been paying increasing dividends since I was six years old. Translation: that means they have been paying an increasing dividend for 64 years. Granted, a company’s history is no guarantee of future results. However, I’d rather have a mix of companies that have weathered many different economic climates and political changes than a new company with a crew that might run a business aground.

AAII Top 20 S&P Dividend Aristocrats

All lists have flaws, especially any list that says it includes the “top” of anything. Much of this depends on the criteria for selecting the top ten or top whatever. In the attached image, we own shares of GPC, JNJ, ITW, and TGT. To say I am pleased with these investments is a gross understatement. They have done very well. But this list does not give the reader the important dividend payout ratio. Therefore, do not buy any investment on this list if you don’t understand that concept. Furthermore, you should pay attention to the column labeled “5-year EPS growth.” You may want to pause before you buy GPC or JNJ.

We own shares of many of these in ETF VYM. We also own those flagged 1-4.

VYM as a Tactic

It should not come as a surprise that these are the kinds of stocks that ETF VYM holds. In VYM’s top ten are JNJ and PG. ITW and TGT are also in VYM. That is why, as I reduce the number of stocks I own, I have been buying more shares of VYM. Cindie and I hold 1,859 shares of VYM in our retirement accounts.