Dear DTA,
I’ve been reading through some articles. Thanks for putting this together. Just wondering if there’s a way to isolate the best trades? I’m looking for my best opportunities.
-Rebecca V.
Hi, Rebecca.
Thanks for reading. And thanks for writing in, too.
You’ve got a great question there.
So many stocks, so little money. So many ideas, so little time.
There are a lot of investment opportunities out there.
But it can be tough to isolate the “best of the best”.
I’ll give you my perspective on this.
Keep in mind, this perspective is shaped by almost 10 years of experience in the stock market.
By regularly investing in some of the best businesses in the world, I was able to retire in my early 30s.
I even lay out precisely how I did that, in my Early Retirement Blueprint.
Suffice to say, I didn’t do it by investing in bad ideas or low-quality stocks.
No, I invested in high-quality, world-class businesses.
You can find exactly which stocks I own by looking at my FIRE Fund.
The FIRE Fund is my real-money stock portfolio.
And it generates the five-figure passive dividend income I live off of.
The Fund was built by following a particular investment strategy.
I decided almost 10 years ago to take up dividend growth investing.
Dividend growth investing almost guarantees that you’re going to be sticking to the “best of the best” stocks.
Just check out what I mean by looking at the Dividend Champions, Contenders, and Challengers list.
That spreadsheet contains invaluable information on more than 800 US-listed stocks that have raised dividends each year for at least the last five consecutive years.
If you peruse that list, you’ll notice household name after household name.
It makes sense in an intuitive way.
The only way you can pay growing dividends year after year is to produce growing profit year after year.
And the only way to produce growing profit year after year is to run the kind of quality business that earns growing profit in the marketplace.
This means selling the products and/or services the world demands.
And with that demand comes rising prices over time, along with more people buying more products and/or services.
A company needs to do a lot of things right in order to fund reliable, growing dividends for years on end.
As such, a lengthy track record of growing dividends is a fantastic initial litmus test for business quality.
If you’re looking for the “best of the best”, you should be looking at high-quality dividend growth stocks.
Don’t believe me?
Maybe Warren Buffett might be able to convince you.
The $200+ billion common stock portfolio Buffett oversees is filled with dividend growth stocks.
Dividend growth investing isn’t terribly difficult to learn and follow, Rebecca.
But you’ll have to take some time to educate yourself.
I have plenty of resources for you to take advantage of.
Fellow contributor Dave Van Knapp put together a fantastic series of articles that are designed to teach what dividend growth investing is, why it’s so powerful, and how to successfully implement it.
Make sure to thoroughly read through his Dividend Growth Investing Lessons for more on all of that.
You’ll find yourself fully prepared to identify the “best of the best” in no time.
Further aiding you in this quest is a series I personally helm.
That’s the Undervalued Dividend Growth Stock of the Week series.
Every Sunday, I reveal a high-quality dividend growth stock that appears to be undervalued at the time of publication.
These stocks undergo a rigorous analysis and valuation process.
I then share these opportunities with the investment community.
Again, these are some of the “best of the best” stocks.
I totally understand where you’re coming from, Rebecca.
Focusing on the best opportunities out there is a great way to approach investing.
The resources I’ve shared with you today can help you build your investment framework and better home in on the best stocks out there.
It’s up to you to follow through, read the content, and apply the information.
So make sure to do just that.
And start today.
I wish you luck and success.
Jason Fieber
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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.