Interview with the Dividend Guy

• What influenced you to start The Dividend Guy?

I have always had an interest in investing. I remember discovering my Grandfather’s version of “The Wealthy Barber” at their cabin where we spent many of our summers. I was about 12 years old (a long time ago) and I could not put the book down. Over the years I slowly moved away from mutual funds because of the high fees and poor performance into index funds and dividend stocks.

At the same time that was happening I was getting into reading blogs as a way to learn about the investing process. In my opinion, blogs were the best thing to happen to investing in a long time as it made the process much more transparent and people began to realize that they could do a lot on their own, without paying the high fees that brokers and investment advisors were charging. I just knew I needed to get one of these blogs and to learn more about investing and to track my progress.

• What are some of your favorite parts of investing in stocks?

I love the process of building a portfolio. The intellectual challenge of determining the right mix of assets to manage risk and reward is unbelievable. There is always something new to learn in the process and ways that you can improve your portfolio’s performance.

I also love the process of keeping track of portfolio performance, and I think it goes without saying that I enjoy researching dividend growth stocks.

• Can you explain the meaning of dividend in reference to stocks to readers who don’t quite understand?

A dividend is a payment to shareholders of a company. This payment comes from the excess earnings the company generates during its course of business. Some companies pay dividends and others do not.

The stocks I focus on are dividend growth stocks. These are companies that have a long history of increasing that dividend payment each and every year. In other words, investors earn more money from that stock as each year passes. I always reinvest those dividends into more stock so it really compounds my stock gains over the long term.

• What topics are the most popular on your site?

Without a doubt it is the discussions about dividend growth and how that can be built into a portfolio. The next most popular topic is asset allocation. I believe very strongly that asset allocation is the most important decision an investor needs to make (even more important than selecting dividend growth stocks) and talk a lot about that on the blog.

• Does it require much research before putting together a blog on stocks?

Much to my wife’s chagrin, I spend a lot of time on the blog. I enjoy writing but it can suck up a lot of time. Couple that with a “real job” and kids it can take a lot of time. I would say that I spend about 5 – 6 hours on the blog each week.

• What is some advice you would give to new investors in stocks?

I have really outlined what I would do it I were just starting out in this post (http://www.thedividendguyblog.com/how-would-i-invest-if-i-were-just-starting-out/). Start slow and learn as much as possible. Before jumping into buy individual stocks, build a core portfolio of index funds that are put together with an asset allocation that is well balanced and diversified. Include domestic equities, international equities, and fixed income. Then as time goes on and your portfolio gets bigger from contributions and (hopefully growth) you can expand to other asset classes and then ultimately dividend growth stocks.

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