I used to be a self-claimed value investor. I input a lot of time and effort to do stock analysis. I did achieve some good return. However, I found that I don't always have adequate time to do all those analysis. I was quite active in year 2009. However, due to some personal issues, I didn't participate in stock market at all in year 2010 the whole year and the first half of 2011. When I did have time to take a look at my portfolio, I ran some performance benchmarking my portfolio versus SPY in the same period. I was disappointed with the result. Although there were several outstanding stocks I own with very satisfactory performance, 80% of my portfolio had performance worse than the no-brainer SPY.
I learned several lessons from this experience: 1. to be a sensible long-term investor is much better than to be a short-term impulsive one. 2. having a long-term investment strategy to follow is very essential. 3. for a person like me, to purchase a stock with solid fundamental financials and then to "forget" all it after purchase is much suitable for my character. Capital gain is one of my goals, and long run dividend yield to cost return is much more attractive. 4. I always want to invest in real estate market which I believe can provide me more stable and more potential returns. However, currently I don't have enough money to invest in housing market, so I decided to set up two pillars for my retirement income account: dividend growth account to begin with, and real estate investment account later when enough money is accumulated.
My goal in dividend growth is to achieve 10% yield to cost in 10 years. This goal makes sense after analyzing several stocks initial yield and annual dividend growth rate.
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