DIVIDEND INCOME GROWTH STRATEGY
DIVIDEND INCOME GROWTH STRATEGY
The Dividend Income Growth Strategy is an investment approach focusing on companies that regularly pay dividends and consistently increase their dividend payouts. The goal is to generate a steadily increasing income stream over time alongside the potential for capital appreciation. This strategy is often favored by income-focused investors, particularly those in retirement or nearing retirement.
Key Elements of the Strategy:
​
-
Dividend-Paying Stocks: This strategy involves investing in stocks of companies that not only pay dividends but also have a history of increasing their dividend payouts. These companies are often well-established, have strong financial health, and generate consistent cash flow.
-
Long-Term Investment Horizon: The Dividend Income Growth strategy is typically a long-term investment approach. It requires patience to allow the power of compounding to take effect, as dividends are often reinvested to buy more shares, which in turn can generate more dividends.
-
Company Research: It's important to conduct in-depth research to identify companies with strong fundamentals, robust cash flow, and a commitment to returning capital to shareholders. Along with a history of dividend growth, we consider factors like the payout ratio (the proportion of earnings paid out as dividends), which can indicate the sustainability of the dividends.
-
Diversification: Diversification across sectors and industries can help to manage risk and enhance potential returns. Different sectors can perform differently under various economic conditions and tend to have different dividend payout patterns.
-
Reinvesting Dividends: Reinvesting dividends to buy more shares can significantly enhance returns over time. This takes advantage of compounding, allowing investors to earn "dividends on dividends."
-
Active Portfolio Management: Although the strategy is often long-term, active portfolio management is essential. We regularly monitor and evaluate the performance of the companies in the portfolio to ensure they continue to align with the strategy's objectives.
-
Risk Management: While dividend-paying stocks can provide a measure of stability compared to non-dividend-paying stocks, they are not risk-free. We regularly review the financial health of the companies in the portfolio and be alert to any signs of potential dividend cuts, such as falling profits or rising payout ratios.
Summary: The Dividend Income Growth strategy aims to provide investors with a growing income stream and the potential for capital appreciation over the long term. This strategy requires thorough research, patience, and a long-term investment horizon. It's also important to align the strategy with the investor's individual financial goals, risk tolerance, and income needs.
Strategies Overview
At Infinitus Wealth Management, we deliver personalized wealth management strategies that align with your specific financial objectives and individual risk tolerance. Our approach is grounded in a thorough understanding of global financial markets and consistent research, allowing us to construct diverse, resilient, and custom portfolios intended to withstand market volatility while pursuing attractive returns.
We build custom portfolios and offer multiple investment strategies to meet our clients' unique investment goals. We actively manage several US equity, international equity, fixed income, tax-exempt fixed income, and blended strategies ranging from large-cap to small-cap equity and income-generating strategies.
​
Asset Allocation: Our investment strategy starts with asset allocation, which we consider the most vital determinant of portfolio returns and risk management. We create a balanced mix of various asset classes, such as equities, fixed income, cash, real estate, and alternatives. The blend is customized to your risk appetite, financial objectives, and investment time horizon.
Diversification: We adhere to the principle of diversification among asset classes and within each asset class. By spreading investments across various sectors, geographic locations, and market capitalizations, we aim to mitigate risk potential.
Risk Management: Risk assessment forms a crucial part of our investment strategy. We continuously monitor and adjust portfolios to manage exposure to market risks. By utilizing advanced risk management techniques and tools, we ensure your portfolio aligns with your personal risk tolerance and long-term objectives.
Tactical Asset Allocation: We go beyond a static allocation approach by employing tactical asset allocation strategies. Our investment team actively adjusts the asset mix in response to short-term market predictions to exploit market inefficiencies or seize new opportunities while maintaining a balance with the strategic asset allocation targets.
Tax-Efficient Investing: Our strategies consider the impact of taxes on your investment returns. We aim to maximize after-tax returns through strategies like tax-loss harvesting, holding investments longer for favorable long-term capital gain rates, and strategically placing investments in tax-advantaged accounts.
Regular Portfolio Review and Rebalancing: Investment is not a one-time action but a dynamic process that requires ongoing oversight. We conduct regular reviews of your portfolio to ensure it remains in line with your goals and risk tolerance. Rebalancing, when necessary, helps maintain the desired level of risk and return.
At Infinitus Wealth Management, we understand that every client's investment journey is unique. As such, we don't offer a one-size-fits-all strategy but instead customize each portfolio to suit your individual needs and preferences. Our team is committed to working closely with you, providing the guidance and resources necessary to navigate the complex world of investing and to help your wealth grow and persevere over time.