I have regularly touted that income in the form of increasing stock dividends, from companies with a track record of increasing their dividends, is a great way to build inflation protected passive income.
Investing For Yourself
A new article from Morningstar Columnist, Josh Peters CFA, indicates the same sentiment. In the article he makes a strong case for those of us who are engaged in the Dividend Investing strategy to invest ourselves and cut out the middleman (Broker, Advisor, or Fund Manager). If we develop a clear and focused strategy to invest in dividend paying common stocks that we are committed to understand, then the choice is clear.
Cut out the middleman!
Are Fund Fees Worth The Cost?
He suggests, as I do, that the role of the mutual fund is to prevent the amateur investor from making large mistakes. However, in return, the manager is compensated through fees and fund expenses that diminish the returns of the retail investor…you and me.
I do advocate professional management for sectors that I do not understand such as certain small caps and international offerings that I either can’t cover due to lack of time or because there is a lack of information available to me.
Diversify What You Don’t Understand
You might want to consider, as I have, the inclusion of an International Dividend ETF in order to add some global allocation to your asset mix.
There is no shame in admitting when you don’t have the expertise, information, or smarts to understand a stock or a market. Heck, people who invest professionally (as in for a living) can’t absorb enough information to master every market, so how can we amateur investors be expected to do so? The answer is…we can’t!
You should check out the remainder of the morningstar article, it does present some great points.
Here’s to money!