This is the first of a three part write up where I look at the background to my investment approach. This part is about why I focus on yield when buying shares and why compounding the income from them is a good idea. Part two will explore what other factors I take into account when selecting income stocks. Part three will look at how I go about constructing an income portfolio and achieving diversification.
So Why Compound Income?
Some investors chase story stocks and growth stocks which they hope will show them either a big and or quick profit. However, they often end up over paying as a result and getting disappointing returns when things don’t turn out as they hoped. Though I’m sure many will be able to point to individual growth stocks or speculative E amp; P stocks they have made a fortune on in a short space of time, I prefer to take a more tried and tested value approach to get rich slowly. Now I know many a reader, if they haven’t clciked away already will be thinking boring. But as James Montier pointed out in his book on Value investing:
As Paul Samuelson said, ‘Investing should be dull….
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
