The Strategic Dividend Investor: Why Slow and Steady Wins the Race

by Daniel Peris

Get off the Wall Street roller coaster with strategic dividend investing! There's a big difference between investing in the stock market and investing in companies through the stock market. The Strategic Dividend Investor shows you why, over the long run, investing in companies with high and rising distributions is far superior to "playing the market." Responsible for $4.5 billion in dividend-anchored portfolios, Daniel Peris demonstrates that, for most investors, buying a stock in the hope of making a quick buck by selling it in a few weeks or months is far from the best way to create wealth. Instead, you should use the stock market as a means of receiving a share of excess profits―dividends―from corporations in which you own stock. Over time, those payments―and the growth of those payments―represent the vast majority of stock market returns. The Strategic Dividend Investor outlines the key issues you need to address in order to create a solid dividend portfolio, including how

Genres: Finance, Business, Economics, Nonfiction

192 pages, Hardcover

First published January 1, 2011

Reviews

[John · Rating 4 out of 5]

Although this is the author’s first book, I read it AFTER his later two - see reviews. In this book, he builds the case for two things: dividend investing, and an assault on the prevailing theory of “buy low, sell high, repeat.”

It is a very light read that does not get too analytical, and he lays out his case as to why dividend investing, in the long-term, is superior to the trading mentality, that he refers to as ‘Trader Nation’. As a financial professional who is face-to-client, I agree with many of his assertions. The difficulty is getting the public to agree this theory when they are continually bombarded with the buy/sell financial media. I have been using his mutual fund (that he does not mention directly, to display a nice mark of objectivity and integrity) for some time with clients as a portion of the equity side of the allocation.

I highly recommend this book to people who are used to the “hot stock” systems, as it will provide a fresh perspective. Investing should be just that: investing; not speculating. What makes clients successful is not trading successfully, but three things:

#1 - Being content with yourselves and not spending money you don’t have, to buy things you don’t need, to impress people you don’t really know or like.
#2 - Having a long-term focus (and long-term is NOT two or three years). Wealth and security is built over decades, not months.
#3 - Very simply, Save, Invest, Evaluate, Rebalance, Repeat.

[Dominik · Rating 3 out of 5]

I liked the book and mostly agree with the message. I give the book 5 stars for clarity, 4 stars for the story, but can't give anything above 1 for the research.
The book's thesis is founded on outdated research. If it would be the early 80's, that book would be on spot. But in 2010 it is way off the recent market developments.
The book builds on the investment theories developed before the 1940's, just look at the bibliography for chapter 1. Then, it develops the thesis on research done during the 60's, 70's and dividend investment idea propagators like Fisher. Shiller with his research is mentioned loosely only to give credibility to the thesis when in fact none of his research proves dividend stock outperformance. Mr. Peris only used Shiller valuation metrics to prove his point. All modern research, post-1980, mentioned in the book is not research on how dividend stocks outperform the market but rather on how the valuation has deteriorated and how much would reader earn if only the P/E would decline to "normal" and dividend yield increased to "normal". By "normal" the author means the pre-1980's levels.
Do your own work and look at the Ned Davis Research or the Bernstein Research, quoted in the book. What you will find is a very complicated picture of reality that seems to be breaking P/E, div. yield, earnings and similar market indicators norms established in 1960's. It certainly is not supportive of dividend investing outperformance post-1990. Maybe the economy has changed. Maybe the post-war era of abundance, technology inventions and constant productivity growth was a multi-decade anomaly and now we are trending towards the multi-century normal.
So do I think the book is worth reading; yes. But the reader should keep an open mind and do not take all author's views for granted. Despite all the recent history the dividend investing is not dead yet.

[RJ Martino · Rating 4 out of 5]

Good book and highly recommended for other value investors. It was short and easy to read. He made his point in the first chapter and then continued to pile on the argument. I think it may be a good introductory book to the DDM investment strategy but he could have used half of the book to be a little more application based. I wish he would have shown a little more detail into the math - maybe explaining how to value a stock yielding 4% at $64 versus a stock yielding %6 at $42. Yields are like driving a car using the rear view mirror. I think he could have used more of his chapters to talk about how he dives into 10Ks to validate the companies ability to continue to pay the dividends.

All in all, it was a good book but there is so much more to this topic and he didn't go a mile deep into much of it.

[Olli Selamaa · Rating 5 out of 5]

I read this book before reading "Getting Back to Business" from the same author, which is a little bit more advanced than this book. This book gives a great introduction to dividend-focused investing and a reason to read his other books.
Going through the book was very enjoyable - he presents his opinions in an easy-to-understand way with little math or formulas. The arguments he makes are a breath of fresh air in today's highly "technical" investment world. For anyone investing in the stock market and who is not interested in a casino-like trading mentality, this book is a highly recommendable read.

[Michael Herlache MBA · Rating 5 out of 5]

Top book on real return investing!

[lyle · Rating 5 out of 5]

Daniel Peris makes an impressive case for investing in companies that share their profits with stockholders in the form of dividends. He supports his arguments with facts, yet does not go into so much technical detail that the average investor will be alienated. (Readers are called upon to understand the discount rate method of valuing stocks, but Peris explains the mathematics of this clearly, likening it to income from a rental property.) The most compelling point is that historically dividends have dominated shareholder returns, yet the investing media machines ignore this fact and push people to be stock traders, in part because this maximizes corporate profits at the expense of investors. If there were one book I would give to my children about investing this would be it because it is well documented with data, well written, succinct, and does not require a degree in finance to understand and enjoy.

[Petesea · Rating 4 out of 5]

With the roiling of the markets over the past few years, this is perhaps a good time to review the strategy of dividend investing. In fact today's issue of USA Today (March 19, 2012), states that "Companies are on pace to pay a record $263 billion in dividends to shareholders over the next year, topping the $253 billion they were paying as of June 2008." I have always loved dividend stocks since my grandfather bought me a share of Texaco back in the early 70s - too bad I did not reinvest dividends for many years. That is one of the lessons of this book - although, I am not exactly sure how to reinvest dividends of stocks that I hold in my IRAs. I am not sure about Mr. Peris ignoring a few industries in looking for dividend stocks - not sure if you real can be diversified if you do this.

[Sara · Rating 1 out of 5]

Read most, skimmed some. Just wasn't the right time for me to be reading this book. Maybe I'll again later.