Welcome to the Investing for Beginners podcast. In today’s session we talk to Steve from England! Our little podcast is international, and we discuss some great topics. Our main focus is on investing metrics and how they are a guideline and not a blueprint for your investing success.
- How much to allocate to different investments and what size investments to make
- Setting up watchlists for different types of investments
- The best metrics to use to find the best stock ideas
- How to balance dollar cost averaging and trading fees
- What are the best stock screeners out there and should you invest in those services
- Are small caps a good investment or are they too risky
Andrew, was wondering when you split from your regular investing to adding the Dividend Aristocrats? Also how much do you invest in them, and when do you do it, and what size decisions do you make?
Andrew: I love that question, the basis of my approach is trying to let’s take somebody the average basically, a hard working citizen in any country. This show is now a global thing and let’s not exclude lower income, people who aren’t making seven figures and have umbrellas of wealth, these parachutes they can fly off if they make a mistake as a CEO. Let’s look at the average person, people who don’t have much but can scrimp and save a little bit, do that each month. And let’s see if those people can make a fortune, the working class of the world. Obviously, I am talking about more developed countries, aside from that, how that relates to my whole investing approach is the ultimate goal is for the investments to have compounding interest in the most efficient compounding machine we can get.
So we’ve talked about in previous episodes about dividend reinvestment, the drip and how that can roll down this hill of compounding and multiply the type of returns that we can see. The problem is when you’re investing smaller amounts of capital, you can’t always assume that you’re going to find a dividend aristocrat every single pick. If you have a portfolio that’s twenty positions, I like to keep it around 15 to 20. To think that I can pick a stock every single month and expect it to raise it’s dividend every year.