Ever wondered if a dividend investment strategy is worth it, what is the difference between investing and trading and how to pick your dividend investments better? I came across this book by a recommendation from the Instagram #financialindepence community.
“The Strategic Dividend Investor” outlines some of the key metrics you would need to take into account when thinking about building your investment portfolio.
Examples and advice included are on-point: the author doesn’t aim to make you a stock market guru, but to give you food for thought. This book will give you the basics of trading and investing and will educate you on the difference between the two. Daniel Peris poured lots of historical facts and data, that aim to solidify your understanding of how dividends are doing their magic. The book is suitable for beginners, as well as for investors with some experience in the field. It wouldn’t make a Warren Buffet out of you, but it will definitely spark enough curiosity to make you read one more book on the topic or to do your first investment.
In this book you will get to know dividends better and why they are important. It was published in 2011 but it’s still irrelevant nowadays, as it contains the essentials of how dividends work. There’s a lot of analysis, examples, and details which were easy to read and understand even for a beginner. You will see why investing in dividend-paying companies can give you better results over time, than trying to beat the market.
The book starts with the bare bones of the dividend.
There’s a very detailed explanation of how dividends work and how that ties up with the company performance. Companies paying dividends are mastering the growth in the long run. Others hoard cash. There are some interesting real-world examples of the performance of companies paying dividends compared to others which are reinvesting cash. Not that reinvesting is bad, but at a certain point it wouldn’t drive the expected growth and there is a very reasonable explanation why. The significance of this makes all the difference between the IT giants we see now and consumer-focused companies that have been paying dividends for decades.
I didn’t like how charts and data are presented in “The Strategic Dividend Investor”. Not that they were incorrect or misleading. Not at all, they were all on point. Their Kindle formatting is problematic as they are too small to see clearly. I tried to zoom in, but without any success. I’d assume that if I increased the font size, it would probably be better. Still, if I had to do this on every graphic or table, it would definitely make the whole experience worse.
The book was very easy to read and understand even for a non-native English speaker. But some portion of it felt like taken directly from a school textbook.
I found a number of examples hard to follow, but I would attribute it to my language comprehension skills. Leaving this aside, the book gave me good guidance on how to research and build my own investment portfolio. It confirmed that my strategy of choice was in alignment with my goals. My focus is long term investments and a focus on dividend payouts is the way to go for me.
In conclusion, I definitely like the book. I recommend it to everyone interested in how dividends work and why they should be part of your investment strategy.
A well-written book, I never found it boring or misleading. The analysis delivered was unbiased and well explained. The book focuses on dividends, not the basics of trading. Don’t expect it to go into detail about other financial instruments. On the upside, this book might change the distribution of your portfolio. If you are a beginner and you want to research if investing in dividends is a good strategy for you, read this book. If you are the type of investor who is patient, does thorough research and invests for the decades ahead, I urge you to read it. Before reading it I had very limited experience and barely scratched the surface of the importance of dividends. Now I feel confident and more aware of what to look for when standing in front of a balance sheet.
My personal rating for The Strategic Dividend Investor is 4.5 out of 5.
The Strategic Dividend Investor by Daniel Peris (New York: McGraw-Hill, 2011) is available on Amazon.