2012 – high quality dividend paying shares remain key

January 3, 2012

I hope that you had a great break, the last few days. I also very much hope that you have benefited from what I’ve had to say during 2011 and that you have enjoyed my writing style – I am sure you can forgive the occasional idiosyncrasies being Dutch.

Having said that, Dividend Income Investor.com premium subscribers are subscribing for content, not style or prose.

In content terms, from launch in February 2011, Dividend Income Investor.com remains the only UK publisher to inform subscribers about a structured approach to buying high quality dividend paying shares when they are historically undervalued, holding them for their income and ignore trading them for a quick profit, unless they have become historically overvalued.

Our investment strategy is not about getting rich ‘soon’ or anything other than a decent and increasing income from your shares as one alternative to the many other income sources out there – living on it if necessary or reinvesting it for a larger income in future if you don’t have immediate requirements.

In 2012, we will be exploring ways to enhance the yield on our shareholdings. In particular, we will be looking at the possibilities of ‘selling call options’ in order to secure premiums without the need to sell the underlining investment, generating substantial income above and beyond dividends.

2011 – 2012 musings

At this time of the year I urge you to ignore the huge amount of comment that is being/will be published in the financial media predicting what the economy, the market, various sectors, funds or individual shares will do in 2012.

Today is ‘just’ the first trading day of 2012 . . . In fact, for a long term investor January 3rd, 2012, is irrelevant. Remember, your shares don’t care what date it is or that it marks the start of a new year.

What I can say though is to expect increased volatility

With the managers of large hedge funds, mutual funds, and pensions having collected their bonus checks for 2011 – remember, they’re paid based on calendar year performance – once trading has started they will act on all the investments they’ve been dying to make.

Plus the ones they’ve been anxious to dump. As a result, we may well see huge massive moves in share prices, the next few days.

Therefore, expect to see some ‘unusual’ share price movements and possibly opportunities to pick up some more historically undervalued shares due to fund managers selling out. As a result, we will be re-issuing our earlier limit orders later today, exclusively available for premium subscribers.

Later, in February, I will be publishing our first annual performance review of the Dividend Income Portfolio – it will be its first full year of existence, having started in February 2011.

To a successful 2012

Steven Dotsch
Managing editor
Dividend Income Investor.com
Follow me at Twitter.com – @Investoretire

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