How a Value Investor Does Dividend Growth
Durable Dividends. Steady Growth. No Guesswork.
Welcome to the Dividend Fortress
I have shared my small cap value investing journey on Substack for almost a year at Astute Investor’s Calculus. If you are a reader there, you know that in addition to my flagship small cap value portfolio, I also run a few other portfolios. Dividend Fortress portfolio is one of these other portfolios.
Dividend Fortress will follow my dividend growth investing journey. I do dividend growth investing a little differently than other dividend growth investors. As a lifelong value investor, I continue to pay attention to the valuations during my investment and reinvestment decisions. As a result, I am able to take advantage of the various business cycles to get long term shares at average costs below what a typical dollar cost averaging investor gets. This allows my portfolio to add extra performance every year.
Dividend Fortress Investment Strategy
Dividend Fortress portfolio is a long term dividend growth portfolio. The key principles behind this portfolio are as follows:
Invest in 15-20 stocks that exhibit strong financials, growing business, and growing dividend payments to the shareholders.
Invest in quality companies that will keep or grow their market position. Businesses that have built competitive advantages.
Construct the portfolio so that there are dividend payments being collected every month.
Equal weight the portfolio and maintain this allocation with new investments and dividend reinvestments. This means any dividend reinvestments go to the under-allocated positions first. We do not do automatic DRIP. This helps us capture the rebalancing bonus as well as actively seeks to reduce our cost basis and capital growth potential.
Avoid selling unless absolutely necessary (for example, if a company cuts dividend)
This portfolio invests for the long term with a horizon of 20+ years.
This Strategy is Right for You IF
You want to build a portfolio of quality companies that will generate income for you in your retirement
You look forward to a growing stream of passive dividend income hitting your account every month, month after month, without interruption
You want to select for only the highest quality companies that will not disappear tomorrow without warning
You want a professional to shift through 1000s of stocks to find you these gems (so you can focus on what you do best - your work, your life and your family).
You have other highly concentrated portfolio(s), like I do with my small cap value portfolio, and you want to build a solid base of quality and income producing stocks that will support you as you execute your other strategies with discipline.
Who am I?
My name is Shailesh Kumar and I have been investing for more than 25 years. I have an MBA from University of Michigan. I am a value investor. Value investing requires patience and time and the value portfolios can become very concentrated in a few high conviction stocks. The Dividend Fortress portfolios gives me the diversification and stability that I need so I can faithfully execute my value investing process.