The Case for Dividend Growth: Investing in a Post-Crisis World

by David L. Bahnsen

Overview

Are you looking for an investment strategy that offers growth, income, and best of all, growth-of-income? The Case for Dividend Growth proposes the most effective method for exploring, realizing, and reaching your financial goals.

Both the tech bubble burst of 2000, and the financial crisis of 2008, poked significant holes in the primary investment belief of too many investors today—that one can just blindly withdraw from principal, and that equity returns will keep up. Too many investment advisors have taken the path of least resistance, not aware of the risk in systematically withdrawing from what, at times, will be a declining portfolio.

Investors seeking to accumulate money for their future needs, and investors needing to withdraw money now for a present need, both have one thing in common: Dividend Growth investing represents a powerful weapon in the achievement of their objectives.

Market volatility is not something any investor can escape, but benefitting from it (for accumulators reinvesting dividends), and being insulated from it (for withdrawers taking only from a growing flow of dividend income), are achievable results for those who understand the time-tested, sustainable, intelligent strategy of investing that is Dividend Growth.

Product Details

ISBN-13:	9781642930450
Publisher:	Post Hill Press
Publication date:	04/09/2019
Pages:	192
Product dimensions:	5.30(w) x 8.30(h) x 0.90(d)

About the Author

David L. Bahnsen is the founder, Managing Partner, and Chief Investment Officer of The Bahnsen Group, a national private wealth management firm with offices in Newport Beach, New York City, Minneapolis, Oregon, Austin, and Nashville managing over $4.25 billion in client assets.

Prior to launching The Bahnsen Group, he spent eight years as a Managing Director at Morgan Stanley and six years as a Vice President at UBS. He is consistently named as one of the top financial advisors in America by Barron’s, Forbes, and the Financial Times.

He is a frequent guest on CNBC, Bloomberg, Fox News, and Fox Business, and is a regular contributor to National Review. He hosts the popular weekly podcast, Capital Record, dedicated to a defense of free enterprise and capital markets.

David is a founding trustee for Pacifica Christian High School of Orange County and serves on the Board of Directors for National Review in New York City.

He is the author of several bestselling books including Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (2018), The Case for Dividend Growth: Investing in a Post-Crisis World (2019), and There’s No Free Lunch: 250 Economic Truths (2021).

David’s true passions include anything related to USC football, the financial markets, politics, and Chinese food. His ultimate passions are his wife of twenty-two-plus years, Joleen; their children, Mitchell, Sadie, and Graham; and the life they’ve created together on both coasts.

Table of Contents

Introduction xi

1 Why People Invest: Cash Flow is King 1

2 What's Old is New Again: Historical Context and Realities in Dividend Growth 14

3 Not Buying the Stock to Get the Dividend: Buying the Dividend to Get the Stock 24

4 Accumulation of Wealth: The Eighth Wonder of the World, on Steroids 37

5 Withdrawal Mechanics Matter: Avoiding the Poison of Negative Compounding as You Tap Your Nest Egg to Live Happily Ever After 51

6 Opportunity Cost Myth: Why Dividend Growth Investing Is Not a Return Consolation Prize 66

7 The Threat of Inflation: The Self-Contained Offense and Defense in Dividend Growth Stocks 79

8 But What About Stock Buybacks? 92

9 To This End We Work: Avoiding Dividend Cuts 108

10 Clearing up the Confusions: High Yield vs. Growing Dividends 122

Conclusion: Summarizing the Case for Dividend Growth Investing in a Post-Crisis World 132

Appendix I Dividend Growth in International Markets 140

Appendix II Dividend Growth in the Context of a Fiduciary Standard 151

Acknowledgments 157

Endnotes 161

About the Author 165

Editorial Reviews

Throughout his successful career, David has implemented a consistent dividend growth equity investment philosophy. In this book, David provides the reader valuable new insight toward that process in a coherent, unique, and thoughtful manner. Readers will become more complete investors after understanding David’s dividend growth philosophy.

Joseph M. Terranova

David’s understanding of capital markets comes through in this book loud and clear. From alternatives to fixed income, to the asset class that is the subject of this book, dividend stocks, he writes in a way that allows investors of all shapes and sizes to understand. You’ll be a better investor for reading.

Anthony Scaramucci

In a financial world of pundits and experts energized by prediction compulsion, David Bahnsen stands out as an advisor who understands and embraces the eternal truth that long term accumulation and reinvestment of dividend income is the major key to sustainable investment success.

Lowell Miller

In three-decade baby boom retirements, the only rational investment objective isn’t income; it’s growth of income. Your income has to keep rising on at least the same trajectory as your living costs, or you’ll run out of money. No problem: the dividends of mainstream equities have, in the aggregate, been increasing at almost twice CPI inflation for as long as any of us have been alive. And wait, there’s more: to the extent you can live on those rising dividends, your patrimony can continue to grow for your heirs. Yet it isn’t too much to say that the immense power of dividend growth has always been the least understood, most underappreciated phenomenon in investing. Well, not anymore: investors of all ages will find David Bahnsen’s pellucid and highly readable tutorial a life-forwarding experience.

Nick Murray