Introduction from a dividend investor

Hello all,

I found this site after someone had posted a link to an interview we had done with Peter Thornhill on our site (you can find the interview here). I have made a few comments in the Peter Thornhill thread but thought I should properly introduce myself as I've enjoyed surfing around the site a bit and reading thoughts from other contributors on property, shares and other asset classes.

I've been obsessed by investing since I was a student and became financially independent in my early 30s despite no inheritance. This has been done by compulsive saving and investing. I feel there is so much to learn out there and I love the investing "game." In a similar way to Peter Thornhill, I have a huge focus on cashflow - I don't worry about market movements but I do think heavily about the underlying business' or securities I'm investing in. Whether the market is going up or down there are always opportunities if you look hard enough. The key to me is patience and temperament as well as some understanding of accounting.

My friend Will set up the website www.retireondividends.com and I contribute to that site where I put down some of my thoughts - mainly on dividend investing. I follow the Australian market very closely as my fiancee is Australian and we spend a good amount of time there. I also spend time in the USA and the UK. I look forward to following more threads on here and hopefully making the odd contribution.

Mike Roberts

 

Hello Mike

Welcome.

I am a boglehead but I do acknowledge Thornhill's position and I enjoyed his book.

My main concern is that dividends are increasingly attracting a higher premium. I do not know how that will play out or if future outperformance will reflect historical numbers.

Welcome.

 

Welcome Mike - looking forward to hearing more from you. There's definitely more interest in other forms of cash-flow now that APRA has put an end to many investors dreams of 25 properties within 3 years.

 

Hi Ross,

You are right. Most cash generating assets are not giving anywhere near the value they were 7-8 years ago and have been steadily climbing since then. Clearly the higher the valuation of an asset the worse your future return will be. My view is that this is being caused by such low interest rates. Interest rates act like gravity on valuations and if interest rates were to start rising then the value of all assets (stocks, bonds, property) will suffer with all else being equal. Given where rates currently are I think overall valuations are ok without being screamingly cheap. That said, building a portfolio of high quality companies should outperform cash over the long run.

 

Hi Jess, I think most people would do well to try to build a range of cash generating assets by assessing which ones give them the best risk adjusted returns. Different asset classes will go in and out of fashion at various times. Good cash generating assets could include property, shares, private businesses, royalties, trademarks, copyrights, etc. Property is normally easier to leverage but I'd always be quite wary of leverage as you never want to be in a position of becoming a forced seller as this can get very painful in a weak market.