I am working on questions of portfolio construction in light of what I have come to accept as the attributes of dividend-growth stocks. The basic issue becomes, how does one meld dividend-growth stocks with the asset allocation principles that have been derived from the teachings of Modern Portfolio Theory? That leads to questions like these:
- Should one's entire investable retirement assets be placed into a dividend-growth portfolio? (Probably not.)
- If not, what percentage of retirement assets "should" be devoted to dividend-growth stocks? Does that differ by age, and if so, how?
- What does “diversification” mean when you are talking about dividend-growth stocks?
- Do the risk-reducing characteristics of dividend-growth stocks allow you to have a higher allocation to "stocks" than is commonly prescribed?
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