This morning I sold some OTM puts on SLV. Silver has fallen below it's Bollinger bands and precious metals are oversold and out of favor. Meanwhile this bull market is getting a bit long in the tooth, printing presses are cranked and the war drum is beating. Precious metals have been moving inversely to the S&P as such this is also a small hedge against market decline.
In reviewing my retirement portfolio I notice a couple of things. My greatest total return gainers are those dividend growth stocks that started with the lowest yield but had the highest dividend growth rates. These type of stocks will definitely be in the mix for future purchases. I am also looking closely not just for low payout ratios but also low free cash payout ratios. This combined with a high dividend growth rate seem to be great candidates for strong total return now while still providing great yield on cost and income in later years.
I love dividend growth investing. Every time I reinvest the dividends my monthly income rises. It is my own Social Security fund. When I contribute more funds it's even better. The combination of reinvesting dividends in companies that grow their dividends along with putting new capital to work really sets in motion the power of compounding. Compounding one's savings is the key to financial security and wealth.
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