Dividend Income Model

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Dividend Income Model

Many investors and retirees desire income. The goal of the Dividend Income Model (DIM) is to provide a high level of consistent income.

The DIM is designed to provide the subscriber with a portfolio of common stocks that pay high levels of consistent dividend income. The model will consist of approximately 12 to 15 stocks, all picked for their dividend payout level and consistency. Additionally, attention is paid to their history of increasing their dividends.

Before inclusion in the DIM, each stock must pass a rigorous list of financial hurdles, such as:

  • soundness of balance sheet
  • stability of earnings
  • dividend coverage ratio
  • level of dividend payout
  • consistency of dividend
  • history of increasing dividends

The DIM portfolio is designed to be a passive model. In other words, there will not be a large number of transactions occurring within the portfolio. This differs from the AIA model, which is designed to rotate amongst market sectors and asset classes monthly. DIM is designed to be a long-term hold portfolio, with its main priority focused on continuous and growing income streams provided by the stocks held within.

Occasionally, circumstances may dictate that one or more of the holdings within the DIM portfolio be replaced. This may be caused by one or more circumstances, such as:

  • potential dividend reduction
  • actual dividend reduction
  • an increasing stock price causing the dividend yield to fall to an unacceptable level

When a replacement or substitution occurs, subscribers will be notified by email of this change. Additionally, the current DIM portfolio will be updated on the Think 2 Retire newsletter website, reflecting the change.

The current DIM portfolio selections will always be available on the Think 2 Retire Newsletter website.

More about DIvidend Income Model

DIM is less concerned about the price movements of its member stocks and much more concerned with the level and consistency of the dividends they provide. Therefore, price fluctuations will generally be tolerated in order to receive dividend payments. A replacement may be suggested if a stock’s price decline becomes too severe.

We at Think 2 Retire suggest that subscribers not attempt to cherry-pick certain stocks within the DIM portfolio. As mentioned above, the stock selections are primarily based upon their dividend-paying ability. Additionally, attention is paid to providing a diversified portfolio of stocks from a variety of industries. Therefore, as a subscriber, you should attempt to hold all the suggested stocks within the DIM portfolio to maintain a diversified approach and fight the urge to concentrate your investment capital in a select few holdings.

The initial investments in each of the holdings listed in the table above are approximately $10,000.

However, the initial investment may vary depending on the available capital. The model aims to distribute approximately equal amounts among all the holdings.

Please note that maintaining equal investment amounts may be challenging due to price fluctuations of individual holdings.

If you choose to invest more in certain holdings based on their dividend payout or potential for price appreciation, we suggest you strive to maintain a diversified approach within the DIM portfolio.

You can watch the DIM videos available in our Video Library for more information.

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