Andrew Page |
Regular readers will know that my passion lies in building well balanced portfolios designed to produce an attractive and growing income stream and above average long term capital gains. This led to the development of the DividendKey program which we first launched back in November last year, and given the tumultuous market conditions that have prevailed since then, I felt it was worthwhile to examine the success, or otherwise, of the program and our students.
It is probably unfair to focus on the program since March; after all no matter what strategy you may have used since then, if you were long you would have achieved excellent results. The Australian market has rallied over 42% in about 23 weeks, which is something we haven’t seen in around 26 years! Then again, there are degrees of success, and anecdotally it seems as though DividendKey students have outperformed other styles that are considered higher risk (and hence expect greater reward).
The main reason for this is that while most people were debating whether the upturn in March was a sucker rally, dead cat bounce or even the pause for breath before the final plunge, students of the DividendKey were instead focused on identifying quality businesses and building a diversified portfolio with a longer term focus. The more the rally continued the more traders were convinced that a reversal was imminent, while DK students, who care little about day to day movements, were happy to be buying stocks at heavily discounted prices. As it turned out, the timing was amazingly serendipitous, and while the long term investment horizon means that these investors could well suffer from any reversal that may eventuate – the fact is that this will still not derail the strategy. Indeed a further leg down will be viewed as an additional opportunity to pick up some bargains.
What about those students who participated in the very first course back in November? At that stage the ASX200 was at 4221, and subsequently proceeded to drop more than 25% over the following four months. But the fact is that the very first students are also enjoying great returns, primarily because the DividendKey preaches regular and continuing investment. Yes, they missed the bottom, but they continued to purchase stocks over the following months, not for the sake of dollar cost averaging, but because regular contributions are the cornerstone of long term wealth creation. (The fact is that regular investments would have occurred regardless of which way the market was moving). They have also done well because they now understand how to select fundamentally sound businesses – and as it turns out, it has been these kind of stocks that have performed best recently, as nervous investors have largely shunned stocks still considered to be too risky.
The other thing to remember is that these students have also enjoyed a series of very attractive dividend payments (current yields are well above the long term average), and the associated franking credits have meant that the majority of this income was virtually tax free. For those focused on growth, this income has been reinvested, thus compounding returns. For others, such as retirees, this has provided a valuable source of income during a very uncertain period.
The thing to remember is that it’s never too late to get started on your long term wealth creation journey. Regardless of what happens over the next few months, in the year 2019 we will all look back on this period and recognise it for the once in a lifetime opportunity that it is. Most will regret not investing more during this period, but this is a concern unlikely to weigh on DividendKey students.
Best of all, the price of the course has been slashed to just $199. For a live and interactive course that runs over 4 lessons, that’s very hard to beat, and will be one of the most sensible and rewarding investments you will ever make. If you are interested in participating in the course, please visit the website (www.dividendkey.com) where you will find a wealth of information. We are so confident that you will find great value in this course that students are entitled to a full refund after attending the first lesson. So what are you waiting for? Go long, stay strong, and start building real wealth for you and your family today!
Make the markets work for you
Andrew Page
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