To what extent do you view your
investing life as an extension of your personal life?By that I mean to what extent do the personal morals and ethical values of Tim the man govern the
investing decisions of Tim the
dividend growth investor?If you ask your typical
dividend growth investor if they would be willing to
invest in a lucrative but immoral venture, say selling child pornography or crack cocaine, the answer would probably be «absolutely not» regardless of the yield, valuation or
growth prospects of the underlying venture.And yet, ask that same investor what their
thoughts are
about Phillip Morris and they would probably describe what a wonderful investment it is and go on
about why you should own it.Do your personal morals ever come into play when buying companies, or do you compartmentalize your conscience, wall it off from the part of your brain that
thinks about investments, and make your
investing decisions based on the financial prospects of the company?The reason why I'm asking is that I keep identifying stocks of companies that I love from an
investing perspective but despise on a human level.I can not in good conscience own any piece of Phillip Morris knowing the impact that smoking related illness has on the families of smokers.You might say that the smoker made his choice to smoke so you don't mind taking his money, but his children never made that choice and they are the ones who will suffer when he dies 20 years too soon.
People always
think about getting nice current yields, but I believe that part of the deferred gratification of
dividend growth investing is also getting those low yield, high dividende
growth stocks.
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