The S&P Dividend Aristocrats is a list of companies in the S&P500 that have increased their dividends each year for at least 25 consecutive years. It’s a starting point for a lot of dividend investors because 25 years is a long time and seen as a sign of reliability. Any one on the list has weathered not only the most recent recession but also the one in the late 1980′s as well as the dot com bust. It’s been a turbulent time but one thing must be clear – past performance is not indicative of future results. The list is a start but should not be the end of your research.

The list is updated annually to add and remove companies. There were several additions and several removals this year.

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When I was in elementary school, we played a stock market game in which each team was given $10,000 to invest over the course of a month. It was about the time of the first Gulf War, when Iraq invaded Kuwait, and someone on our team suggested we purchase shares of Caterpillar. Then, as the days would pass, we’d review our copies of the New York Times business pages for the closing price of the stock the previous day.

That’s right… we checked the newspaper and saw only the closing price from the night before. No after market trading, no level 2 market data – none of that stuff. We were only eleven and it would be many years before you could even get real time data (everything was 20 minutes delayed, unless you paid).

The deluge of stock information only serves one purpose – increased activity. That’s why I thought it was funny that this story about a Google glitch on Apple’s ticker was even a story. The sad part is that as you watch it tick down, you don’t know if it’s a glitch or a flash crash.

If it’s a glitch, you won’t freak out when you see it. If it’s a flash crash, you won’t freak out when you see it. If it’s a real crash, chances are you wouldn’t have beaten the computer traders, institutional experts, and all the other folks who are in line ahead of you… and you won’t freak out about it either.

The lesson? Don’t check stock prices every minute.

(Photo: bransorem)

As a personal finance aficionado for many years, I was surprised to know little about reverse convertibles, an investment vehicle that sounds too good to be true. After reading this warning in Smart Money (and this one from FINRA) about reverse convertibles, and how they did very poorly these last few years because of the economic downturn, I thought I should know more about them, despite having no desire to ever invest in one.

I think it’s always good to be educated, even on things you probably will never use because it helps you understand the environment as a whole.

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I saw this post by Joshua Brown on CSMonitor last week about his favorite chart. It’s a chart that shows how there’s generally a period of inflation after periods of war and the inflation, if held in check, helps boost the stock market. This is in stark contrast to the idea of the peace dividend, which says we tend to go into recession after wars, but I think the chart is irrefutable.

The part of his brief post that resonated with me was this quote – “As someone who began his career at the tail end of an 18 year bull cycle it keeps me hanging on.”

I was born in 1980 and I was finishing up my last semester of my undergraduate career when 9/11 happened. I was asleep in a class (sorry Mom!) when it happened and I wandered into the university center to watch the news on a tiny TV in the main atrium. The previous year, the dot com bubble had burst, which pretty much assured me that by job prospects would be slim come graduation (despite attending a great computer science university, I wasn’t near the top of the class… the market was that bad). I would go to graduate school for a year and start working in 2003, which meant by the time I scrounged up enough for a down payment, the housing boom would pretty much be near its end.

I missed the dot com boom, I missed the housing boom, I missed the financial crisis, and I missed that 18 year bull cycle that Brown wrote about. I missed the gains but I also missed the pains, so I can’t complain that much (except my Roth IRA is still in the tank). And while historical returns are not good indicators of the future, this chart does make me happy that I might be able to take advantage of this next one. Hopefully.

What do you think?

Welcome to Spring Cleaning Week! This is the first post of the week and something I think too many people overlook – rebalancing your investment portfolio.

Rebalancing your portfolio is important because the key to investing is establishing a plan and following it. You can’t predict the bubbles before they happen in the hopes you can buy on the upswing. You can’t predict the sharp drops in the hopes you can sell before they hit. What you can do is establish a reasonable plan, adjust it as needed, and follow it to prosperity. With that in mind, the goal of rebalancing is to get your investment reality back in line with your plan.

Be a Dividend Millionaire by Paul Rubillo is not just a book about dividend investing – there are a million of those. Be a Dividend Millionaire is a personal finance book that shows you how to integrate dividend investing as a way of building wealth on top of a solid foundation that everyone needs to have.

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Every year Kiplinger’s magazine puts out a survey of the best online brokers. Every year, I take a look at the list because I’m curious how the different brokers stack up. I’d like to know if anyone has made any big changes or improvements to their service, it might change my mind about who I do business with.

Usually the lists don’t change all that much. As you scan this year’s list, you’ll see the same ones near the top, the same ones near the middle, and the same ones near the end. The meat is in the article detailing the different categories (like commissions and fees, investment choices, etc.) because it adds a little color to an otherwise robotic list.

One important thing to remember as you peruse this list: the best online broker is the broker that satisfies all of your requirements. All the bells and whistles in the world don’t matter if they don’t offer exactly what you need. With so many brokers, many of which are inexpensive, you should be able to find your best broker, online or offline, if you’re diligent.

Let’s get to the list…

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I was reading CNN Money over the weekend when I saw one of E*Trade’s latest banner advertisements, which I’ve included below. I want to salute them for using advertising that is actually useful.

It’s pretty obvious, with interest rates so low, that dividend stocks have become more and more enticing. Part of me wonders if we’re having the Time magazine effect, which is my leading indicator that something has jumped the shark, but I still think that buying a bunch of dividend yielding stocks is probably your best bet if you’re able to hold them for a while (and cash the dividend checks).
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