We’ve all heard the brokerage/financial advisor CYA disclaimer: “past performance is no guarantee of future results”.
I sort of prefer this quote, which I recently saw at 37 Signals:
In theory there is no difference between theory and practice. But, in practice, there is.
An investing theory truism is that you can’t get reward without risk. In practice this isn’t quite true. There’s an opportunity with respect to dividends, dividend continuity, and dividend raises that we can use to reduce the risk to our Elephant’s Paycheck Blueprint objectives.
When a company has raised their dividend consistently for 25, 30, even 50 years every single year in a row they are very likely to continue with those increases. More likely than a company without such a track record.
In fact, large companies who have raised their dividends for 25 years or more are in a pretty exclusive club. There are just about 50 of them.
They’re called dividend aristocrats, and they make great investments for your Elephant’s Paycheck Blueprint because of our focus on maximizing your Elephant’s Paycheck by compounding dividend reinvestments and dividend raises over relatively long periods of time.