We Are Neither Market Timers Nor Price Forecasters

By Barry Schwartz December 31, 2015

We are neither market timers nor price forecasters. At Baskin Wealth Management we are investors, and therefore we are predominantly business analysts. We believe the path to successful investing requires us to understand what we buy for our clients at a fundamental level. As business analysts, we strive to find profitable companies, with plenty of reinvestment opportunities, trading at reasonable valuations. We don’t find these companies by looking at charts, or by seeing what other brokers recommend. We do it the old-fashioned way, by reading financial statements, working with the numbers, and figuring out what makes the good companies tick.
Although we have a long-term view, in a world based on the 24 hour news cycle, where fresh headlines are demanded hourly, we often find ourselves judged daily based upon the short-term price changes of our clients’ holdings. We much prefer that our clients and others base their judgements on the actual performance of the businesses in which we invest. One of the best indicators of performance, as we all know, is a dividend increase.
When a company raises its dividend, it signals to investors that it has confidence in its business and its ability to increase profits. Higher dividends signal higher profits to come, and this generally leads to higher stock prices. We firmly believe that buying and owning companies that raise dividends regularly is the best way to grow a portfolio over time.
Here are some examples of companies owned by our clients that raised their dividends in 2015. Not every company on this list had a positive stock price performance in 2015, but we are confident that most will raise their dividends again in 2016 and at some point, their stock prices will follow suit. Along with their other positive qualities, dividends are a good way of getting paid to wait until the market recognizes value.