All Aboard The Dividend Train

It seems like a lot of smart people are telling us we should own dividend paying stocks. Too many strategists on one side of the teeter totter is never good.

I too believe in the dividend paying theme. That does not mean I will be right. Part of trying to do a good job is to realize I could be wrong, know what the consequence of being wrong might be and have something in place to mitigate that consequence.

I am overweight low beta dividend payers compared to high beta growth names. The dividend payers, as a group are working much better than high beta growth names right now. I think if that changes around I won't be left too far behind with the growth names I have, but we'll see.

I do not think that dividend payers, as a group, are going to implode or do something horrible. Clearly I think they will do quite what well. If I am wrong I think it will be because high beta takes over leadership of the market and, as a group, has an up a lot type of year versus and up a little type of year for dividend payers.

As I have written before a properly diversified portfolio is unlikely to lag by a wide margin but I think the potential for a lagging year, and all managers have years where they lag, can be managed effectively by keeping a balance.