The dividend doctor gives his prescription for investing in 2023
Dividend-paying equities have long formed the backbone of retirees’ portfolios. And the historic stalwarts of these portfolios are well known. BHP, Telstra, and Commonwealth Bank, to name a few. You might be mistaken for thinking that equity income portfolios are therefore set and forget propositions, made up of a limited number of dividend darlings that will pay out into perpetuity. But you’d be wrong on both accounts, according to today’s guest. Dr Don Hamson is the founder and managing director of Plato Investment Management. Plato manages $11 billion in assets across three funds – an Aussie equities income fund, a global equities income fund, and a global alpha fund. Managing $11 billion in total. Before that, he was responsible for over $10B in active and enhanced equity investments at State Street Global Advisors. In today’s interview [in the upcoming interview], Don explains why dividend-paying equities are still the best place to generate income, what makes a dividend sustainable, how to identify dividend traps, and which sectors and stocks have the brightest dividend outlook. He also names the dividend darlings that no longer deserve the title! Timestamps 0:00 - START 1:45 - Dividends hold up amid inflation and rate hikes 4:15 - Dividends remain the income backbone 6:00 - The importance of franking credits 9:17 - Dividends vs the bond market 10:47 - Capital vs income 11:45 - Drawdown and sequencing risks 14:13 - Finding dividend growers 16:30 - Dividend traps 24:03 - Buying cheap stocks in hope of a dividend 26:00 - Red flags 31:40 - What makes a dividend "sustainable"? 38:00 - The best (and worst) looking sectors 41:23 - Invest with a short time horizon 43:00 - No free lunch for less than 20 stocks 50:30 - It's not all doom and gloom 58:00 - Don's bottom drawer investment