The Dividend Investor. Rodney Hobson
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Publishing details
HARRIMAN HOUSE LTD
3A Penns Road
Petersfield
Hampshire
GU32 2EW
GREAT BRITAIN
Tel: +44 (0)1730 233870
Fax: +44 (0)1730 233880
Email: [email protected]
Website: www.harriman-house.com
First published in Great Britain in 2012
Copyright © Harriman House Ltd
The right of Rodney Hobson to be identified as Author has been asserted in accordance with the Copyright, Designs and Patents Act 1988.
ISBN: 978-0-85719-234-9
British Library Cataloguing in Publication Data
A CIP catalogue record for this book can be obtained from the British Library.
All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher.
No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher or by the Author.
Disclaimer
All the many case studies included in this book refer to genuine announcements and events on the London Stock Exchange. However, they represent the situation in each case at a given moment in time. Circumstances change and issues raised at one juncture may be resolved or superseded. Similarly, new challenges arise over time.
Therefore nothing in this book constitutes a recommendation to buy or sell shares in a specific company or sector. Investors must exercise their own judgement.
Readers interested in finding out more about a particular company should read the latest stock market announcements.
At the time of writing the author held shares in the following companies mentioned in this book: Royal Dutch Shell, Imperial Tobacco, Balfour Beatty, National Grid and Barratt Developments. These investments were made before this book was ever mooted and were being held for the long term. He holds a portfolio of shares in an ISA, built up over several years, which is designed to produce dividends.
About the Author
Rodney Hobson is an experienced financial journalist who has held senior editorial positions with publications in the UK and Asia. Among posts he has held are news editor for the business section of The Times, editor of Shares magazine, business editor of the Singapore Monitor and deputy business editor of the Far Eastern Economic Review.
He has also contributed to the City pages of the Daily Mail, The Independent and The Independent on Sunday.
Rodney was at the forefront in the setting up of financial websites, first as head of news for the launch of Citywire and more recently as Editor of Hemscott, now part of Morningstar for whom he continues to write a weekly investment email. He has featured on BBC TV and radio and on CNBC, as well as having appeared as a guest speaker at conferences such as the World Money Show and the London Investor Show.
He is the author of Shares Made Simple , the authoritative beginner’s guide to the stock market; Small Companies, Big Profits, a guide to investing in smaller quoted companies; Understanding Company News , the guide to interpreting stock market announcements; and How to Build a Share Portfolio, a practical guide to selecting and monitoring a portfolio of shares. All are published by Harriman House.
Rodney is registered as a Representative with the Financial Services Authority (FSA). He is married with one daughter.
Other books by the same author:
www.harriman-house.com/sharesmadesimple
www.harriman-house.com/smallcompaniesbigprofits
www.harriman-house.com/understandingcompanynews
www.harriman-house.com/howtobuildashareportfolio
Rodney Hobson’s personal website is: www.rodneyhobson.co.uk
Preface
Who this book is for
This book has been written for those who have grasped the basics of investing but are unsure as to how to build a portfolio of shares that will produce a steady and rising income.
However, investors of any experience should benefit from reading this book, irrespective of their investment criteria. Even those who have already built an investment portfolio and those who subsequently decide that they want to be active traders rather than stick to solid long-term investments will learn more about making the most of their capital.
Many investors plunge into shares with a vague notion of making money but without properly assessing what it is that they want from their investments. This book argues that regular income is a key part of any investment strategy, whatever the age or aspirations of the investor, and that shares are the best way of securing this income at relatively low risk and with the bonus of providing a hedge against inflation.
What this book covers
As the title implies, The Dividend Investor is all about buying shares for the income they generate through the dividends they pay their shareholders, as opposed to investing simply in the hope of returns from rises in share prices. The accent is on buying shares for the longer term rather than looking for quick fixes.
The focus is the UK stock market, although the arguments and guidance provided are relevant to all major stock exchanges around the world. The text refers mainly to larger and medium-sized companies because they are more likely to pay dividends than smaller ones. The concentration is on companies with a full listing rather than those quoted on AIM for the same reason.
The approach is practical rather than academic.
How this book is structured
The book is divided into four main sections: (Parts A-D) basic information on how dividends are set and by whom; how to analyse companies to maximise the yield on your investments; how to find companies that fit your investment criteria; and how to build your own portfolio using the knowledge that you have gleaned from the first three sections.
Chapters are arranged to lead investors step-by-step through the whole topic of investing for dividends. New and less sophisticated investors will particularly benefit from reading from start to finish. Even those with little knowledge of how the stock market works will feel competent to begin investing by the time they are half way through the book.
You can also use The Dividend Investor as a reference work. In particular, the chapters on the key figures and ratios that investors use to choose companies that fit their portfolios should be fully understood.
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