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Our Investment Philosophy


What makes us different?


The benefit of working with LPL Financial is our independence.  With over 40 years of experience in the industry, our team has narrowed down a unique and effective investment philosophy.  What makes us different is our ability to personalize every portfolio and do the management ourselves. We strive to limit the out-of-pocket costs to our clients by working on a fee basis rather than a commission schedule.  This aligns our interest’s with the clients’ and creates a conflict-free environment.  You can have confidence that when we make a suggestion in your portfolio, it is not to earn a quick commission, but rather it is for the betterment of the account.  


We strive on having a long working relationship with all our clients by meeting at least twice a year.  It is important that the investor understands what they are invested in and why.  Remember that we work for you and are here to address your needs first. 


What is “Dividend Growth Investing”?


“Dividend Growth Investing” can simply be described as constructing a portfolio of established businesses that have a track record of not only paying dividends, but increasing dividends every year.  It is true that history is no guarantee to future success nor repeated dividend increases overtime, however, there are over 245 publicly traded companies that have increased their dividend each year for the last 10 years in a row and over 100 companies that have increased their dividend for at least 25 years in a row.*  The objective of this philosophy is to own a basket of dividend paying companies that possess the ability to increase their current dividend sometime in the future. Investing involves risk, including the loss of principal. No strategy assures success or protects against loss.


Are all dividend paying companies the same?


To be brief, no.  The type of businesses that we look for are ones that are defensive in nature, have a high return on their initial capital expenditures, and have a moat to competition or high barriers to entry.  


What are the financial benefits of compounding and how can it help me pursue my investment goals?


Albert Einstein said it best, “The power of compounding is the 8th wonder of the world.” Investopedia describes compounding as, “The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous earnings.”** 


A Dividend Growth Portfolio takes advantage of this investing tool.  To demonstrate, let’s look at the following hypothetical example:


Assume you buy 100 shares of XYZ Corporation (Sym: XYZ) for $100/share on January 1st of 20X1 for a total initial investment of $10,000.  Assume that XYZ stays at $100 per share for simplicity in this example. On March 1st of 20X1, XYZ pays a dividend of $0.50 per share or $50 and you reinvest the proceeds and now have 100.50 shares of XYZ.  On June 1st of 20X1 XYZ pays another dividend of $0.50 per share and you again reinvest the proceeds, this time increasing your share total to 101.0025.  This process is repeated for the next 2 quarters to bring your share total at then end of year 20X1 to 102.015.  Now suppose XYZ increases its dividend to $0.65/share on March 1st of 20X2 and pays this amount for 4 quarters.  Your share total at the end of year 2 would total 104.6934.  This is a market value ($100/share times 104.6934 shares) of $10,469.34 as compared to $10,000 if you never received a dividend from XYZ.  In addition to this, your income in year 20X1 was $217.81 and in year 20X2 grew to $269.58.


In this example, we captured what is called a double compounding effect.  We not only compounded our money by reinvesting the dividends to buy more shares so that the next quarter dividend was higher than the previous, but we also compounded our money when XYZ increased its dividend in year 2.  This is essentially the goal of the philosophy to build a portfolio of stocks that have the ability to not only pay a dividend but increase that dividend overtime.  


Sometimes a stock will not increase their dividend to the industry expectations.  Sometimes a stock will cut its dividend to a lower amount.  Sometimes a stock will suspend its dividend altogether.  These are some of the risks to investing in dividend paying stocks and should be evaluated before investing. On ex-dividend date, the share price is reduced by the amount of the dividend.


What type of investments are right for me and my situation?


Not all investors are treated the same.  All investors should evaluate their risk tolerance, time horizon, liquidity needs, and investment goals before making an investment decision.  However, we believe that a Dividend Growth Portfolio can be a suitable strategy for a number of investors.  Whether you are a person in retirement years that needs a growing income stream to keep up with cost of living increases, or you are in your 40s and want to start saving for your retirement by accumulating wealth now by reinvesting every dividend—a dividend growth portfolio could be an appropriate option.  


If starting a Dividend Growth Portfolio sounds like a probable strategy to your investment needs, we would love to meet you and see if we could be any assistance in working towards your investment goals. 



*This data was derived from  We are not affiliated with  This data is as of December 2014.  The risks of investing in a dividend paying stock should be evaluated throughly before investing.  


**Investopedia is a website that defines investing terminology.  The website is

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