Dividend Growth Investing Done Better Part 5

In part 4, we discussed a logical, systematic, statistical and scientific approach to selecting and weighting dividend investments. This approach creates a major foundation for what we do at Mirador – it tells us what we should want to buy.

BUT…and it’s a BIG, BIG BUTT……35 years in the business has taught me that the markets are not always logical, systematic, statistical and scientific. Instead, markets often go through periods when they move more on emotional factors like greed, fear and hope. And in these times, people start making decisions more influenced by their psychological biases and heuristics. This results in investors driving the markets in directions and to extremes that are not supported by the data or financial logic.

For this reason, Mirador’s security selection and implementation always have a technical analysis overlay. As good as a company might seem on paper and in a model, we adjust our buying amounts and timing with technical analysis.

Technical analysis is the study of price and volume. Prices change when there is a misbalance between supply and demand.

Mirador technical analysis is artificial intelligence applied as a tool to 50-year-old proven indicators of trending and regression. Mirador’s technical analysis helps us determine when demand is in control over supply and driving prices upwards or vice versa.

In the end, the price is right, and that’s what must be prioritized in a decision – not a model ranking, a research report, or a story about the company in the financial media. For Mirador, the quantitative facts and the technical analysis guide us towards better portfolio management decisions that provide high income and stability of capital.

Call me at 403-718-0125 or visit our website at miradorwealth.com if you’d like to learn more.