From: "Elle" 
Newsgroups: misc.invest.financial-plan
Subject: BetterInvesting.org on Growth? (again)
Date: 14 Aug 2005 18:10:02 GMT
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	=zOv4

In its September magazine, Betterinvesting.org states:
---
[In] the early 1970s... the "Nifty 50" approach was the rage. The theory at
that time was to buy any of the 50 stocks that were considered classic
growth companies. Price didn't matter because as long as they grew, the
price was warranted.

Like any investment approach, if it becomes too popular the bubble can
burst. The era, of course, came to an end. Investors who bought Coca-Cola at
its high in 1973 had to wait 13 years for the stock to get back to that
price.
---

The article says nothing about Coca-cola's dividends during this period. In
fact, from Yahoo's charts (if I am reading them correctly), in June 1973,
the dividend yield was about 2.9% . For the next 13 years, dividend payouts
grew very steadily and at a rate of about 10% a year. Thus the dividend
yield on a Coca-cola investment made in 1973 grew to almost 11% by 1987. (At
other times during the early 1980s, the dividend yield was over 12%, due to
KO's low price relative to 1973.) If an investor factored in dividend
re-investment, he/she might in fact be doing much better than what
BetterInvesting.org implies.

Coca-cola's dividends have continued to grow steadily.

Betterinvesting.org seems to me a tad too geared towards timing and chasing
returns (with the concommittant failure that studies I understand indicate
occur with such a strategy) rather than long-term financial security. Or
maybe a "growth investing" strategy is inherently vulnerable to the hazards
of trying to time.

Doesn't Coca-cola's history from 1973-1986 for the greater part advocate
buying-and-holding (of dividend paying, slow classic growth stocks) vs.
BetterInvesting.org's growth strategy?

Just a thought as I continue to study long-term financial security for
individuals.