Ben Carlson

A Wealth of Common Sense is a personal finance blog that focuses on financial planning, investments, markets and investor psychology. You can use your common sense to help create a comprehensive financial plan. Ben Carlson, CFA helps manage the investment portfolio for an endowment fund and has been developing institutional investment strategies since 2005.

Dividend Stocks are Not a Bond Substitute

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The following is a guest post by Ben Carlson from A Wealth of Common Sense. If you would like to submit a guest post to The Dividend Ninja, check out our guest posting guidelines. “Compare this with a 50% drawdown in stocks in the past bear market and you can see that bonds and stocks do not have the same characteristics for loss.  Interest rates would really need to spike higher in a very short period of time to equal stock losses.  And unfortunately, rates can stay low for long periods of time.” Dividend Stocks are Not a Bond Substitute …

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McDonald’s (MCD): A Boring Dividend Stock for a Fast-Paced Market

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Written by Ben Carlson When bull markets are in full swing, investors become enamored with hot growth stocks.  This explains why names like Tesla (TSLA), Facebook (FB) and Netflix (NFLX) have garnered the attention of market participants with their fast-paced growth prospects and volatile stock price movements. It’s simply much easier to become more optimistic about future growth in technology companies when stocks are going up.  People are making money hand over fist and everyone’s happy.  This is why stocks with “can’t miss” narratives do so well in times like these.   Growth stocks become the sexy investments because they …

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Is the Stock Market in a Bubble?

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Written by Ben Carlson Investors seem to carry emotional scars from the dotcom bubble in 2000, and the debt bubble of the 2008 to 2009 Financial Crisis. Both bubbles caused massive losses for investors. Hindsight bias causes us to look at past events and assume they were much more predictable than they actually were at the time.  It’s the “I-knew-it-all-along phenomenon.” Since those crashes are so fresh in our memories, we are now subject to knee jerk reactions. Any time an investment rises in substantially in price we hear a chorus of bubble calls. Morgan Housel of the Motley Fool …

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Go Global for Higher Yield Dividend Stocks

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Written by Ben Carlson One of the biggest fears investors have right now, is that interest rates will rise substantially from their current historically low levels. Many believe this inevitable interest rate increase could lead to the underperformance of dividend paying stocks. Bonds are directly impacted by an increase in rates, but other income producing investments such as REITs, preferred stocks and dividend stocks could also be adversely affected. See my previous post – The Risks of High Yielding Investments. Since bond yields have been so low for so long now, dividend stocks have enjoyed a strong rise and have probably …

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