General Electric (GE) broke out today and made a new high. The price trend is bullish for daily, weekly and monthly time-frames. Of course, I prefer to buy stocks based upon solid fundamentals. However, when I do, I also prefer to not fight the tape. Conventional wisdom advocates that one buy low and sell high, which is something I prefer as much as possible. However, there is nothing wrong with buying high and selling higher, especially if one’s investment horizon is long-term.
Then again, when one considers the long-term benefits of a owning a consistent grower and payer of dividends, then perhaps anytime is a good time to buy. General Electric is such a candidate as it has averaged almost 16% annual dividend growth for the past 5 years. Assuming that it will maintain this growth for the next 5 years and perhaps maintain an average growth rate of 10% thereafter for another 5 years, it makes for a good core holding in one’s portfolio over a 7-10 year period. Compounding dividend growth can power any portfolio if one is patient and has the time.
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