The Single Best Investment: Creating Wealth with Dividend Growth by Lowell Miller is a book that I have heard mentioned a lot over the past couple of years but it wasn’t until July that I decided to pick the book up and read it. When I purchased this book I bought two others as well. Of the three that I bought, this book was the only one that was focused on investing. Having finished the book now, I really wish that I had chosen to read it years ago.
Let’s take a glimpse at the subjects that were written about in the book.
Summary of The Neatest Little Guide To Stock Market Investing
The book begins by talking about the need in learning to accept a bouncing principal. This chapter is talking about the contrast between bonds and stocks. It makes perfect sense to begin the book here because if one chooses a single best investment strategy it will require a solid investment in companies that pay dividends. The author does a great job of explaining the principal in a very convincing way. A bond will return capital but it won’t keep up with inflation and it won’t be able to compound the same as a dividend paying stock.
The next chapter continues to build on the foundation laid out by introducing the reader to the 8th wonder of the world. If you guessed that the 8th wonder is compounding, then you would be correct. The core of the single best investment strategy relies on this principle of compounding. It is through compounding your investments that you can turn a small snowball into a very large snowball over time.
Now the author has laid out the path for us to begin to build a compounding machine. For this whole strategy to work it requires this compounding machine. Once the machine is working it will continue to grow and grow. The beauty of it is that it will continue to grow even if there is no new capital put to work.
To begin to build a compounding machine the author teaches valuation tools. With these tools you will be able to evaluate stocks so that you can investment your money in the best places to grease your compounding machine. The author gives you direction for which metrics you will need to look at for different types of investments. After he gives us these tools he then shows us the importance of charts. He isn’t really a fundamentalist or a technician. What he is is a story guy. He uses the metrics, charts and news headlines to tell a story. If you interpret the story correctly then the investment will pay off in the future. If you get the story wrong then the investment will be a flop.
He even touches base on the psychology of investing. This is very important because if you get the story right it will pay off in the long run. If you don’t have confidence in your decision you may decided to sell the investment before you have allowed the story to completely unfold.
The author gives a lot of examples of superior companies in many different categories. Armed with the lessons that he has taught and now armed with some great examples it is now time to set out to build a portfolio of stocks using the single best investment strategy.
Thoughts on The Neatest Little Guide To Stock Market Investing
As I mentioned earlier, I wished that I had read this book years ago. This is a great book for a beginer because of the way that all of the information is presented. Each chapter builds on the lessons that were taught in the previous chapters. If the strategy is executed you will truly build a compounding machine consisting of dividend stocks. In doing this, it will allow the value of your portfolio to grow exponentially. While I already employ a lot of the techniques that were discussed in the book, there was still plenty of information that I was able to absorb and add to my arsenal. I highly recommend this book to anyone but especially to someone who is just starting out on their journey to building wealth.
Have you read this book? If so, I would love to hear your opinion!
So far, I have been keeping up with my goal of reading one book a month!
Look for another new article about a different book next month!
As always I look forward to reading all of your comments and questions, until then….. happy investing!
-Jason from MoreDividends.com
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