Insight is Capital™ Podcast

125 Dividend Payers and Growers: Resilient During Periods of High Inflation and Rising Rates

Aug 10, 2022

01:15:44

We had the pleasure of interviewing Sri Iyer, Managing Director and Head of i3 Investments™ recently about what is, in our humble opinion, a seminal conversation on Dividend Investing.

2022 has been a challenging year so far for most investors. Both stock prices and bond prices have taken a beating, marking perhaps the abrupt end to a 40-year period of gains like no other, and a rate of inflation not seen since 1983.

It's time for advisors and investors to take steps to immunize their portfolios against the challenges of the current environment of inflation volatility and rising interest rates.

Investing in companies with consistent and growing dividends can provide core building blocks to grow your capital while managing risk in the current environment and over the long term, regardless of changing market conditions, including during periods of high inflation and rising rates.

Sri Iyer is among a minority of leading portfolio managers who have successfully devoted their lives to a profound study and implementation of quantitative approaches to the sphere of dividend investing that for the better part of the last two decades, has gotten less notice by most investors.

This is most likely because since the GFC (c. 2008-9), growth stocks, or rather, 'high duration' stocks stole the show. During that time Iyer and his team at Guardian Capital sharpened their dividend investing skates to more accurately identify which companies had dividend paying strength and sustainability, and those which had a high probability of growing their dividends; and, on the credit risk management side, they also handily determined a methodology they could implement to identify dividend cutters.

Beginning in 2017, Iyer and his team began their dive into big 'alternative sources' data with the assistance of artificial intelligence (AI) to sift through tens of millions of points of abstract and empirical statistics, the objective being to bring them to the end zone (think football) of the dividend stock selection and risk management process.

Listen in as we wend our way through what is a truly seminal deep-dive into what is the impetus of seeking success at dividend investing in the first place. Even if you believe you understand what are the sound premises of dividend investing, this is truly time well spent on a subject you may be under-appreciating right about now.