Dividend Accumulation Strategy
An investment approach focused on accumulating stocks with high dividend yields or growth potential, aiming for long-term income and appreciation.
Dividend Accumulation Strategy Overview

As experienced investment portfolio managers, we often look for strategies that can grow our clients’ portfolios consistently. One of these strategies is the Dividend Accumulation Strategy, which focuses on buying and holding shares of companies that pay dividends. These are not just any companies but ones with a historical record of maintaining or increasing their dividend payments over time.
What does this strategy entail? Essentially, we reinvest dividends to purchase additional shares of the company. This method has a compounding effect, as over time, these reinvested dividends can buy more shares, leading to larger dividend payments, which in turn buy more shares.
Here’s a brief overview of how a Dividend Accumulation Strategy can work:
Year | Shares Owned | Dividend per Share | Total Dividends Received | Reinvested for Additional Shares |
---|---|---|---|---|
1 | 100 | $2 | $200 | 10 |
2 | 110 | $2 | $220 | 11 |
3 | 121 | $2 | $242 | 12.1 |
*Note: This table assumes the share price remains constant, and no additional investments have been made._
Our objective with this strategy is to capitalize on the power of compounding. By doing so, we aim for our clients to not only gain from potential capital appreciation as share prices grow over time but also from the increasing volume of shares they own due to reinvested dividends. This can result in a snowball effect, growing the initial investment at an accelerating rate.
Our approach is grounded in selecting solid companies with strong dividend histories and the potential for continued growth. We prioritize a long-term perspective and patience, as the true benefits of this strategy unfold over time.