There should be well-thought-out reasons for why each and every security deserves a place in your portfolio. Regarding individual common stocks, the primary reason I own them is for the potential dividend growth. A secondary reason is for the potential capital appreciation. I like to think of companies that have a history of raising dividends on a regular basis as providing an income stream similar to that of a variable-rate bond—except the rate, in many cases, rarely goes down.
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