In my previous role as an educator, besides teaching, I also spent many years analysing data and using the information to guide decision-making within the organization.
Data tells a story, but context provides the narrative.
Let me use my own dividend experience to illustrate this point. As you can see from the image below, this is the second consecutive year in which the dividends collected for the first quarter have dropped significantly.
Without context, this trend could be worrying. One might even extrapolate and incorrectly conclude that my annual dividends are decreasing.
That’s, of course, far from the truth.
While last year’s reduction was due to portfolio adjustments, this year’s reduction is simply due to the advanced distribution of Parkway Life REIT’s (SGX: C2PU) dividend of S$0.05.
This specific instance highlights a broader point about dividend analysis: short-term fluctuations don’t always reflect long-term trends.
You might also recall that my dividends hit a record high last year, growing 33% year-on-year (YOY).
This exceptional surge won’t be repeated this year. However, despite the Parkway Life advanced distribution, my projected annual dividends are still likely to surpass last year’s record.
Therefore, dividend reductions in any one quarter are not the whole story. Indeed, even a year of data is just a chapter in the larger trend, as shown in the image below.
As humans, we naturally seek patterns, and our minds are wired to think linearly.
It’s important to recognise that the world and our lives are often complex and non-linear. This awareness helps us focus on the bigger picture and longer-term goals.
So, while it’s pleasing to see increasing dividends every year, it’s perfectly acceptable to make adjustments as needed.
Whether it’s a change in investment strategies or life priorities, don’t let short-term linear thinking derail you from your overall narrative.
Finally, if you enjoy seeing an upward trend, like I do, zoom out to track it over a longer timeframe.
And I am definitely pleased with what I see in the above image, a reflection of my investment journey’s achievements over the past 25 years.
So, the next time you see a dip in your investments, remember to zoom out and look at the bigger picture.
Your long-term goals are what truly matter.
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