Success Breeds Success: Interview with Rida Morwa on Achieving a Major Milestone
High Dividend Investing (HDI), a service on both EWT and Seeking Alpha co-hosted by Will Barton and Rida Morwa, has achieved a major milestone.
The service, which is aimed at income investors and retirees, has passed $2 million in annual revenue in Seeking Alpha's Marketplace. HDI is the first service to achieve this milestone in SA’s Marketplace, which has more than 180 services.
HDI was also the first Marketplace service to reach $1 million in annual revenue, an achievement announced in May 2019. It has attracted more than 4,400 members since its launch there in January 2016, and in February 2021 launched on ElliottWaveTrader.
We recently caught up with Rida on the milestone in the Q&A below:
Tell us about High Dividend Investing, the audience, and what you can offer within the service.
"High Dividend Investing" (HDI), is a community of retirees and income investors. We use our "Income Method" to generate high immediate income and produce a livable yield from our portfolios. The way we achieve it is through an easy-to-follow Model Portfolio with target yields of +9%. Our aim is to assist those planning for retirement, or already in retirement, to build an income-generating portfolio that will match their needs.
To put it in other words: Have you ever walked into a building you've never been in before, for a very important meeting, and realized you're completely lost? There's a sense of dread and panic that grips you. Often, you eventually find your way thanks to one or more helpful individuals. For many retirees and investors, this is exactly what saving for retirement is like. They're told over and over how important it is to be prepared but have little knowledge or understanding of how to get to the destination. High Dividend Investing is designed to help get investors and retirees from point A to point B, making retirement possible for countless individuals who may otherwise have gotten lost along the way. The great thing about our setup is how engaged and friendly our community is, in addition to me and my team.
Our community is very lively, with more than 4,400 members who share ideas and bounce investment possibilities, or even option ideas, between each other. I like to think of HDI as a family environment. We're all seeking income from the market to create the best possible income portfolio.
Essentially, we find high-quality choices that produce the income our members live off or reinvest. We make it easy for investors by providing several income tracking tools, including our Portfolio Tracker, and importantly, our "Dividend Tracker" which helps our members know exactly when they'll receive their next dividend paycheck.
What Has Been the Secret Sauce of Your Success?
Our "Income Method" has been a key aspect of our success. Every good plan has a methodology to follow and ours is the Income Method.
The Income Method is driven by the "power of dividends." Think of it like having a car with a tank full of gas. So many investors and retirees neglect their portfolio's true potential by forgetting to tap into the power of dividends. How useful is a car without gasoline? You might be able to sell it later for a higher price than you bought it for, but having it sit around uselessly in the meantime is a waste of your hard-earned money!
I would rather have a great car to use every day, providing valuable returns, and when I sell it, recoup my money. This is our approach to the market. We focus on getting value NOW instead of hoping and gambling on getting it LATER.
HDI is successful because our methodology meets retirees and investors exactly where they are - recurring income and recurring expenses - instead of trying to make them jump through hoops that don't need to exist.
Lessons learned since you hit the $1 million mark?
Wow, great question. It has been a busy two years since we crossed the $1 million mark and reaching the $2 million mark. One thing we have been focused on is meeting the needs of our growing member base where they are.
One change we made during this time is to compile a weekly "Top Picks" for our members. We provide this report every Sunday which helps those who are busy to recap what happened during the week. These Top Picks have been a favorite part of HDI among our membership, alongside our Model Portfolio.
Obviously, a lot has occurred since you hit the $1 million milestone in 2019 - the Pandemic, the rise (and fall) of growth stocks, WallStreetBets and GameStop, among other events. During these volatile times - what has been the message to your followers?
Yes, a lot has happened! I feel like we're minting new dates for world history all the time lately.
One message has been a constant for HDI and our members through each event - "Focus on your income stream." We're hard-working individuals and as such we're hard-working investors and retirees. We expect our hard-earned money to work just as hard.
It's easy to get distracted by outside events or investment philosophies and lose sight of your end goal. There's the age-old adage of the man plowing his field. If he loses sight of his endpoint, he won't plow straight lines. Likewise, as income investors, we need to focus on what we can control and not the uncontrollable. We don't gamble on WallStreetBets-style picks or buy stocks hoping a premium to our cost basis appears to have any sort of return. As income investors, we don't spend a lot of time speculating in the market. We build our income stream and avoid the day-to-day headaches of prices swinging wildly. We enjoy irrevocable returns with each cash dividend we receive.
The pandemic really brought into focus for many members how our Income Method works in good times and bad. While many investors who were depending on "capital gains" sold during the pandemic and took unnecessary losses, most of our investors are income-driven, and we did not see as much panic as we saw among other investors. The vast majority of our dividend picks never missed a payment. Most of those that saw a dividend suspension resumed payment. We have many picks that are paying more than their pre-pandemic levels. If an investor had never looked at his account during that time, they wouldn't have known any difference as their income was as solid as ever. That's the goal. Dependable, reliable, stress-free income generation.
All that's to say our message remains the same as ever: Focus on your income stream. Wealth is having excess income vs. expenses. Riches are simply the by-product of a well-run portfolio.
Looking ahead, what are you expecting? What are you telling your audience in preparing for what's next?
The year 2021 has been one of the best years for our portfolio so far. Our portfolio is actively managed, which means that we do fine-tune it based on the macro-economic, market, and political events being shaped around us. We always try to be ahead of the game to maximize our members' returns.
Our theme for this year has been focused on the economic-sensitive stocks and sectors, and many of those are "value stocks" that did not participate in the strong bull market seen in the past few years. Value stocks tend to be the first beneficiaries during the initial phases of the economic recovery. They see the fastest growth. Also playing to their advantage is that they are the biggest beneficiaries of the economic stimulus plans that have been implemented. The valuation gap between these stocks and growth stocks is still wide. We see plenty more returns in terms of both high yields and long-term capital gains. We're also focused on those sectors that will benefit the most from the new administration's infrastructure spending.
For example, we have been long several stocks in the BDC sector that finances and supports small and medium businesses, the heart and engine of the American Economy. These smaller businesses also are the main beneficiaries of most of the stimulus plans that were implemented and will see their profits soar. This is exactly what we are seeing today. In the BDC space, profits are soaring and we expect big dividend hikes across our favorite picks. Here's an article on Owl Rock Capital (ORCC), a BDC that we like. ORCC yields 8.5%.
Another sector we're very bullish on is healthcare. If you are looking for bargains in today's market, this is the sector to be invested in. It enjoys many tailwinds including an aging population and changing demographics that's driving up demand for long-term care and the need for medical assistance to ensure healthier, longer lives for individuals. Healthcare is often a massive expense during the retirement years. Since COVID-19 hit, it has become an issue of national security. Many large firms have achieved significant breakthroughs for all kinds of diseases and are the "cash cows" of the future, ready for investors to benefit from today.
I continue to see a "Goldilocks moment," secular bull cycle for equities that is likely to last two years at least. The biggest drivers are strong economic tailwinds, accommodative Fed policy, cheap money, and plenty of liquidity with investors. Ultimately, it's liquidity that's the main driver, and we should not underestimate this. As the "Bubble of Cash" sitting on the sidelines continues to find its way to equities, this will be supportive to higher equity prices.
Looking ahead, I'm extremely excited about income investing in the long and short terms. Recent moves by the Biden Administration only continue to prove that income investing will keep on being an attractive means to extract wealth from the market.
We also expect to see inflation coming back to life as the Federal Reserve has loosened their reins and acknowledged that letting the economy run hot for a few years with low interest and plenty of liquidity is their focus at this time. We have been preparing our portfolio in advance for this eventuality. One good example is that we're buying fixed to floating preferred stocks that begin floating when we expect inflation and interest rates to rise. This allows us to be well prepared for our income to benefit from both events.
What can we expect from High Dividend Investing specifically in the weeks, months, and years ahead?
We're committed to the same principles that we have been since the inception of the service.
That is - to be the most exciting community of income investors and retirees vastly improving their chances to succeed. Our "Income Method" generates strong returns, regardless of market volatility, making retirement investing simple, straightforward, and less stressful.
If your retirement portfolio is likened to a farm, you can take your neglected and mismanaged land and breathe life back into it. We have the tools available to turn that trickle into a roar, providing a bumper crop for future years, I love looking at my portfolio from an agricultural mindset.
Likewise, you also can take your hard-earned capital, and instead of planning to slowly liquidate all your hard work, you can set in motion a plan to see that capital working hard to earn you income and provide for yourself and your family. You also can make plans to pass it on to future generations, setting forth a pattern of multi-generation wealth development that future generations will look back on and be thankful for. You can be the change in your family's financial standing. We can provide the tools to make that possible.
On a final note, we are currently offering a two-week free trial (those already logged into EWT can add it here), and I would encourage readers to take it in order to have a look at our investment strategy and stock picks. I'm confident that you will like the service, and that we can help you generate a higher and safer level of income.
High Dividend Investing Asks, Are You Feeling Lucky?
You don't need luck to see success, but being part of the largest and most exciting community of income investors and retirees vastly improves your chances. Our Income Method generates strong returns, regardless of market volatility, making retirement investing simple, straightforward, and less stressful!
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