Investment Quality Trends (IQ Trends) is the third longest-lived newsletter in current publication. The first issue was published on April 1, 1966. The IQ Trends method to investing is based on an original interpretation of the Dividend Yield Theory, a value-based approach that uses a stock’s dividend yield as the primary measure of value. According to the Theory, when a stock offers a high dividend yield, investors will buy, which pushes the price up and gradually erodes the yield. When the yield declines, the stock is distributed until an absence of demand allows its price to fall. It then declines to a price level at which, again, the yield is attractive to investors. So rather than emphasize the price cycles of a stock, the company’s products, management, market strategy or other factors, IQ Trends’ approach stresses dividend yield patterns. IQT subscribers are guided to buy and sell when the dividend yield instructs them to do so. The dividend yield lets the investor know when a share’s price is genuinely high, low or on the move between those two points. Based on this profile and the current level of price/yield, each stock is placed into one of four categories: Undervalued, Rising Trend, Overvalued and Declining Trend.
