In this video, Chuck Carnevale, co-founder of FAST Graphs and “Mr. Valuation”, continues his series on portfolio construction by shifting the focus from retirees to younger, pre-retirement investors building wealth for the future-how young investors can build a future retirement with dividend growth.
Chuck begins by revisiting a previously constructed hypothetical portfolio for a retiree with $2 million needing a 5% yield to live on. While that portfolio produced over $100,000 of annual income, today’s video turns toward investors who still have 10, 20, 30, or even 40 years before retirement. For these individuals, portfolio construction is less about immediate income and more about long-term dividend growth, valuation discipline, and owning companies capable of increasing income over time.
Using FAST Graphs, Chuck emphasizes the importance of value investing in every type of portfolio. He demonstrates how the S&P 500 was attractively valued coming out of the Great Recession, making index investing a sensible strategy then. But today, with the index significantly overvalued, blindly buying the market means paying too much relative to true business value. The core message: price is what you pay, value is what you get.
Chuck walks through some exceptional dividend growth stocks that were once available at fair value but are now meaningfully overpriced. While they are outstanding businesses, purchasing them at today’s valuations makes it difficult to benefit from the “intrinsic value treasure map” represented by the orange line on FAST Graphs.
Shifting to the new portfolio for younger investors, Chuck constructs a 20-stock, $149,000 portfolio with $10,000 allocated to each company. The objective is not high current income, but rather building a collection of undervalued, high-quality businesses with strong dividend growth histories and the potential for rising future income.
Throughout the video on how young investors can build a future retirement, Chuck highlights why valuation discipline is non-negotiable. He provides examples of stocks like Align Technology, American Tower, Crown Castle, EPAM, Nike, and PayPal—great businesses that suffered large long-term losses for investors who bought at excessive valuations. The lesson: overpaying can lead to permanent losses, while buying undervalued companies allows fundamentals to work in your favor.
This is Part A, where Chuck will walk through the details of constructing a future-focused dividend growth portfolio for young investors. While there are many ways to invest successfully, he stresses that every approach should be anchored in valuation, growth potential, risk tolerance, and clearly defined goals.
FAST Graphs Analyze Out Loud Video to include SPDR S&P 500 ETF Trust (SPY), Apple (AAPL), Automatic Data Processing (ADP), American Express (AXP), Home Depot (HD), McDonalds Corp (MCD), Visa (V), Enterprise Products (EPD) FedEx (FDX), Raymond James Financial (RJF), Amgen (AMGN), Ameriprise Financial (AMP), Align Technology (ALGN), American Tower Corp (AMT), Alexandria Real Estate Equities (ARE), Crown Castle (CCI), Epam Systems Inc (EPAM), Lululemon Athletica (LULU), Nike (NKE), Paycom Software (PAYC), PayPal Holdings (PYPL), Ameriprise Financial (AMP)
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Disclosure: Long AAPL, HD, EPD, FDX, RJF, AMGN, AMP, PYPL, AMP.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
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