I class veteran Richard Band of Profitable Investing as a "bold bull" because he was one of three letter editors who went positive on stocks after a particularly bad day in March 2003, pretty much at the low. He's been bullish, with a few hesitations, ever since. See March 13, 2003 column

Band caught my eye with a typically powerful promotional email on Sunday: "Make no mistake about it-now that the Democrats control both houses of Congress, you're going to see a number of changes that will affect your wealth."

Aargh! But it turned out, not for the first time with investment letters owned by the hard-driving Phillips publishing company, that Band's actual message was different than the implication of that eye-catching lead. In fact, it was the direct opposite. But still interesting.

Band wrote: "Right now, you must ignore the blather about what Democrats will or won't do on prescription drugs, oil company profits or trade deals. The biggest factor that will impact stocks in the next 20 years is already happening and it won't be stopped by what happens in Washington ... the most unstoppable demographic trend of our lifetime and a seismic shift that most investors are blind to: The retirement of over 76 million Baby Boomers."

Band does argue in his latest letter that divided government can be quite good for stocks. But he is more focused on demographics. His argument: " ... the largest group of savers and investors America has ever seen will soon be living on their assets consuming them, if you will to replace their lost work income. It's a no-brainer they will turn their portfolios of growth stocks and growth mutual funds into income-producing dividend stocks.

"The result: Dividend-paying stocks will outperform growth stocks for the rest of your investing life."

Among stocks Band is currently recommending for the portfolio he calls his "Incredible Dividend Machine," which is designed to pay dividends in every month of the year: telecom giant Verizon Communications (VZ

VZ

News , chart, profile, more

Delayed quote data

Add to portfolio
Analyst
Create alert

Insider
Discuss
Financials

Sponsored by:

) , ("a standout bargain. The stock is yielding a rich 4.7%, which instantly takes you about halfway to our projected annual return for the market over the next 10 years. Buy Verizon at $35.30 or less"); home improvement manufacturer Masco Corp. (MAS

MAS

News , chart, profile, more

Delayed quote data

Add to portfolio
Analyst
Create alert

Insider
Discuss
Financials

Sponsored by:

) MAS ("buy at $30 or less").

And the overall market? Band is still bullish. He wrote on Wednesday: "The path of least resistance is up! Stock prices chugged along into the close today, as traders left early for the Thanksgiving break. But the "chugging" had an upward bias to it, with the blue chip S&P 500 Index closing at yet another multiyear high."

"If this pattern is starting to look very familiar, well, that's how bull markets work. Once they build up a head of steam, they keep climbing and climbing as former doubters come off the sidelines and buy stocks. While it's possible that a brief pullback could follow the Thanksgiving holiday, we think the market will be higher by Christmas and higher still by the end of January."

Band thinks the Dow will gain 15-20% in 2007.

Band's rationale may be relatively new, but he has always favored a risk-averse approach. See May 4 column

This has earned him unspectacular but solid returns. According to the Hulbert Financial Digest, Profitable Investing's portfolios are up an average of 7.12% annualized over 10 years, slightly less than the dividend-reinvested Dow Jones Wilshire 5000's 8.85% annualized gain.