"Do you know the only thing that gives me pleasure? It's to see my dividends coming in."
John D. Rockefeller
Need more income? Join the crowd.Scads of folks are scouring the landscape for decent income investments to beef up their monthly take home - especially now, with gas and other everyday items skyrocketing.
Thing is, with Bernanke & Co. printing money like there's no tomorrow, the returns on bonds, CDs, and money market funds are almost nonexistent.
Instead, many people have turned to making big bets on growth stocks.
But let's face it. Betting all your marbles on the next "hot stock" can be dangerous... especially in the current landscape.
By itself, one crazy out-of-your-control market plunge can lay waste to the best laid plans - and your retirement. And it won't matter how good your picks are... or how much homework you've done.
But here's the thing. You can get cold, hard cash on a monthly or quarterly basis - significant amounts of cash - simply by investing in companies with solid finances and strong management teams... companies that firmly believe they should reward loyal investors with steady and substantial dividends.
Fact is, if dividend-paying stocks aren't a major part of your portfolio, the odds of having success in the markets are stacked against you. History reveals that investors who hold great stocks and reinvest the dividends can count on outperforming every major investment sector - including gold, silver, T-bills, or bonds - by a wide margin.
Nothing else even comes close. And there's no reason to believe that will change any time soon.
In Triumph of the Optimists: 101 Years of Global Investment Returns (2002), the authors looked at stock returns from capital gains and dividends from 1900 to 2000. They found that a portfolio with dividends reinvested would have generated nearly 85 times the wealth of the same portfolio relying solely on capital gains.
Want more proof? Dr. Jeremy Siegel, known as the Wizard of Wharton, conducted an exhaustive study of stock market returns from 1871 through 2003. In his study, he showed that over a 135-year period, owning stocks and reinvesting the dividends produced 97% of all stock market returns, while a miserly 3% came from capital gains.
Let me repeat that. Dividend-paying stocks account for nearly all the returns investors gained in the history of the U.S. stock market.
Furthermore, by reinvesting the dividends - a key factor - stocks clocked in with a 6.8% annual rate of return for the last 200 years. That means the purchasing power of dividend stocks has doubled, on average, every 10 years over the past two centuries.
But there's more...
In addition to a nice steady stream of cash, dividends provide another advantage in market downturns. When you reinvest your dividends while the stock is cheaper, you automatically add to the number of shares you own... and your subsequent checks get much bigger down the road.
It's no secret - a company's dividends play a major role in its performance. Yet many investors completely ignore this important fact.
But you can't buy just any dividend stock. History shows you must focus on the crème de la crème, the companies that are consistently growing their dividends.
Ned Davis Research compared the returns of all the stocks in the S&P 500 from 1972 to 2004 based on the companies' dividend-paying policy. The study showed that companies that consistently grew their dividends returned 10.6% per year, more than double the returns of companies that cut or eliminated them.
This is even more important if you're about to retire. Dividend growers provide consistent income and protection against market losses. That beats the heck out of cashing in your stocks to generate income every time the market tanks.
The fact is, if you're not getting paid cash on your investments you're probably losing out. And there's absolutely no reason for that... you can have your cake and eat it too.
We've put together a special report that focuses on five stocks with operations all over the globe that have high and secure dividends... that yield significantly more than their historical average. These companies have such dominant business franchises that they generate exceptional cash flows.
Best of all, each of them has made a commitment to share that cash flow with their shareholders through high - and ever-growing - dividend payments.
Of course, every investment carries some risk. But all of the companies in our report have a stellar performance record of delivering growing dividends over decades. Even in the worst years for the stock market, they've paid out big cash dividends to their investors like clockwork.
These stocks put you in control... You decide how many checks to receive and when.
So while you're sitting through this gyrating, up-and-down market, why not make 10%... 18%... or even 20% on your money?
No comments:
Post a Comment
Thanx :)
Ivy