Bringing The Pieces Together
Tuesday, January 17, 2017
We all know that there is no such thing as the perfect investment, but I have one that comes pretty darned close.
It offers you a tantalizing triple play of greater safety plus growth plus a steady stream of cash.
Yet many investors are missing out on this investment because of some widespread misconceptions and dangerous myths.
So letís take a few minutes to dispel those myths and talk about how you can profit from the almost perfect investment ó Dividend-Paying Stocks.
Myth #1: Dividend stocks are for widows and orphans who want safety and are willing to sacrifice overall return to get it.
The following chart should change the way you think about investing in dividend-paying stocks forever...
As the chart above shows, when you take dividends out of the performance equation, historical return for stocks falls from 10.1% annually to only 5.8%. As you can see, dividends are responsible for more than 40% of the marketís annualized long-term total return. Incredible!
That means that if you arenít investing in dividend-paying stocks, you are leaving money ó and lots of it ó on the table.
Myth #2: Dividend-paying stocks are the slow, boring way to invest.
There was a time when being a ďdividend investorĒ was practically synonymous with being a shareholder in public utilities ó companies like Ma Bell and Standard Oil. But not anymore.
Stocks like Intel, Microsoft, Texas Instruments, Target, Mattel, even Nike all pay dividends.
Even tech superstar Apple has hopped on the dividend bandwagon, paying more than $10 billion in its first year alone!
These are NOT your fatherís dividend stocks!
Thatís why at AAII Dividend Investing, we scour the entire market in search of the best dividend-paying stocks. No industry or sector is off limits. And our diversified portfolio shows it.
With AAII Dividend Investing, youíll find everything from consumer staples, pharmaceutical and financial to manufacturing and technology ó and, yes, even a few high-yielding dividend-paying utility stocks make the cut.
Click here to Start Your No-Risk 90-Day Trial Subscription to AAII Dividend Investing. This special offer is only available to those affiliated with AAIIóplease do not forward this email.
Our portfolio certainly contains some companies you are likely to know, but also many that fly under Wall Streetís radar and are overlooked by investors. (In just a moment, Iíll tell you how to get risk-free trial access to our complete portfolio.)
But there is one thing our portfolio does NOT contain.
Myth #3: The bigger the yield the better.
One thing we NEVER do is look for stocks with just the highest yield.
In fact, an unusually high yield can actually be an important red flag because it can often signal a troubled company, undue risk, and the possibility of a fall in share price.
Rather than chasing yield, we tirelessly screen over 2,500 dividend-paying companies using a comprehensive system that quickly weeds out risky stocks and identifies the select dividend stocks worthy of your investment.
Myth #4: Paying dividends stymies a companyís future growth.
Hereís a simple fact that most investors donít know: Over the past four decades, stocks with rising dividends outperformed every other type of stock.
This 44-year study from Ned Davis Research and Oppenheimer Funds tells a clear story:
As you can see, stocks with rising dividends greatly outpaced the stocks that cut their dividends or simply did not offer a dividend in the first place.
Letís look at what that means in real numbers...
$100,000 invested 44 years ago in stocks with no dividends would be worth $9,157,000 today.
$100,000 invested in stocks with fixed dividends would be worth $15,256,000. Not too shabby.
BUT that same $100,000 invested in Rising Dividend Stocks would be worth an amazing $21,950,000! Note, investing in Rising Dividend Stocks over fixed dividend stocks would have boosted your profits by an average of 43% each and every year of the 44-year study.
Are you really willing to leave an extra $6.7 MILLION or more on the table?
Here at AAII, WEíRE NOT and thatís why our Dividend Investing newsletter focuses solely on stocks with a history of raising their dividend payments to shareholders.
An Almost Perfect Investment
Once you get past the myths, itís easy to see that dividend investing is an almost perfect strategy can give you superior total return, a steady income stream for life and protection in market downturns.
For income investors, dividend-paying stocks are favored because they can provide the stability, safety and income you want. But unlike the fixed interest payments of bonds, dividend-paying stocks can also give you growth from both a rising dividend yield and from a rising stock price.
PLUS, dividend investing helps to minimize your risk, providing a cash cushion during volatile markets. Stock prices may rise and fall, but dividends can reward you year after year after year.
But how do you find the best dividend-paying stocks to buy among the more than 2,500 available?
Well, thatís where our newest publication AAII Dividend Investing letter comes in.
Our AAII Dividend Investing newsletter focuses exclusively on helping you uncover top-notch stocks that have a history of raising their dividend payments to investors.
In fact, the companies within the Dividend Investing Portfolio average an impressive 17 consecutive years of dividend increases!
Thatís been good for the stocks in our portfolio and good for our subscribers! Thatís why I want to help you put these Rising Dividend Stock superstars to work for you today.