Doing this will:
1. Help you avoid making big mistakes in the stock market;
2. Increase your chances of beating the market; and
3. Be less volatile than the rest of the market.
Just look at the chart below,
http://www.investmentu.com/2007/November/dividend-paying-stocks.html
According to the most recent studies, dividend-paying stocks outperform non-dividend paying stocks by a wide margin.
Over the past 35 years, non-dividend paying stocks have gained an average annual return of 2.5%. That’s less than T-bills. But dividend-paying stocks have averaged an annual return of between 8.9% and 10.9%. That’s a huge difference.
Where can one consistently find value in quality companies that are likely to succeed? The answer is simple: Buy a portfolio of stocks that pay rising dividends, or that start paying dividends. There’s plenty to choose from…
1. High-dividend U.S. stocks, funds and ETFs
2. High-yielding foreign stocks and funds
3. Rising dividend stocks and funds
4. High-yielding Dow stocks
5. Business development companies (BDCs)
6. Real estate investment trusts (REITs)
7. Energy and commodity stocks
Avoid “The Growth Trap”
Brokers usually tantalize their clients with hot tips about new and bold technology breakthrough stories, and investors bite. Big mistake.
The fact is, most technology “growth” stocks fail to deliver. Jeremy Siegel, the Wizard of Wharton, calls it the “growth trap” in his book, The Future for Investors…
“The most innovative companies are rarely the best place for investors,” he boldly declares.
Why? Because investors invariably overpay for tech stocks.
And Peter Lynch, the legendary money manager of the Magellan Fund, confesses, “I note with no particular surprise that my most consistent losers were the technology stocks.” Well, it’s a surprise to me.
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