Why Dividend Paying Stocks Should Fill Your Portfolio

Dividend paying stocks...

1. Have contributed to 43% of the stock market's 10% long-term performance.

   Without it the stock market would have returned only about 6%.

2. Contributed about 90% of a stock’s growth during this most recent decade’s “sideways market.”
3. Pay for themselves and keep on growing!

   A 30-year old who invests $1,000 in a stock paying a 4% yield will end up making enough income for that investment to pay for itself by the time he is 45 years old.

   By the time he is 65-years old the originally investment will have a yield on cost 0f 35%!

4. Are less volatile than non-income paying stocks.
5. Fall less and recover more quickly in bear markets.
6. Allow you to make money 3-ways instead of just one:
   • You get paid on a regular basis.
   • You get paid in capital gains when selling the stock.
   • You can get paid by using the stock you own to employ stock option strategies (which we discuss on this website).

A portfolio composed of dividend paying stocks makes the most sense because it gives individual investors several ways to profit.

There is an additional advantage in that dividends currently enjoy favored tax status with a special dividend tax rate.

Passive income can and should be a part of your retirement strategy.

One Way To Find The Best Dividend Paying Stocks

That service is called Value Line.

They are regarded as one of the most respected investment research services and have been in business for over 80-years.

They offer several different products but the three products I use are the Value Line Investment Survey, The Value Line Investment Survey – Small and Mid-Cap Edition, and the Value Line Investment Analyzer.

Value Line is probably best known for its Timeliness Ranking System which ranks stocks based on their algorithm as a predictor for stock performance over the next six to twelve months.

As a value dividend investor I do not rely on those rankings because I prefer to buy stocks based on discount to valuation.

What I do like, however, is the breadth of stocks they track (about 1,700 in over 90 industries in the Investment Survey, plus 1,800 more in the Small & Mid-Cap edition).

I cannot do without their Investment Analyzer because I can screen stocks using 300 parameters and up to 10-years of historical data.

I recommend you check out Value Line. It’s well worth the money if you are serious about your investment performance. They offer an inexpensive 13-week trial subscription so you can’t go wrong.

Click here to find out more!

Avoiding Losses

Even though your stocks continue to pay dividends after the stock market sustains a huge loss, you also don't want to have to continue sitting on a huge loss in your portfolio.

Wouldn't it be nice to have a hedge in place during stock market crashes? The hedge creates cash as the stock market falls allowing you to either buy more shares of stocks already in your portfolio, or allowing you to invest in other great dividend paying stocks.

I have refined a simple, effective, and low cost hedging strategy using put options to protect my portfolio.

CLICK HERE to learn more about my eBook.

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