There are different approaches to dividend investing, and it's important to understand what different
kinds of dividend stocks have to offer.
Not exact matches
That's because there's a margin
of safety, or a buffer, that's often built right in when you buy a
dividend growth
stock that's undervalued, as that favorable gap between price and value also means there's less
of a possibility that the
stock becomes worth less than you paid through some
kind of negative event (corporate malfeasance, investor mistake, etc.).
While
dividend stocks can provide you with a steady stream
of income, not all
of them will produce the
kinds of investment returns you're looking for.
DIvidend stocks are
kind of a cult right now, and will suffer some significant setback, particularly if interest rates rise.
The S&P 500 ® was up 22.1 % YTD as
of Dec. 19, 2017 (including reinvested
dividends), and international
stocks were generally even more
kind to USD investors (S&P Global Ex-U.S. BMI Gross Total Return [USD] was up 26.3 % YTD).
If I had invested in more safer
stocks (such as the famed
Dividend Aristocrats), then I would have lower yields and it would have taken more time and / or capital to attain the kind of monthly dividend income I n
Dividend Aristocrats), then I would have lower yields and it would have taken more time and / or capital to attain the
kind of monthly
dividend income I n
dividend income I now have.
According to StreetAuthority's Nathan Slaughter, it's precisely this
kind of stock — and other
dividend growers like it — «that will turn into the high yielders
of tomorrow.»
JA: So, I
kind of like his concept here, because it depends on how many other asset classes that he has and everything else, is it individual
stocks, does he have mutual funds, and how much
dividends are kicking out, and how much money that he has, and I think that's what you were trying to say?
These allow you to put money into various
kinds of investments (savings account, bonds,
stocks, ETFs, mutual funds) and you don't pay any tax on the capital gains,
dividends or interest.
If a mutual fund holds
stock more than a year and sells it for a capital gain, for example, part
of your
dividend from the mutual fund will be treated as long - term capital gain, allowing you to benefit from the lower tax rates that apply to that
kind of income.
Give me Procter & Gamble, which has paid some
kind of dividend every quarter since becoming a publicly traded
stock in 1890.
This
kind of «buy and hold» strategy, coupled with an elite
dividend growth
stock like Hormel, could set you up for decades
of safe, steadily - growing passive income.
I see Apple as a fantastic
dividend growth
stock moving forward, especially if there is any
kind of repatriation tax reform after the US presidential election.
As these
dividends are coming in at this
kind of pricing level we are able to buy back more
stock for our clients at even lower prices.
But shareholders
of domestic
stock funds will not have to worry about reporting foreign
dividends or gains
of any
kind.
The easiest to implement, and the most effective approach, is to hold a combination
of the
kind of income equities Chief Income Strategist Marc Lichtenfeld recommends in his
dividend -
stock service, The Oxford Income Letter, and the types
of bonds I recommend in Oxford Bond Advantage.
Not only have those
kinds of stocks fallen less than the market as a whole, but you continue to reap the uninterrupted benefit
of steadily growing
dividend cash flow.
If you want a
dividend payer with that
kind of resume, you need to zero in on the most reliable
dividend payers on earth, companies that are in one
of the most exclusive clubs in the entire global
stock market.
Here's how it works: Certain companies issue
stock that stipulates its
dividends — which are a
kind of payment that goes to shareholders — will be paid, instead
of cash, in the form
of more
stock.
It's the
kind of market environment that raises comparisons to 2007 - 09, and the dot - com crash — periods that emphasized just how vital it is to have a stable
of trustworthy, bulletproof
dividend stocks like the five portfolio pillars I want to show you today.
An absolutely excellent company, the
kind of stock that once you buy, you never sell — letting the growing
dividends that you receive every three months do the talking.
Therefore if two
stocks, Canadian and International, both produce 7 % total growth (all
kinds of it:
dividends, capital gain etc.), would not you be better with the Canadian one anyway, as the International will be taxed in another country?
Your 185 shares would have grown into 314 shares (this is the
kind of fun stuff that can happen when you reinvest $ 141 automatically into a share
of stock that trades at $ 36 per share and pays out $ 1.80 per share
of its own in
dividends).
In this post, I'm going to discuss some strategies to buy
dividend stocks (or any other
kind of stocks) in the cheapest manner possible at discount brokerages.
However, where can one found reliable information about the number
of issued
stock, the voting rights, if there is more than one
kind of stock for a given company, if the
dividends are always paid, etc..
This is just like an ongoing process — that the
stock price is going up and the market's adjusting the price — and it's
kind of hard for
dividend investors to get out
of that spiral.
These
kinds of shares generally carry a fixed
dividend that needs to be paid out before the company can distribute any
dividends to common shareholders, and preferred
stock usually has no voting rights.
2015 Passive Income: Let's Talk Money Establishing passive income streams has been
kind of an obsession
of mine for these past couple
of years and I've been working really hard to diversify away from
dividend paying
stocks into more active, online business
kind of stuff.
Dividends are kind of overlooked since the next «hot» stock is always on people's minds, but dividends seem to work well behind the scenes to help produce great
Dividends are
kind of overlooked since the next «hot»
stock is always on people's minds, but
dividends seem to work well behind the scenes to help produce great
dividends seem to work well behind the scenes to help produce great returns.
Or is the idea that it's a
kind of (unreliable) bond where you can invest $ 1,000,000 into the
stocks and get a decent return every year through
dividends?
Companies that have high return on capital and don't have a very capital intensive business — our
kind of companies — usually will have substantial free cash flows, which allows them to grow earnings organically, pay a
dividend and buy back
stock.
So imagine that all
kinds of income is earned income including
dividends from
stocks, interest on fixed deposits, money found on the road, the diwali bonus from your employer, income tax refunds and for that matter even the money gifted from your grandmother.
It is true that many
dividend paying
stocks don't experience the
kind of short - term returns that you can see with growth
stocks, but in many cases a
dividend paying investment is one that is solid, offering regular profits.