Posted by
4Life |
Thursday, September 02, 2010
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Uncertainty and wild market gyrations (such as the 20-point swing in the S&P before and after the economic data release Friday) make it more difficult than ever to profit in this market. Even growth stocks, whose sales prove resilient in the face of this economic roller coaster, are suffering.
Yet nobody cares; bears are in control. It seems all ships rise in a rising tide, and all fall when the tide recedes, regardless of growth or prospects of the “ship”. This is the exactly why dreadnought dividend stocks such as AT&T (T), Verizon (VZ), and Total (TOT) should be key parts of the average investor’s portfolio. Dividend stocks are the essential hedge against market volatility.
Source: Minyanville
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Posted by
4Life |
Thursday, September 02, 2010
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Does the old adage "A bird in the hand is worth two in the bush" apply to investments? When it comes to stocks that pay dividends vs. those that don't, the answer is yes. According to Standard & Poor's, dividend-paying stocks in the S&P 500 outpaced the nonpayers in the benchmark index by 1.63% compounded annually from the end of 1979 through July 2010.
The stocks that pay dividends also tend to be less volatile. "They don't go up as much in the good times and they don't go down as much in the bad times," said Howard Silverblatt, senior index analyst at S&P. "The trick is to find a dividend that's safe," Silverblatt said. One way to do so is to look at companies whose profits are at least twice what they pay in dividends. Silverblatt said that 76 companies in the S&P 500 fit that description and yield more than the 10-year Treasury note, which yields 2.64%.
Source: Daily News
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Posted by
4Life |
Wednesday, September 01, 2010
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With tax rates on dividends expected to go higher next year, financial advisers should start assessing the risk/reward tradeoff of owning dividend-paying U.S. companies, according to a report last week by Howard Silverblatt, senior index analyst at Standard & Poor's index division. Tax cuts on dividends paid by U.S. companies have saved equity investors $275 billion over the last eight years, he reported.
But unless Congress decides this fall to extend the tax cuts, the maximum dividend tax rate will increase next year from 15% for qualified dividends to 39.6%. This tax increase might cause some investors and advisers to rethink their investment strategies, Mr. Silverblatt wrote. “With dividend stocks, it's what you keep, not just what you make,” he said.
Source: InvestmentNews
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Posted by
4Life |
Wednesday, September 01, 2010
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The dividend stock will never be the biggest winner in the room. It won't make headlines. But the dividend table has the best odds. Study after study has confirmed that. For instance -- and don't get me started here -- Ned Davis Research found that from 1972 to 2006, non-dividend stocks in the S&P 500 returned just 4% annually, while dividend payers returned 10% annually. Sure, the biggest winners came from the non-dividend group, but the odds of finding them in advance are very low. I'll rub elbows with old ladies all day long if I'm making money (and friends) in the process.
In fact, a monkey throwing darts at dividend stocks may be able to beat the S&P average. One way to start is by finding a few stable dividend companies that you'd like to own even without the yield. A rookie mistake is to sort stocks by yield and just buy the highest. Often, yields above 9% come from companies on shaky ground -- the stocks have been hammered, making the dividends look high in comparison. It's best to start with safe companies and then build out.
Source: Motley Fool
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Posted by
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Tuesday, August 31, 2010
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“After getting married I started to really focus on my future and when I looked at my nest egg, I thought it should have been a lot bigger,” Steve Wood says. So he decided to investigate. Mr. Wood ended up selling his mutual funds. “I learned how mutual fund fees were eating away at my return and decided to cut out the middleman by investing on my own.”
What resonated with him instead was investing in dividend stocks. “I read a lot of books, magazines and websites about dividend investing, and learned a lot. “My investment strategy is simple,” Mr. Wood says. “I buy solid, blue-chip Canadian companies that pay growing dividends.” He prefers to buy when the stock price is lower than normal and the yield is high. Bear markets are thus often good times to buy shares in these types of companies.
Source: Globe and Mail
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