Jeremy Siegel has been a well-respected name on Wall Street for years. His Stocks for the Long Run is a sacred text for any long-term investor, and in 1999, he accurately predicted the Internet bubble. So when Siegel talks, it's a good idea to listen. I recently finished his 2005 book, The Future for Investors. Siegel spends the first half of the book making crystal clear the two traits that, he argues, will always reward long-term, buy-and-hold investors. 1. A difference between actual and expected earnings growth, and 2. Dividends.

Now, Siegel was looking at returns over the long-term horizon. Sure, capital gains will yield strong results in the short term, but there's nothing that'll supercharge your returns in the long run like dividends. By reinvesting all of your dividends, the magic of compounding takes over, accumulating more and more shares of a company at almost no cost to you.

Source: Motley Fool

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