Dividends Beat Inflation

Dividends are a proven way to beat volatility. In up or down markets, dividends will consistently help you to grow your portfolio. Better yet, if you reinvest those dividends you're creating a formula for market-beating success. Dividends also protect you against inflation, which is a destroyer of wealth. Since the creation of the Federal Reserve in 1913 the dollar has devalued by 97%, when compared to commodities like gold. The moral of this story? Dividends protect your wealth.

A dividend portfolio is a great way to generate consistent returns in the market. Apple and BP are two companies most likely to see strong stock and dividend appreciation. Apple may decide to play nice with China Mobile and the BP trial is already underway. In fact, most of the bad news may already be baked into the BP story. Verizon is especially attractive because of a potential deal with Vodafone. Also its business continues to be extremely sticky. Ultimately, as long as you have exposure to some dividend payers, you have a decent chance to beat inflation.

Source: Motley Fool

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