Dividends4Life: Are Dividend-Paying Stocks the Best Strategy During a Bear Market?

What’s the best way to survive and prosper when stocks slump? We are now in a full-scale market retreat that began on January 1, 2014. It is not surprising after the massive boom of 2013, when stocks climbed 30% or more. Steve Forbes said it best, “Everyone is a disciplined, long-term investor… until the market goes down.” Then people panic. What’s the best strategy -- (1) sell your stocks and go to cash? (2) sell stocks short and actually profit as the market retreats? Or (3) dollar-cost-average in stocks that inevitably will go up? For most investors, the smart answer is (3) to dollar-cost-average, especially in stocks that pay steady and rising dividends.

Lowell Miller, author of “The Single Best Investment” and money manager extraordinaire, insists on investing only in rising-dividend stocks. He states, “Dividend growth is the true signal of a prospering company.” Miller’s formula for beating the market is simple but powerful. He calls it “Investing with Peace of Mind.” His formula is: High Quality + High Yield + Growth of Yield = High Total Return. I like this statement by John D. Rockefeller: “Do you know the only thing that gives me pleasure? It’s seeing my dividends coming in!”

Source: Town Hall

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