There are plenty of benefits of stocks that pay their dividends monthly, whether you are a retiree looking for income or an active investor looking for places to put your profits. According to the report that was just updated by WallStreetNewsNetwork.com, there are almost 300 different securities that pay monthly, most with very high yields. Technically, these stocks are real estate investment trusts, oil income trusts, closed end bond funds, and closed end income stock funds, which pay dividends every month. The advantages to having monthly dividends versus quarterly or annual dividend stocks are that your invested capital is returned faster, compounding happens quicker, and there is usually less volatility. As an added feature, many of these pay tax free income.
Some things to keep in mind when you are doing your due diligence and analysis on these investments. Be careful of the ones with high management fees, watch out for the ones with limited liquidity and which trade very few shares on a daily basis, and if you invest in the municipal bond closed end funds, make sure you know the consequences of the Alternative Minimum Tax. You also want to find the ones that trade at a discount to Net Asset Value, and avoid the ones using excessive leverage.
Source: Fav Stocks
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