19 To Like About Dividends

When I wrote my first Top 40 eBook in 2008, I included a chapter entitled, "Why Invest in Dividend Stocks?" I discussed the pros and cons of dividend growth investing. On the "pro" side, I had 9 reasons to invest in dividend growth stocks. A couple of weeks ago, I published the 2013 edition. My number of reasons to like dividend growth stocks has grown to 19. Here they are.

1. Dividends bypass the market
2. Dividend investing can relieve obsession over market volatility
3. Dividends are real cash money
4. Dividends are always positive
5. Dividend investing provides ongoing feedback about your investment
6. Dividend growth companies are usually outstanding businesses
7. Dividend increases are usually a positive sign about the company
8. Dividend companies tend to use their cash wisely
9. Dividend programs tend to persist
10. Dividends increases continue even when stock prices decline
11. You do not have to sell the stock to get the dividend
12. Dividend payouts rise over time
13. Dividends have a low tax rate
14. Dividend stocks tend to be less volatile
15. Your principal can increase over time
16. Historically, dividend growth stocks have outperformed the market in total returns
17. You can reinvest dividends to accelerate the compounding effect
18. Rising dividends protect against inflation
19. You do not need any more invested to generate 4 percent income rather than 4 percent from sales

Source: Seeking Alpha

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