Dividends4Life: A Focus On Dividends Can Transform Your Investing Approach

Rob, whose last name we’ve left out to protect his privacy, is a 61-year-old government employee in Ottawa. For years he invested in high-fee mutual funds with lousy returns. Last year, he made the switch to managing his own dividend portfolio after hearing a local investing author on the radio recommend the strategy. He’s never looked back. Rob’s story illustrates how, with some homework, discipline and a game plan for selecting stocks, a do-it-yourself investor can build a conservative portfolio of dividend-paying companies that will provide a long-term source of income.

Before he discovered dividends, Rob felt that the only way to make money in the market was to “buy low, ride the price up and then sell.” But as he researched dividend investing, he began to see that it’s the antithesis of speculation. “I realized you could hold an investment that would pay you a return on your money,” he says. “As a shareholder, I’m an owner of a company, and they’re paying me back a percentage of their profits.” If the company’s profits are growing, so too should the dividend. Over time, assuming the company remains healthy, the share price should also rise.

Source: Globe and Mail

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