Dividends4Life: How to Buy Stocks That Will Make You Rich

How to Buy Stocks That Will Make You Rich

Posted by D4L | Monday, July 07, 2014 | | 0 comments »

Having an income stream from your investments is nice, but creating real wealth requires that income stream to grow over time. Past performance is not a perfect indicator of how a stock will behave in the future, but history has shown that stocks with regularly rising dividends tend to continue that trend. You can find many such stocks on Dividend.com, which maintains lists of all publicly traded stocks that have raised their dividends for at least 10 years in a row -- or even 25 years.

Before you buy a stock for the long run, check to see how it performs during the bad years. One of the best practitioners of this is Warren Buffett. Buffett freely admits to his shareholders that he's unlikely to beat the market in years when the S&P jumps higher. In fact, Berkshire Hathaway has underperformed the S&P in four out of the last five years as the market has soared from the 2009 lows. However, consider 2008, when much of the market was in free fall. The S&P 500 lost 37% of its value that year. And while Berkshire didn’t have its best year on record, it did manage to beat the market.

Source: Motley Fool

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