Dividends4Life: Tried-And-True Advice About Dividend Stocks

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Tried-And-True Advice About Dividend Stocks

Posted by D4L | Saturday, December 13, 2014 | | 0 comments »

The dividend stock, the old faithful of the equity investment world, might seem a little bland at first. After all, dividend-generating companies tend to be older and less volatile than exciting high-growth companies. Nonetheless, consider this bit of wisdom from legendary investor John Bogle: ”If you invested $10,000 in the S&P 500 Index when it was first created in 1926, you would have had $33.1 million dollars by September 2007 — but only if you’d reinvested all your dividends. If you didn’t reinvest them, your portfolio would have been worth only $1.2 million.”

Even if you only started investing in the S&P 500 in 1990, the benefits of dividends are pretty clear. The graph below shows the difference between the S&P 500 with reinvested dividends (the orange line), and the S&P 500 without those reinvested dividends between 1990 and today. The margin is pretty wide!

Source: InvestorPlace

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