Thursday, August 2, 2012
The Secret to Successful Dividend Investing
There are many lessons in investing that seem counterintuitive at first, only to become glaringly obvious in hindsight. While successful investors grasp this and go on to build fortunes, others don't, and thus miss out on the opportunity to live beyond their previously imagined means. One such lesson concerns dividend stocks.
By now, it's common knowledge that dividend stocks generally beat their nondividend-paying brethren over the long term. My colleague Morgan Housel offered proof of this by showing that a $1,000 investment in the 10 S&P 500 companies with the highest dividend yields in 1957 would have been worth $1.3 million by 2006. Over the same time period, meanwhile, the same investment in the index overall would have amounted to only $176,000. READ MORE