What’s the best way to grow your income?
Dividends of course.
If you wondering why this is the most popular source of income when investing in stocks, allow me to give you a bit of a history lesson.
And, you’ll soon see why you should add some dividend paying stocks to your portfolio!
Let’s get started with a little history lesson…
As you know, the Great Depression wiped out millions of investors and ordinary people’s hard-earned money.
Many shares fell 90% or more… And many simply disappeared. The vast majority of investors gave up on stocks altogether and flocked to the safety of bonds and treasuries – vowing never to look at another stock.
This bear market lasted 25 long years – a quarter of a century. It was the longest ‘dry spell’ between peak prices the global markets ever experienced.
And yet…
When markets finally returned to their pre-crash peak in November 1954, something remarkable was discovered…
Income investors – those who focused on owning dividend paying stocks in their portfolio – made more than double the investors who took refuge in the ‘safety’ of bonds and treasury bills during the great depression.
Income Investors, grew $1,000 to $4,440, while bond Investors $1,000 investment only returned $2,350.
Now the interesting thing is you can see a similar trend over the past 30 years or so…
The graph above compiled by Goldman Sachs, shows companies who paid consistent dividends to shareholders were the biggest winners.
The thing is…
The power of dividend investing is not just a global phenomenon – it’s local too.
You’ll be surprised when I show you the returns dividend stocks have generated on the JSE.
A study of dividends and returns on shares on the JSE since 1967 shows dividends account for 46.9% of the total returns investors make on the market.
The best time to own dividend stocks…. is now!
The fact is, a consistent dividend can be responsible for as much as 20%, 30% even 50% of the returns you make on a stock.
So, in tough times investors tend to hold on to these shares, and sell the non-dividend payers.
This makes dividend payers less volatile – and often increases demand for them even when the market is doing badly.
Right now, there are many quality companies sitting on inflation-beating yields, paying consistent dividends and generating profits.
You just need to find and invest in the right ones. That’s where I can help…
One of my special reports every new Real Wealth subscriber receives is my top five dividend stocks on the JSE. Just click on the link and you can discover how you can claim a free copy.
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