By Don Schreiber
The secure, ecocnomic replacement to a wasting guess whereas many folks have been studying the demanding means buy-and-hope procedure is certain to fail, Don Schreiber, Jr., and Gary E. Stroik have been busy updating All approximately Dividend Investing--the confirmed solution to a hugely unsuitable, completely superseded, yet all-too-common making an investment process. This back-to-basics ebook argues that dividend-paying shares, no longer progress shares, shape the easiest beginning for any portfolio. Used strategically, dividends are your most sensible wager for secure, ecocnomic making an investment. Why? 3 basic evidence: Dividends are low hazard. Dividends paintings in bull markets. Dividends paintings in endure markets. no matter if you are a veteran investor or a newbie, All approximately Dividend making an investment, moment variation, presents the proof you wish approximately: Tax merits of dividend-paying shares Dividend ratios and different key inventory details Dividend portfolio layout coping with possibility and holding earnings Dividend-based mutual cash and ETFs present ancient analyses of marketplace cycles
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Extra info for All About Dividend Investing, Second Edition (All About Series)
This inverse relationship between dividend yield and price was particularly evident during the huge bull market run from 1982 to 1999. Companies increased dividends steadily over the period, actually increasing dividends paid by almost 400 percent. Yet the dividend yield collapsed to historic lows because stock prices increased by 1,500 percent. Occasionally, some companies do run into trouble and cut or omit their dividend payments, but this is the exception rather than the rule. The typical dividend-paying company not only maintains the dividend payout it establishes but follows a policy of steadily increasing its dividend as earnings increase, as we will shortly see.
If you had invested $100,000 in the DJIA during the great bull market from 1982 through 1999, the value of your original shares would have grown to $1,302,760 as a result of price appreciation, but with dividends reinvested, the value would have been increased by an additional $753,348 to $2,056,109. 8 DJIA Dividends Reinvested Summary, 2000–2009 Initial Investment 1/1/2000 Value of Initial Shares (Price Appreciation Only) Value of Additional Shares from Dividends Total Value of Shares with Dividend Reinvested* Total Value of Dividends Reinvested* $100,000 $90,701 $23,267 $113,968 $23,008 *Assumes dividends reinvested Investors experienced the powerful benefits of dividends once again from 2000–2009 when the markets reverted to a negative price appreciation cycle.
The greater fool theory was in full swing; if you bought an overpriced stock, so what, someone would likely pay you an even higher price for it tomorrow! Unfortunately, times are never different, and investors paid a huge price for abandoning well-reasoned investment disciplines for the emotional decisions that abound during market mania. In this case, the experts had figured Y2K wrong. The looming disaster wasn’t about computers at all. The year 2000 will always be remembered as the beginning of the second worst bear market period in history.