The Dividend Investor

The Dividend Investor

There are two major reasons for investing: to produce income and to store wealth for some time in the future.

It is very important to recognise the remarkable power of dividends. Newspapers feed the public with daily doses of how share prices rise and fall, often commenting on how billions have been added to or wiped off the stock market or how shares in some company or another have gained millions in a single day because of one item of good news.

It is easy to be seduced by these dazzling figures that foster the notion that the stock market is all about making a fast buck in a gambler’s paradise, especially in a bull market when all eyes are on rising shares prices.

In fact, the real money is made through solid investments that pay regular, rising dividends. The greater part of total returns for share investors over time will come from dividends, not capital gains. And when markets are falling, your only gains are likely to come from dividends.
So unless you are a very short term trader, you should be investing for dividends as part of any strategy for capital growth. Companies paying gradually improving dividends are the ones that will see their share price rise over time and the income from dividends will help to offset any capital losses you may suffer.

Even short term investors should consider running a separate long-term investment portfolio as a back up. Therefore almost every investor should be a dividend investor.

Read full details about The Dividend Investor on the Harriman House website at: