A Reliable Wealth-Building Dividend Strategy

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A Reliable Wealth-Building Dividend Strategy

Some seemingly smart people are calling for a collapse of the dollar... and the markets with it. Others are saying to ride the cycles... And still others say to fully commit as we are on the cusp of a historic bull market.

It's hard to be rational in such an irrational environment. It's not surprising that people are pulling out of the market. Yet, waiting on the sideline is rarely a worthwhile option.

An investor's objective is to find a way to reliably compound wealth over the long term, which is not as difficult as it might seem.

Dividends are credited with contributing nearly a third of total equity returns since 1926. What's more, they account for nearly half (46%) of the total return for the S&P 500 Index between 1989 and 2014.

With this in mind, it should come as no surprise that investing in America's finest dividend-paying companies and sticking with them has provided inflation-beating returns over the long term.

To confront the concerns about entering a volatile market at what might turn out to be the wrong time, you might utilize a strategy of dollar-cost averaging into a diversified group of high-quality, dividend-paying companies. An easy way--and probably the best way--to implement this strategy would be to invest directly through company-sponsored dividend reinvestment plans (DRIPs).

DRIPs allow you to make (or set up a schedule for) dollar amount investments that go directly into your own account at the company transfer agent. Dividends can be automatically applied to that account to purchase additional shares. Shares are purchased on the next scheduled investment date.

Everyone using DRIPs to accumulate shares through dollar-cost averaging can appreciate the joy of watching their share count grow over time.

An Ex-Dividend Strategy can enhance the effects of compounding wealth. To learn more click here