Friday, August 2, 2013

Buy Stocks for Income

The problem with buying stocks for dividends is that at first you do not get much in the way of returns. Your yield would be between 1 and 5%. So if you save some $10,000 and buy some stock, you are looking at annual income of $100 to $500.

However, if you buy dividend growth companies, your dividends on the companies you own will growth over time. The lower the dividend yield, the higher the growth in dividends is likely to be. If you keep at buying dividend growth companies over a period of time, you should be able to build a portfolio that will be able to provide you with some income during the tough times.

I previously wrote an article on dividend yields on original investments. This talks about the tradeoff between dividend yields and dividend growth. The article is here. I have put it spreadsheet that goes with this article on my site.

On my other blog I am today writing about Wajax Corp (TSX-WJX, OTC-WJXFF)... continue...

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.

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