By Chuck Carlson, DRIP Investor

While you may not realize it, spreading your investments across time is a form of diversification. In a nutshell, dollar-cost averaging says that you should make regular investments over time, regardless of whether the market is “high” or “low.”

Making regular investments assures that you will not invest all of your funds at market peaks, as well as guaranteeing you will buy during market low points.

This latter point can’t be overstated. Perhaps the biggest strength of dollar-cost averaging is that you will buy stocks when they offer their greatest value, but when you are the most likely to avoid them.

Long-term investment returns depend on taking advantage of buying opportunities. Yet buying low may be the hardest thing there is to do in an investment program. Dollar-cost averaging or some form of time diversification forces you to take advantage of those buying opportunities.

The easiest way to implement time diversification is to do what every DRIP investor should be doing — reinvesting dividends. Indeed, I believe dividend reinvestment is one of the most powerful investment forces available to individual investors.

Reinvesting dividends allows you to maximize the power of compounding. Reinvestment of dividends also allows you to automatically and, perhaps most importantly, unemotionally diversify across time by making regular investments in the market, especially during market declines.

Since most companies pay dividends every three months, DRIP investors who reinvest dividends are putting money into the market at a minimum on a quarterly basis.

But the power of time diversification is enhanced the more often you make investments. Thus, an even more powerful approach would be to have dividends reinvesting on a monthly basis.

The good news is that you can achieve monthly reinvestment by owning the right basket of stocks. We have divvied up recommended stocks by their dividend-payment dates.

By owning stocks from each group, investors would be reinvesting dividends every month of the year. What is also important to know is that by owning stocks from each group, you also have the ability to receive cash dividends every month.

This feature may come in handy as you enter a period of your life when you need monthly cash dividends to supplement your other forms of income. This portfolio would allow you to make that transition to monthly dividend income.

The stocks listed below are my favorites within each dividend-paying time period. Each is a quality holdings for any portfolio.

All of the stocks offer direct-purchase plans whereby investors may buy the first share and every share directly from the company, so it is easy to get started in building your “dividends (reinvested) every month” portfolio.

January, April, July October

CBS (CBS) -- yield 1.1%
Cisco Systems (CSCO) - yield 2.7%
FedEx (FDX) - yield 0.5%
J.P. Morgan Chase (JPM)
Macy's (M) - yield 2%
Medtronic (MDT) - yield 2.3%
Motorola Solutions (MSI) - yield 1.7%
PPL (PPL) - yield 4.8%
Valmont Industries (VMI) - yield 0.6%
Viacom (VIA) - yield 1.9%

February, May, August, November

American Express (AXP) - yield 1.3%
Bristol-Myers Squibb (BMY) - yield 3.8%
CVS Caremark (CVS) - yield 1.8%
IdaCorp (IDA) - yield 3.3%
Paychex (PAYX) - yield 4%
Procter & Gamble (PG) - yield 2.9%

March, June, September, December

Aflac (AFL) - yield 2.8%
America States Water (WTR) - yield 2.7%
Equifax (EFX) - yield 1.6%
Exxon Mobil (XOM) - yield 2.6%
NexEra (NEE) - yield 3.6%
PepsiCo (PEP) - yield 2.8%
Qualcomm (QCOM) - 1.5%
Walgreen (WAG) - yield 3.4%

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