Dividend checks every month
By choosing stocks from different payment periods, you can collect dividends every month.
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%
More from TheStockAdvisors.com
It seems to me that many "investors" that have commented negatively on the dividend returns listed in this article haven't taken into consideration that each and every one of these stocks have had growth in the last six years. For most of them that would be an upward range of 35% to 50% and if you were investing in a DRIP over that entire period of time your would have compounded that return AND your initial investment dollars would be earning TWICE the listed dividend because these dividend are based on todays price. You also aren't paying a fund manager, broker, or any maintenance on your brokerage account. No cost to purchase and no cost to sell either. The point is to make continual purchases in your chosen stocks, purchasing in the ups and the downs - historically, you will do very well.......but diversity is always the key.
I don't disagree with putting some money in PSEC , for example - I own it too, but it's only 1% of my portfolio. You could have purchased WIN or FTR for the 12% dividend too and seen your value plummet 35% - you still get your dividend, for now, but you need it for 3 years just to break even...there is a reason that the dividend is high...the risk is also high and it's long term prospects, product value, or services, might be questionable. Should the value actually be there, then why pay a dividend that is so much more than the solid blue chip companies?? Answer: Because it is questionable as to how long they can produce profits, therein lies the risk. Think about it..."if it sounds to good to be true, it probably is"...heard that before??
A lot of interesting ideas and advice on here....Like it should be on a Financial Site or Blog.
If you could read stuff like this for about 5-10 years; You probably could do all your investing on your own.?
Stick/or use one of old Warren Buffet's rule...The "fear and greed thing"
Buy low sell high....Don't hang onto dogs forever, re-allocate and diversify..
Get advice from many places...And read until you understand.
And above all, try not to be afraid or break over new horizons...
The article is NOT ABOUT "high dividend" paying stocks...
It is about "Amortizing Dividend Payments" over a timeframe or period of time.(same)
So that an Investor may have a "free cash flow" for useful purposes or paying Monthly Bills.
"We all know" about higher paying dividend Stocks, Funds, REITs and MLPs, LPs..
It's not about that....Those Articles can be found elsewhere or previously..?
My point would be that not all Companies "pay on the same day in a Quarter" ie: 10th of Jan.
Or Quarters that are J-M, A-J, J-S and O-D. some use different "timeframes for fiscal Quarters."
And YES, many of those Companies pay a higher rate of distribution.
Qwerky, cute name...Thought it was QWERTY at first...Easy to type out.
Guess Pocket protector is rich...Don't really care.
Sounds like YOU are doing as good as any...
I hope I'm not being greedy, but I only buy stocks that pay 4% or more. That excludes a few I have owned forever, like KO, for example which pays less but is SUCH a good stock. There are so many good ones that pay more, why settle for less?
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