You have permission to this article either electronically or in print as long as
author bylines are included, with a live link and article is not changed in any way (typos excluded). Please provide a courtesy e-mail to charles@thestockopolyplan.com telling where article was published. (Word Count 1000) Good Stock Market Tip, Good Reward!
Forget making a profit; instead focus on income provided from your stock portfolio. That’s right! Forget making a profit. The burden is now lifted - no more pressure on making a buck in stock market. (Instead of trying to bend spoon, that is impossible, instead just think of spoon as – omigosh! - I’m in Matrix!) When you focus on amount of money your holdings are providing in dividends – and when those companies selected have a history of raising their dividends each year – a lower stock price allows dividends that are being rolled back into stock to accelerate your income. The total value of your portfolio may go lower, but your income from that lower priced portfolio would increase dramatically. Profit by income!
To demonstrate this tip, I’m going to take you back in time, but strategy of that time is just as viable today, as it was in past. The year is 1990, stock for demonstration is Comerica, and amount of money invested was $3,333.34. Comerica (CMA) was selected for one simple reason – in 1990 CMA had a historical record of raising their dividend for past 21 years. Today’s CMA has a 36 year history of raising their dividend every year.
In January 1990 Comerica was selling at $48.38 a share, paid a quarterly dividend of 65 cents a share, with a dividend yield of 5.37% (.65 divided by 48.38 x 4 x 100 = 5.37%). The result of just holding this stock through years, never taking a profit, and simply having dividends reinvested each quarter (commission-free) back into stock is chronicled below: These are actual returns based on closing prices of stock on company’s dividend payout date (the date a company purchases their stock on open market for investors enrolled in their stock dividend reinvestment plan; The figures were taken from research I did, and is from an excerpt from my book The Stockopoly Plan – Investing for Retirement.)
Comerica: (with dividend each quarter rolled back into stock) $3,333.34 into CMA in January, 1990 at $48.38 a share: Shares purchased, 68.90 shares.
Total Amount of shares at end of 1990: 72.92 shares.
Total Amount of shares at end of 1991: 115.01 shares.
Total Amount of shares at end of 1992: 118.85 shares.
Total Amount of shares at end of 1993: 245.78 shares.
Total Amount of shares at end of 1994: 256.96 shares.
Total Amount of shares at end of 1995: 268.78 shares.
Total Amount of shares at end of 1996: 277.83 shares.
Total Amount of shares at end of 1997: 285.32 shares.
Total Amount of shares at end of 1998: 436.65 shares.
