How to create wealth in
stock marketFirst and foremost, an opportunistic strategy for creating wealth in stock market is needed. And opportunistic strategy for creating wealth in stock market must have two ingredients, a plan and a goal. The plan must be a definite, concrete plan of investing that would profit you and your family for rest of your lives.
This opportunistic investment plan you begin should not profit anyone else – not a stockbroker, a mutual fund or a financial advisor. This means you have to have confidence in yourself and in your own judgment as to whether investment plan you begin has merit. And this means that investment plan would and should have already been proven to you!
This definite, concrete plan you begin for creating wealth through opportunities in stock market must also have a goal. The goal should be clear and specific, and once your have made up your mind to achieve that goal, then go forward and make that goal a reality.
What are opportunistic traits of a strategic investment plan built on concrete that would actually allow shareholder to profit through all turmoil of an up and down stock market? The secret for creating wealth in stock market; no matter what direction market is heading?
As in what appears to be most difficult investment question of all to answer, answer lies in simplicity itself – investing in those companies that have a historical record of raising their dividend every year. Whether or not you can take this statement of fact to heart is your own judgment call. But it is this opportunistic trait that can and will create wealth for you and your family for rest of your lives.
A company’s ability to raise its dividend every year, coupled with stock appreciation is a very powerful wealth creating formula!
I’m going to provide you with two examples, though there are many more, some with even better results. The two examples are from my book, soon to be published by American Book Publishing – The Stockopoly Plan (where an investment plan and a goal are written in stone).
The first example would be a stock purchased in 1990, Comerica (CMA). What led to purchase of CMA? – In 1990 CMA had a 21 year history of raising their dividend every year. Today’s CMA has a 35 year history of raising their dividend every year. This opportunistic trait in CMA stock has garnished a little better than a 15 percent return a year, compounded annually (just by having dividends reinvested back into stock each quarter through those years – I prove this to you in The Stockopoly Plan), for past 14 plus years. Today’s CMA stock just recently touched a new high at $60 dollars a share, with a dividend yield of around 3˝ percent. In April of 2003 stock was selling around $37.50 a share, paying a dividend yield of around 5% a year. Am I tempted to sell my position in CMA? Do I care if stock drops from this lofty price back to $37 a share? Why should I? If stock drops back to $37 a share, my dividends being reinvested back into stock each quarter purchases more shares, and my dividend income from CMA simply and dramatically accelerates. I am also already prepared that if a buy-out offer is ever made for company to reap profits of owning stock (as well as possibility of another stock split).
