Periodically, I will bookmark an article I don’t have time to read at that moment, then forget about it. Then later when I stumble across the bookmark, it is like finding lost treasure. Needless to say, this has just happened as I was looking for a site in my bookmarks and found an old link to How to Play Dividend Stocks in Today’s Market by Roger Conrad.
Here are a few interesting take-aways from the article:
- Income investing is, at its core, a long-term enterprise.
- Frequent buying and selling of dividend-paying investments can jack up your tax bill.
- A growing dividend is a strong sign of a company becoming more valuable. Companies that increase dividends tend to have rising share prices, but you only cash in if you buy and hold.
- If a company continues to post the right numbers, the best course is still to grit up and hang on, even if its share price has already taken a tumble. History shows that companies that weather down cycles as businesses will eventually recover in the share market, provided they keep up their good work.
- The point for income investors is we’re going to have to start looking at the inflation risk of what we own, just as we now look at credit risk.
- My philosophy of income investing is that diversification is paramount. If you’re going to buy and hold, you’re going to have to weather the ups and downs of the market.
- Holding only first-rate businesses does protect your dividend streams. And over time, it ensures you’ll also get steady price appreciation.
Overall, it was a very interesting read