How Much Can You Make In Three Years From Just One Dividend Stock?

If you buy stocks for capital gains, it is a difficult market in which to invest and earn acceptable returns. If you purchase today’s hot stock, it’s very likely to crash tomorrow. The winners of 2020 are falling in 2021. And despite the big daily gains you see on the financial news and tremendous price volatility, the overall market has not done very well over the first two-and-a-half months of 2021. As I write this, the SPDR S&P 500 Trust ETF (SPY) is up just 4.2% year to date.

To illustrate the differences, my list of Dividend Hunter recommended preferred stocks (boring, stable investments) has returned 50% more than SPY. The other high-yield Dividend Hunter investments have gained almost 20% so far this year.

While stock market gains are nice, and it’s great when my Dividend Hunter recommendations outpace the broad stock market indexes, my focus is on income. Dividends get paid no matter whether the stock market is gaining or losing.

You can also generate very attractive growth with a dividend-focused investment strategy. Reinvesting dividends from high-yield securities will grow both the number of shares you own and, more importantly, increase your income. If you sock away some money in high-yield investments, put the dividends on automatic reinvest, and let the power of compounding work for a few years, you will be delighted with the results.

Compound dividend growth gives you a much more predictable strategy than trying to time the stock market. With dividend reinvestment, when share prices drop, your income grows even faster. What a deal!

Let’s look at a hypothetical example that closely resembles recommended Dividend Hunter investments.

You invest $25,000 into 1,000 shares of a high-yield stock priced at $25.00 per share. The investment yields 10%, with monthly dividends. A little math shows the dividend rate at $0.21 per share per month.

You buy the 1,000 shares and put the dividends on automatic reinvest, purchasing a few more shares every month, with each monthly dividend payment getting larger because you own more shares than you did the previous month.

1 2
View single page >> |

...Like the ones on my Dividend Hunter recommendations list.

Disclaimer: The information contained in this article is neither an offer nor a recommendation to buy or sell any security, ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.