GenExDividendInvestor: Dividends and a Long-Term Mindset Help You Win!
The start of a new year tends to lead to resolutions. But resolve without a plan will likely fail. That’s why when it comes to investing, most of your assets should be invested in a plan. In particular, it should play to the market’s long-term tendency to rally.
And it should offer growing cash flows as well. That’s the power of investing with dividend growth companies over time. It still leaves you with capital for riskier investments as well.
Stocks endured a 20 percent bear market in 2022, then rallied over 20 percent in 2023 to reverse that loss. Over longer rolling periods, it becomes mathematically unlikely to lose money invested in the stock market.
Dividend-paying stocks continue to deliver cash to investors, even during bear markets. And dividends tend to have lower beta, or volatility. Over time, less volatility can lead to better returns, especially from reinvested dividends.
Of course, any single company can fall on hard times. Even fail. That’s why owning a portfolio of diversified companies across a number of sectors matters. Investors who do so with a dividend approach can even use payouts to build new positions over time.
While investors tend to be focused on the market’s returns in a year, a month, or a week, a longer-term approach can lead to great returns over time.