All About Dividend Investing
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| Author(s) | , |
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| Format |
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| Pages |
257 |
| Published Date |
2011 |
All About Dividend Investing takes a clear-eyed look at this new environment, then provides a comprehensive, step-by-step dividend-investing approach designed to reduce short-term risk while maximizing long-term growth. This timely book introduces popular methods for screening dividend-paying companies, explains how the new tax laws will affect corporate policy and investor behavior, and more.
Introduction:
The only constant in investing is dividends. It is dividends that give you superior performance in both good and bad markets. It was dividend stocks that investors moved into after the 1929 crash—during the 1940s, 1950s, and 1960s—because of the return that dividends provided. In the last few years, investors have again rediscovered the benefits of dividend stocks. Yes, the only constant in investing is dividends.
The world of investing has changed dramatically, as conventional passive growth stock approaches have failed investors. If they followed the buy-and-hold mantra and stayed the course from 2000 through 2009, investors booked losses of as much as 44 percent instead of gains. The once high-flying NASDAQ growth stock index devastated investors with losses of 44.50 percent over that 10-year period. According to conventional theory, market returns will always bail you out, so investors should not worry about short-term losses. But in reality, this loss of capital makes it difficult for investors to fund their retirement sufficiently and might cause them to outlive their stream of income. Now is the time for investors to back away from conventional approaches they have been taught. Why? Simply because they do not work!
In 2008, investors found that traditional approaches failed them. Portfolio management strategies that were considered sound faltered. The markets defied the tenets of modern portfolio theory, seeing asset classes fall—and fall hard—across the board. Conventional portfolio construction theory has traditionally put forth the notion that asset diversification reduces risk sufficiently to allow investors to buy and hold. Unfortunately, this theory and actual investor experience seem diametrically opposed, suggesting the assumption is fundamentally flawed. To meet the “acid test,” investment approaches must work in both good and bad market cycles. Today more than ever, investors need to pay attention to the evidence indicating that dividend-paying stocks, not growth stocks, should be the foundation on which portfolios are built.
Times and tax laws may change, but fundamentals never change. The fundamentals of investing are
- Dividends can lower risk.
- Dividends can help investors enhance returns when markets are favorable.
- Dividends give investors the ability to achieve positive results even when markets are unfavorable.
Contents:
- The Compelling Evidence for Dividend Investing
- Dividends 101: A Basic Primer
- New Advantages of Dividend Investing
- Head Start for Income Investors
- Advantages for Growth Investors
- Why Conventional Approaches Fail Investors
- Doing Your Homework
- Filling Your Toolbox
- Laying the Foundation
- Building Your Portfolio
- Safeguard Your Capital
- DRIPs, Folios, Mutual Funds, and ETFs
- Staying on Course
All About Dividend Investing By Don Schreiber, Gary Stroik pdf
6 reviews for All About Dividend Investing
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Bethany Weeks (verified owner) –
This is a very good book, full of pratical advices. It is easy to read and understand. It’s useful for planning a rational investment strategy. Recommended!
Demetrius Melendez (verified owner) –
Great reading for the average investor who directs his/her’s own investments and wants a solid foundation about dividends and how they work for you over time.
Jenesis Chavez (verified owner) –
I have been a big fan of dividend investing for years. Generally its not exciting but its dependable. Its often the only money you get to see in a share for a long time.
A plus is as the writer states is the market goes down the shares rarely drop that much as it reaches a point where people will buy it just for the dividend rate.
Having made this one observation, a few times in his book, you will find that if you know something about shares then there is little new or orginal here.
By the way the negative about dividend investing is what this writer does not tell you is if the company has a bad year and cuts its dividend, then the price can drop dramatically. So you still can get burnt badly.
Ian Lawrence (verified owner) –
Don Schreiber makes a strong and persuasive argument for why any savvy investor needs to give attention to dividend investing. This book showed me exactly how I can be a savvier investor. Now I have a better grasp of the tax consequences and impact of inflation on my investments and how stocks with excellent dividends can shield me. This is an excellent primer for investors at every level.
Lauren Mays (verified owner) –
This recent entry in the “All About…” investment series covers a lot of territory, but many of its most useful points are made in the first few pages. Dividend paying stocks should be in your portfolio because their cash flow provides steady income with less price volatility in up and down markets. Dividends offer the possibility of positive returns during extended periods when there is little or no price appreciation in the equity markets. In fact, the authors believe that we are in for a “fairly long stretch” of disappointing returns based on their reading of bull and bear market cycle history. Retiring baby boomers looking to squeeze more income from their financial assets will want dividend producing stocks – another reason to own them ahead of their demographic buying wave. Recent tax law changes that include a low maximum 15% rate for most common stock dividends have also made these investments more attractive.
Much of what follows will be of interest to the Do It Yourself portfolio builder. The authors provide advice on analyzing a company’s financial ratios to determine the sustainability of a company’s dividend and their ability to raise it in the future. Investors are advised how to diversify their portfolio and suitable criteria for screening their holdings. Managing the portfolio with an automatic stop-loss sell discipline to preserve capital in declining markets is a much discussed and infrequently used strategy. Here it gets close attention. My sense of this book is that readers will pick and choose ideas and pieces of their strategy rather than try to follow their methodology step by step. Chapter 11 on DRIPS, Folios, and Mutual Funds and the final Chapter 12 can be skipped.
Anders Bean (verified owner) –
If you’re fairly new to investing and have gone beyond mutual funds and dipped your toes into a pool of stocks, you’re probably like most new investors… you picked a few growth stocks because those are the stocks that are exciting and sexy. I always wondered what a “Value” stock was and why anyone except our elder citizens would want dividend stocks in boring industries like utilities.
This book will help open that world to you and give you some basic tools to start with in picking valuable, dividend producing stocks. It has actually made it exciting for me to search, pick, and buy those boring stocks!
I’m still young and new to investing, and I found this book, and a few other “All About” books, to be my favorite. They’re technical enough without being too technical. And broad enough to give you a general view from which you can then dig deeper.