Dividend investing has taken the world by storm in the past few years, as investors have been looking for yield amid historically low interest rates. In this week’s digest, AAII staff cover strategies and analysis that investors should take into consideration when it comes to income investing with dividends.
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Tapping Into the Dividend Well: Reinvesting With DRIPs |
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By Matthew Bajkowski
Once a dividend has been paid out to investors, a greater question arises: What should you do with the extra cash? A disciplined solution to this question is to reinvest that money back into some kind of security, so that even more return is accrued and compounded from your initial investment. In the article, Tapping Into the Dividend Well: Reinvesting With DRIPs, AAII’s Matthew Bajkowski highlights ways for individual investors to take advantage of dividend reinvestment plans, or DRIPs, as well as some of the popular discount brokers that handle DRIPs for shareholders.
Some of the topics covered in the article include:
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Different options to access DRIP plans
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The benefits and drawbacks of utilizing DRIPs
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What broker DRIPs are available
Dividend reinvestment plans offer many advantages to the individual investor interested in maximizing returns from long-term growth. As the unique benefits of DRIPs have risen in prominence, the multitude of options for reinvestment programs have greatly expanded, making it easy to implement as part of almost any investment philosophy and strategy.
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Three Pillars for Successful Dividend Investing |
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By Derek J. Hageman
Since 1926, dividends have accounted for more than 40% of the return realized by investing in large-cap stocks. The frequently cited 9.9% historical annual return for stocks is significantly impacted by the payment of dividends. Ibbotson Associates, which tracks long-term historical returns, says that if dividends were taken out of the equation, the long-term annual return for stocks would fall to a more modest 5.5%. In the article Three Pillars for Successful Dividend Investing, AAII financial analyst Derek Hageman shares what factors to focus on when making dividend investing decisions.
Some of the highlights of the article include:
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Assessing growth trends of dividend-paying stocks
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How to tell if a dividend payment is sustainable
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The DI approach to valuation metrics
Well-chosen dividend stocks can provide not only good income levels today but also the potential for greater overall total returns as well. Whether you’re looking for opportunities that offer higher investment income than you can get in government bonds or for that overall total return potential, dividend-paying stocks may just be what you’re after.
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AAII e-book: Stock Investing Strategies |
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 One of the biggest difficulties for individuals interested in investing in stocks is getting started. This AAII e-book provides a general outline for analyzing stocks and walks through the process as it is practically applied to specific types of investment approaches. It first describes, in very broad terms, the basic process that is followed in fundamental analysis. It then discusses how the specific steps involved can be adapted and practically applied to an individual’s specific approach. Take the opportunity to sharpen your stock-picking skills with this AAII member benefit. More » |
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