Dividends and Non Losing Money

Whatever you invest your money in, the only rule that will guarantee you have more is not losing it. If you buy something and the value goes down, it will take twice as long to go back to even, then you have to risk even more for the time you were down. For the 99.9% of us without inside knowledge, we have to operate with the conditions of what investments will gain in the long term? For the most part, if you live in a good neighbourhood for an extended period, your house will increase.

If you invest in the stock markets, the only guarantee is dividends. Unless you are part of the .1%, you will not likely know which stock price will go up or down except for those that trade on a consistent basis do both. The big trick is to narrow the field, if you choose stocks that pays a dividend and over the years has increased the dividend, it is a reasonable assumption in the long term, the stock price will also rise. If you buy and hold the shares, due to the regular dividend payments, you will have more money. If the company decides to decrease dividend payments, you can exit it and buy a better company, but usually you would be aware of the drastic changes that affected the company. However, as long as the dividend is consistent and increasing, the stock is a hold. In a complex world, most of the time the solution is a simple one.

There are more questions than answers, till the next time – to raising questions

Leave a comment