Most stock market investors will do a combination of three things: manage some of your own money, have someone else manage some of your money; and use indexes. Depending on your results, you will be either happy or make adjustments. If you go into a company which manages money often times there will be a chart on the wall which shows over the years, the stock market is a good investment as the chart rises. The question for you is why? The answer is very simple – the index changes every 6 months and discards the losers and adds new winners. If the losers make money again, they can come back in. At this point in time, there are many index funds to choose from. A starting point would be the S&P 500 Dividend Aristocrat fund. This fund is composed of companies in the S&P 500 whose companies with 25 consecutive years of dividend increases. In David Milstead’s  column of Hobnobbing with Dividend Aristocrats he explains how the fund works. He also recommends looking at the S&P High Yield Dividend Aristocrats fund which is from the S&P Composite 1500 companies which have increased their dividends for 20 years in a row. The companies joining the 20 year list are: Donaldson Co (filtration and auto parts); IBM; Lancaster Colony (food company); Lincoln Electric Holdings (welding supplies); New Jersey Resources (gas company); NextEra Energy; Polaris Industries (snowmobiles); RenaissanceRe Holdings (reinsurance) and RLI (insurance).

Linking to dividend paying stocks- it is easier to find good stable companies with a good return and low risk to owning and the S&P Aristocrat funds help make it easy. These are companies that are doing well and have paid dividends for over 20 years. It is relatively easy to see what companies are on the list and that will give you ideas where to put your money. If a company pays dividends it has to be profitable and if it has been paying dividends for over 20 years, in your research you can see how it is able to retain market share and increase prices over the years. If they can still do it, it is worth buying either through your shares or through the index.

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