∙ Make every investment in the stock market a long-term investment.
My Mother worked as a teller in a small bank in Dover, New Jersey. The name of the bank was called The Dover Community Bank. While working at the bank (she eventually became a branch manager) she enrolled in the bank's dividend reinvestment plan, making purchases of the stock through pay-roll deductions. She continued purchasing the stock through the years, having the dividends from her shares in the bank reinvested into more shares every quarter. By the time she left the bank (in the early seventies) she had accumulated around 300 shares of The Dover Community Bank.
My Father, when he retired, had the dividends from those shares sent home ? to help ends-meet. When my Dad passed away at age 80, my brother and I inherited over 7,600 shares of The Bank of New York, all originating from those 300 shares of what was once called The Dover Community Bank.
From this personal experience grew an investment philosophy that all stock market investments in a security should be purchased with the intent of providing dividend income to help ends-meet during retirement, with the understanding that no one can successfully retire without financial freedom. So every investment now in a security is purchased with the intent of holding that security (and adding to it during the years) until the dividend income from that security is ample enough to ease the loss of income from retiring from my job.
∙ Make every investment in the stock market provide you with an ever-increasing cash dividend for the rest of your life.
With the philosophical investment approach of holding a security position forever, what criteria should I be looking for in that security? Certainly dividend income ? that's a given! And since I never intend to sell the security, capital gains may not even be an issue.
I would argue that a company that just pays a dividend isn't good enough. Instead, I will only purchase those companies that have a long history of raising their dividend every year. This will eliminate a whole bunch of risk. It would eliminate the possibility that the company is 'cooking their books;' after all, the money has to be there to pay the shareholder. And because this company has been raising their dividend every year for many years, it eliminates the risk of investing in a start-up company that may not even be around in a year or so.
Also, the rising dividend every year would help off-set the risk of inflation and the risk of a lower stock price during the year would actually accelerate my income from the security.
Since I would want my position in the stock to grow through the years, thus increasing my dividend income, all dividends would be reinvested back into the stock, until retirement. A lower stock price during the year, therefore, would allow the dividend from the company to purchase more shares, at a higher dividend yield, and would simply accelerate my dividend income.
∙ Diversify into no more than twelve different companies.
Owning shares in twelve companies is plenty. It would provide the diversity to sleep well at night, and provide a cash dividend every week of the year. Start by owning three companies, and build from there. Determine how many shares you want of each company before moving on to the 4th, 5th, and 6th. Invest in sets of three different companies at a time, until twelve are owned.
∙ Persevere
Success in the stock market is not so much derived by buying a company's stock at the lows, but is almost guaranteed successful through dollar-cost-averaging over the years. One of the most powerful methods of investing in the stock market is having the perseverance to continue adding shares to your stock positions over the years, through reinvested dividends and quarterly infusion of funds, be it 50 dollars, or 100 dollars a month. Persistence, persistence, persistence, and your stock market investment philosophy will become unbeatable!
To read the PREFACE from the book 'The Stockopoly Plan- Investing for Retirement' visit: http://www.thestockopolyplan.com
Charles M. O'Melia is an individual investor with almost 40 years of experience and passion for the stock market. The author of the book The Stockopoly Plan ? Investing for Retirement; published by American-Book Publishing. You can invest in the book at: http://www.thestockopolyplan.com
You have permission to publish this article either electronically or in print, free of charge, as long as the author bylines are included. A courtesy copy of your publication would be appreciated. Please email to mailto:charles@thestockopolyplan.com
one time home cleaning Highland Park ..If you haven't heard of the technical indicator with the... Read More
On Monday, November 25, 2000 Investor's Business Daily listed on... Read More
It is finally catching up with them. The brokerage companies... Read More
One Saturday morning, while he was sitting at his computer... Read More
One of the basic laws of physics states that a... Read More
In 1960 an engineer working for a watch company in... Read More
For weeks, no, months we have been bombarded with nothing... Read More
What a great statement!I just heard someone use it in... Read More
As an investor you will want to check out any... Read More
One of the greatest challenges of investing in stocks is... Read More
There is nothing more exciting than finding an undervalued stock... Read More
During our travel down life's path we come to many... Read More
It depends on your level of understanding of the market... Read More
Suppose your position has made a big move and you... Read More
The trading method you employ to approach the stock market... Read More
This is a rather simple strategy with which I am... Read More
This is an extract of an article which was first... Read More
The gleam and bright lights of Wall Street lure in... Read More
With the stock market stubbornly refusing to settle down and... Read More
I have watched my cat play with a bag of... Read More
Is really not as important as to how you invest... Read More
After the publication of the first part of this two... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
A colleague of mine just returned from a scuba diving... Read More
licensed cleaning services Park Ridge ..Most people think the stock market is a zero sum... Read More
Outlined below are some of the advantages and disadvantages of... Read More
We all know that emotions control every decision that an... Read More
Trading is a fascinating activity.There are so many layers to... Read More
For weeks, no, months we have been bombarded with nothing... Read More
Has your broker been calling you recently with the "great... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
It is finally catching up with them. The brokerage companies... Read More
One of the most believed bits of conventional wisdom from... Read More
What are you thinking when it comes to your no... Read More
Four blind men were asked to give a description of... Read More
Investors who exclusively use broadly diversified, no load mutual funds... Read More
The stock market is very unstable at this time going... Read More
In November of 2000 when the NASDAQ was trading at... Read More
Having lived aboard a sailboat for 2 years I was... Read More
After finding the price of a particular stock, usually the... Read More
"Buy and hold" is one of the most heralded investment... Read More
I love roller coasters. The steeper the better. High and... Read More
Sometime in the third quarter of 1997, someone told me... Read More
Options trading can increase the profits you make when trading... Read More
If you have been dealing with mutual funds for any... Read More
It depends on your level of understanding of the market... Read More
The Shadow knows. There used to be a radio program... Read More
Every day on CNBC-TV they show a 200-day moving average... Read More
The demand for world oil is increasing while world reserves... Read More
Stocks & Mutual Fund |