{"id":31034,"date":"2012-07-23T07:24:40","date_gmt":"2012-07-23T11:24:40","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/07\/the-shocking-math-behind-dividend-growth-investing\/"},"modified":"2012-07-23T07:24:40","modified_gmt":"2012-07-23T11:24:40","slug":"the-shocking-math-behind-dividend-growth-investing","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/23\/the-shocking-math-behind-dividend-growth-investing\/","title":{"rendered":"The Shocking Math Behind Dividend Growth Investing"},"content":{"rendered":"<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n<p>Monday morning, I was interviewed by <em>The South Florida Sun Sentinel<\/em> about my book, <em><a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/www.amazon.com\/Get-Rich-Dividends-Earning-Double-Digit\/dp\/1118217810\/ref=nosim\/?tag=wwwinvestme00-20\">Get Rich with Dividends<\/a><\/em>. (Have I mentioned I have a new book?) The first question the reporter asked me was, \u201cWhat do you say to investors who are nervous about the market?\u201d<\/p>\n<p>Then, a few hours later in a marketing meeting for <em>Investment U<\/em>, someone posed the question, \u201cHow do we market to investors who are nervous?\u201d<\/p>\n<p>And investors <em>are<\/em> scared. Their fears are completely valid:<\/p>\n<ul>\n<li>The Euro seems to be falling apart at the seams.<\/li>\n<li>Our elected officials in Washington (and many states) are the most incompetent and ineffective in generations.<\/li>\n<li>There seems to be a new financial scandal every few weeks.<\/li>\n<li>No matter who wins the election in November, half the population is going to be very upset.<\/li>\n<\/ul>\n<p>The list goes on\u2026<\/p>\n<p>In the financial publishing business, it\u2019s known that it\u2019s easy to market yourself if you\u2019re bearish. Fear has, and always will be, a powerful motivating factor. And there\u2019s always a logical reason to be bearish. Stocks are overvalued, earnings are weak, the economy is weakening, investors are too complacent, etc. It\u2019s a lot tougher to argue that investors should be in stocks.<\/p>\n<p>But there\u2019s one key reason why they should.<\/p>\n<p>Long-term investors almost always win.<\/p>\n<p>Last week, I told you that over 10-year periods, stocks have made money 91% of the time.<\/p>\n<p>Since 1937, stocks finished positive in 67 out of 74 10-year periods. The average gain has been 129% over 10 years.<\/p>\n<p>The seven negative 10-year periods were all tied to the Great Depression and Recession. And not all 10-year periods that included the Depression and Recession were negative. Only seven of them.<\/p>\n<p>So based on history, it would take a catastrophic economic collapse to <em>not<\/em> make money in the stock market over the next 10 years.<\/p>\n<h2>How to Make Money Despite the Bad News<\/h2>\n<p>So how do you make money in the face of the euro, Obomney and Iran?<\/p>\n<p>You invest in great companies that pay and raise the dividend every year and then you go about your life. That\u2019s it.<\/p>\n<p>You check in with those companies from time to time to make sure the dividend is safe and continuing to be raised and then you get back to what you were doing, i.e. your job, your family, Civil War re-enactments\u2026<\/p>\n<p>The beauty of investing in Perpetual Dividend Raisers \u2013 stocks that raise the dividend every year \u2013 is that they tend to continue to raise the dividend no matter what\u2019s happening in the White House or around the globe.<\/p>\n<p>If a company has been raising its dividend for 25 years, like <strong>Mercury General<\/strong> (NYSE: MCY) has, chances are it\u2019s going to raise it for a twenty-sixth year. If they don\u2019t, investors are going to be furious, as they\u2019ve come to expect a dividend hike every year.<\/p>\n<p>A company that doesn\u2019t raise the dividend after 25 years in a row of dividend growth will find its stock in a steep sell-off and its executives getting their resumes together after being thrown out by shareholders.<\/p>\n<p>Those executives are going to do everything in their power to ensure they can continue to raise the dividend year after year.<\/p>\n<p>There are few sure things in life and past performance is no guarantee of future results, but chances are that a company that has lifted its dividend every year for a couple of decades is going to do it again this year, and next year, and the year after that, and that year after that\u2026<\/p>\n<p>Investing in Perpetual Dividend Raisers allows you to outpace inflation, earn more income every year and, if you\u2019re reinvesting your dividends, compound those dividends to the point where you can easily make 12% per year in conservative blue-chip stocks.<\/p>\n<p>At 12% per year, you more than triple your money in 10 years. Considering we\u2019re emerging from the \u201clost decade,\u201d I bet you would have been very happy tripling your nest egg while most people barely saw any return over 10 years, if they made any money at all.<\/p>\n<p>Investing in dividend-paying companies is easy, it\u2019s conservative and best of all, it almost always works. Certainly more than any other investing strategy. If you can name another strategy with a better than 91% track record that can grow your money at 12% per year in conservative investments, I\u2019d like to know about it.<\/p>\n<p>There are valid reasons to be nervous. No one is saying you shouldn\u2019t be concerned about world and economic events. Just don\u2019t invest like you are. History is not on your side.<\/p>\n<p>Good Investing,<\/p>\n<p>Marc<\/p>\n<p><strong>P.S.<\/strong> Thank you for making <em><a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/www.amazon.com\/Get-Rich-Dividends-Earning-Double-Digit\/dp\/1118217810\/ref=nosim\/?tag=wwwinvestme00-20\">Get Rich with Dividends<\/a><\/em> a bestseller. It spent the past week as No. 1 in \u201cInvesting\u201d on Amazon and got as high as No. 14 in all books. It did so well Amazon actually ran out of copies. They\u2019ll have more next week. If you don\u2019t want to wait, you can download it for the <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/www.amazon.com\/Get-Rich-Dividends-Double-Digit-ebook\/dp\/B008847H3I\/ref=tmm_kin_title_0?ie=UTF8&amp;m=AG56TWVU5XWC2\/ref=nosim\/?tag=wwwinvestme00-20\">Kindle on Amazon<\/a> or you can order the book from <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/www.barnesandnoble.com\/w\/get-rich-with-dividends-marc-lichtenfeld\/1110786873?ean=9781118282342\">Barnes and Noble<\/a>.<\/p>\n<div>\n<a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=e04bcGlgo1E:fV8dAJS0tXE:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=e04bcGlgo1E:fV8dAJS0tXE:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=e04bcGlgo1E:fV8dAJS0tXE:V_sGLiPBpWU\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=e04bcGlgo1E:fV8dAJS0tXE:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=e04bcGlgo1E:fV8dAJS0tXE:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=e04bcGlgo1E:fV8dAJS0tXE:gIN9vFwOqvQ\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=e04bcGlgo1E:fV8dAJS0tXE:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=e04bcGlgo1E:fV8dAJS0tXE:F7zBnMyn0Lo\" border=\"0\" \/><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/e04bcGlgo1E\" height=\"1\" width=\"1\" \/><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/SyndicationFeed\/~4\/qWYwihvXkDI\" height=\"1\" width=\"1\" \/><\/p>\n<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Article by Investment U Monday morning, I was interviewed by The South Florida Sun Sentinel about my book, Get Rich with Dividends. (Have I mentioned I have a new book?) The first question the reporter asked me was, \u201cWhat do you say to investors who are nervous about the market?\u201d Then, a few hours later &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/23\/the-shocking-math-behind-dividend-growth-investing\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The Shocking Math Behind Dividend Growth Investing&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31034","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31034"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31034\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}