{"id":21484,"date":"2011-06-03T21:56:28","date_gmt":"2011-06-04T01:56:28","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=21484"},"modified":"2011-06-03T21:56:28","modified_gmt":"2011-06-04T01:56:28","slug":"your-most-important-investing-decision-of-the-next-10-years","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/06\/03\/your-most-important-investing-decision-of-the-next-10-years\/","title":{"rendered":"Your Most Important Investing Decision of the Next 10 Years"},"content":{"rendered":"

By Carla Pasternak, DividendOpportunities.com <\/a><\/strong><\/span><\/span><\/p>\n

Think of where you’d be right now if you’d \t\t\t\t\tmade this move ten years ago. The S&P 500 is up only 28% \t\t\t\t\tduring that time. You could have seen returns of 328%, 305%, \t\t\t\t\tor 626%.<\/span><\/p>\n

And that’s with some of the most boring companies you can \t\t\t\t\tthink of — housing REITs, pipeline operators, and cigarette \t\t\t\t\tmakers. But they all have one thing in common.<\/p>\n

They pay dividends.<\/p>\n

As the Chief Investment Strategist behind High-Yield Investing<\/em>, I’m biased. But I think \t\t\t\t\tdividends are the most powerful tool in investing. You don’t \t\t\t\t\thave to take my word for it. Other investors agree:<\/p>\n

 <\/p>\n\n\n\n
“I have made more money in retirement than I did \t\t\t\t\t\t\t\twhen I was working. Income from dividend-paying \t\t\t\t\t\t\t\tstocks (which I collect every month) is even \t\t\t\t\t\t\t\tbetter than my greatest expectations.<\/span> <\/p>\n

– High-Yield Investing<\/em> subscriber, \t\t\t\t\t\t\t\tWilliam B.<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Even John D. Rockefeller once quipped that \t\t\t\t\tthe only thing that gave him pleasure was to see his \t\t\t\t\tdividend coming in.<\/span><\/p>\n

The simple fact is that how you treat the dividend — often \t\t\t\t\tthe forgotten step-child among investors — is the most \t\t\t\t\timportant investing decision you’ll make today… in the \t\t\t\t\tnext year… even the next decade.<\/p>\n

Let me show you what I mean.<\/p>\n

Take two portfolios, each worth $100,000. The first one \t\t\t\t\tearns 8% in capital gains each year. The second one earns \t\t\t\t\thalf that amount in capital gains — only 4% each year — \t\t\t\t\tbut earns a 6% dividend that’s reinvested.<\/p>\n

\"\"I \t\t\t\t\tchose these numbers as they illustrate a choice investors \t\t\t\t\tare usually faced with — invest in a faster-growing stock \t\t\t\t\tthat doesn’t pay a cent in dividends, or earn a nice yield \t\t\t\t\tand see slower growth. Here’s the best news — you’ll end up \t\t\t\t\tearning more with the dividend, and typically have fewer ups \t\t\t\t\tand downs as you would with a riskier growth stock.<\/p>\n

In fact, in 10 years your portfolio would be worth $265,089 \t\t\t\t\tif you went with the dividend-paying holdings, versus \t\t\t\t\t$215,892 with the growth-only portfolio.<\/p>\n

Over even longer, the difference is more dramatic.<\/p>\n

Wait 20 years and your dividend portfolio would be worth \t\t\t\t\tover $702,723 compared to $466,096 — a difference of more \t\t\t\t\tthan $200,000.<\/p>\n

And here’s the best part. The misconception is that dividend \t\t\t\t\tpayers are boring, stodgy securities. They might pay a few \t\t\t\t\tpercent, but they won’t return enough to really make a \t\t\t\t\tdifference.<\/p>\n

That couldn’t be further from the truth…<\/p>\n

 <\/p>\n\n\n\n
\"\" Shares of EV Energy Partners (Nasdaq: EVEP<\/a>)<\/strong> yield 5.5%, but that hasn’t stopped them from \t\t\t\t\t\t\t\treturning 459% since the March 6, 2009 low.<\/span> <\/p>\n

\"\" During the same time, the Reaves Utility \t\t\t\t\t\t\t\tIncome Fund (AMEX: UTG<\/a>)<\/strong> has returned 284%, \t\t\t\t\t\t\t\twhile paying monthly dividends that now equal a 5.8% \t\t\t\t\t\t\t\tyield.<\/p>\n

\"\" And Medical Properties Trust (NYSE: MPW<\/a>)<\/strong> has returned 398% in addition to its 6.5% yield.<\/p>\n

But that’s during a strong market rally, and \t\t\t\t\t\t\t\tcoming off of multi-year lows. What about in \t\t\t\t\t\t\t\tdifferent conditions?<\/p>\n

\"\" Eagle Rock Energy (Nasdaq: EROC<\/a>)<\/strong> is \t\t\t\t\t\t\t\tpaying 5.2% and has a total of return of 128% \t\t\t\t\t\t\t\tin the past year.<\/p>\n

\"\" Since just September 2010 Universal \t\t\t\t\t\t\t\tHealthcare Trust (NYSE: UHT<\/a>)<\/strong> has returned \t\t\t\t\t\t\t\t38%, thanks in part to a 5%-plus yield.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

That’s not to say every dividend payer will be a big \t\t\t\t\twinner. It won’t be, and I wouldn’t listen to anyone who \t\t\t\t\tsays they can guarantee a stock’s gains.<\/span><\/p>\n

But in the sizzle of the mainstream financial media, it’s \t\t\t\t\tthe fast-moving names like Apple and Google that get most of \t\t\t\t\tthe headlines. As you can see, it may just be the dividends \t\t\t\t\tthat are most important to your success.<\/p>\n

 <\/p>\n

Good Investing!<\/span><\/p>\n

<\/span><\/p>\n

\"\"
\nCarla Pasternak’s Dividend Opportunities<\/em><\/span><\/p>\n

<\/em>P.S. — Don’t miss a single issue! Add our address, \t\t\t\t\tResearch@DividendOpportunities.com<\/a>, to your Address Book or Safe List. For instructions, \t\t\t\t\tgo here<\/a>.<\/p>\n

<\/span><\/span><\/p>\n\n\n\n
<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Disclosure: <\/strong>StreetAuthority owns shares of UTG as part of The Daily \t\t\t\t\tPaycheck’s<\/em> $200,000 “real money” portfolio. In accordance with company \t\tpolicies, StreetAuthority always provides readers with at least 48 hours \t\tadvance notice before buying or selling any securities in any “real \t\tmoney” model portfolio.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Think of where you’d be right now if you’d made this move ten years ago. The S&P 500 is up only 28% during that time. You could have seen returns of 328%, 305%, or 626%.<\/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-21484","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=21484"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21484\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=21484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=21484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=21484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}