{"id":28232,"date":"2012-03-14T10:13:52","date_gmt":"2012-03-14T14:13:52","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2012\/03\/14\/dividend-aristocrats-the-most-profitable-force-in-the-universe\/"},"modified":"2012-03-14T10:13:52","modified_gmt":"2012-03-14T14:13:52","slug":"dividend-aristocrats-the-most-profitable-force-in-the-universe","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2012\/03\/14\/dividend-aristocrats-the-most-profitable-force-in-the-universe\/","title":{"rendered":"Dividend Aristocrats: The Most Profitable Force in the Universe"},"content":{"rendered":"<div align=\"left\"><script type=\"text\/javascript\">\ntweetmeme_style = 'compact';\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\"><\/script>\n<\/div>\n<div><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-28160\" title=\"Dividend Aristocrats: The Most Profitable Force in the Universe\" src=\"http:\/\/www.investmentu.com\/wp-content\/uploads\/2012\/03\/dividend-aristocrats.jpg\" alt=\"Dividend Aristocrats: The Most Profitable Force in the Universe\" width=\"220\" height=\"220\" \/><\/p>\n<p>Dividend aristocrats allow investors to harness compounding returns of both capital gains and continually increasing dividends.<\/p>\n<\/div>\n<p>I couldn\u2019t believe the returns I was seeing. Could investors really generate this much money by using this strategy?<\/p>\n<p>I emailed <em>Wall Street Daily\u2019s<\/em> Matt Weinschenk, my go-to guy when I have questions about quantitative or mathematical issues. \u201cCan you check these numbers? They seem a bit high to me,\u201d I wrote.<\/p>\n<p>I was using a financial model on an Excel spreadsheet to figure out a way that investors could generate double-digit yields and returns over the long term. The theoretical returns that the model said were possible were enough to satisfy nearly any investor.<\/p>\n<p>A short time later, Matt emailed me back. \u201cYes, these numbers are accurate. And they\u2019re not just theoretical. Check out the attached.\u201d Matt was referring to a screen shot he attached to the email that showed some startling figures.<\/p>\n<p>Using this strategy, an investment in <strong>Southern Company<\/strong> (NYSE: <a href=\"http:\/\/www.google.com\/finance?q=SO\" rel=\"nofollow\" target=\"_blank\">SO<\/a>) 10 years ago had an average <em><span>annual<\/span> <\/em>return of 11.4%. That compares to the S&amp;P 500, which only rose 9.5% over the entire decade.<\/p>\n<p>If you go back 20 years, the returns were even more impressive. A $10,000 purchase of <strong>Colgate-Palmolive<\/strong> (NYSE: <a href=\"http:\/\/www.google.com\/finance?q=CL\" rel=\"nofollow\" target=\"_blank\">CL<\/a>) grew to $102,190 \u2013 a return of over 900%.<\/p>\n<p>It\u2019s why I call this investment methodology \u201cThe Only Investing Strategy You\u2019ll Ever Need to Become a Millionaire (or Stay One).\u201d It\u2019s the topic of my presentation next week at the <em>Investment U<\/em> 14<sup>th<\/sup> Annual Conference in San Diego.<\/p>\n<p>One thing you\u2019ll notice about the two stocks mentioned so far, they\u2019re not exactly exciting names. You won\u2019t find them on anyone\u2019s hot lists or must-buys for 2012. Yet these companies and others like them outperform the market year after year, decade after decade, because they have one thing in common: They pay dividends and raise them every year.<\/p>\n<p>I looked at hundreds of stocks. Most of them are what you\u2019d consider boring companies. Companies such as <strong>Coca-Cola<\/strong> (NYSE: <a href=\"http:\/\/www.google.com\/finance?q=KO\" rel=\"nofollow\" target=\"_blank\">KO<\/a>) and <strong>McDonald\u2019s <\/strong>(NYSE: <a href=\"http:\/\/www.google.com\/finance?q=MCD\" rel=\"nofollow\" target=\"_blank\">MCD<\/a>) \u2013 they all produced stunning results when you invest over many years. And if you reinvest the dividend over those years, look out, your returns really get amplified.<\/p>\n<p>That\u2019s because of <a title=\"The Secret to Long-Term Investing\" href=\"http:\/\/www.investmentu.com\/2012\/February\/long-term-investing.html\" target=\"_blank\">the power of compounding<\/a>. When you reinvest your dividends, you buy more shares, which spin off more income, enabling you to buy more shares, which spin off more income\u2026<\/p>\n<h2><strong>\u201cThe Most Powerful Force in the Universe\u201d<\/strong><\/h2>\n<p>Albert Einstein said that compound interest is \u201cthe most powerful force in the universe.\u201d\u00a0 Whether we\u2019re talking about interest or dividends, it\u2019s obvious that compounding really picks up momentum after several years.<\/p>\n<p>For example, let\u2019s look at <strong>Kimberly-Clark <\/strong>(NYSE: <a href=\"http:\/\/www.google.com\/finance?q=KMB\" rel=\"nofollow\" target=\"_blank\">KMB<\/a>) \u2013 another stock that isn\u2019t going to get anyone\u2019s adrenalin pumping. I mean, you can only get so excited about Huggies, Kleenex and Scott paper towels.<\/p>\n<p>But Kimberly-Clark pays a healthy 4.1% dividend yield, or $2.96 per share. If you bought $10,000 worth of stock, reinvested the dividends, and the dividend grew 9% per year like it has for the past 10 years, in 2022 your stock would yield nearly 14% on your original investment. Instead of $416 in income that you receive the first year, you\u2019d get paid $1,388.<\/p>\n<p>And if you could keep on <a title=\"Dividend Investing Site Map\" href=\"http:\/\/www.investmentu.com\/sm_dividends.html\" target=\"_blank\">reinvesting the dividends<\/a>, the compounding machine kicks into overdrive the longer it goes. In 15 years, you\u2019d receive $2,900 per year in dividends, or a 29% yield on your original cost. And in 20 years, $6,482 for a ridiculous 65% yield. So you\u2019d make your original investment back every 18 months at that point.<\/p>\n<p>These numbers assume the stock price rises 5% per year.<\/p>\n<p>I call these kinds of stocks Perpetual Dividend Raisers \u2013 and will be talking about my specific strategy for how to invest in Perpetual Dividend Raisers at the conference in two weeks\u2026 It will be the first time I\u2019m revealing this strategy to the general public.<\/p>\n<p>But even if you need income today and won\u2019t be reinvesting dividends, Perpetual Dividend Raisers can ensure that you <a title=\"Beat Inflation and a Down Market With Dividends\" href=\"http:\/\/www.investmentu.com\/2011\/September\/dividend-stocks-beat-inflation.html\" target=\"_blank\">stay ahead of inflation<\/a> by receiving more income every year from the same stocks.<\/p>\n<p>The best part is that these stocks tend to have lower volatility, and can even be safer than the broad market. And certainly more so than any hot stocks you may have been chasing to try to boost up your portfolio.<\/p>\n<h2><strong>Don\u2019t Trust Wall Street<\/strong><\/h2>\n<p>I believe so strongly in this method of investing that I\u2019m setting up my kids in <a title=\"Dividend Aristocrats: The Stocks You Need in Your Portfolio Now\" href=\"http:\/\/www.investmentu.com\/2011\/August\/the-stocks-your-portfolio-needs.html\" target=\"_blank\">Perpetual Dividend Raisers<\/a>.<\/p>\n<p>I\u2019m no longer trusting their college educations to Wall Street professionals like mutual fund managers. Last year 84% of stock mutual funds underperformed the market, according to Standard &amp; Poor\u2019s. Over the past 10 years, more than half of all stock funds didn\u2019t perform as well as the overall market.<\/p>\n<p>So why would I trust my kids\u2019 money to people with an established track record of underperformance, when I can instead invest in stocks and a strategy with a long history of producing strong returns?<\/p>\n<p>For decades, <a title=\"Investing in Dividend-Paying Stocks\" href=\"http:\/\/www.investmentu.com\/2011\/September\/dividend-paying-stocks-investments.html\" target=\"_blank\">dividend paying stocks<\/a> have outperformed the general market. Perpetual Dividend Raisers even more so. And when you <a title=\"A Three-Step Plan to Surviving Market Paranoia\" href=\"http:\/\/www.investmentu.com\/2011\/November\/3-steps-to-survive-market-paranoia.html\" target=\"_blank\">reinvest the dividends<\/a>, the total returns compete with and in most cases far outpace nearly all Wall Street pros.<\/p>\n<p>Good Investing,<\/p>\n<p>Marc Lichtenfeld<\/p>\n<p><strong>P.S.<\/strong> Marc will be making his presentation, \u201cThe Only Investing Strategy You\u2019ll Ever Need to Become a Millionaire (or Stay One),\u201d in a closed-door meeting next week at an undisclosed San Diego resort.<\/p>\n<p>There are no more seats available, but you can still gain access to Marc\u2019s presentation along with an absolute wealth of investment ideas and strategies from our experts. To find out how you can access this event from almost any location, click <a href=\"http:\/\/oxfordclub.com\/video\/oxf\/OCSP0212.php?code=WIUPMA05&amp;n=IUP\" target=\"_blank\">here<\/a>.<\/p>\n<div>\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=ytzJIKWZ-uM:zHVkFn2Lc-8:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=ytzJIKWZ-uM:zHVkFn2Lc-8:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=ytzJIKWZ-uM:zHVkFn2Lc-8:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=ytzJIKWZ-uM:zHVkFn2Lc-8:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=ytzJIKWZ-uM:zHVkFn2Lc-8:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=ytzJIKWZ-uM:zHVkFn2Lc-8:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=ytzJIKWZ-uM:zHVkFn2Lc-8:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=ytzJIKWZ-uM:zHVkFn2Lc-8:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/ytzJIKWZ-uM\" 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>Dividend aristocrats allow investors to harness compounding returns of both capital gains and continually increasing dividends. I couldn\u2019t believe the returns I was seeing. Could investors really generate this much money by using this strategy? I emailed Wall Street Daily\u2019s Matt Weinschenk, my go-to guy when I have questions about quantitative or mathematical issues. \u201cCan &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/fx\/2012\/03\/14\/dividend-aristocrats-the-most-profitable-force-in-the-universe\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Dividend Aristocrats: The Most Profitable Force in the Universe&#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-28232","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28232","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=28232"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28232\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=28232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=28232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=28232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}