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We've Kept You One Step Ahead of Gold… and Others Are Starting to Notice
Longtime Private Briefing subscribers know that one of my favorite adages about investing is “Take the road less traveled…”
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For the past 30 years, my grandfather has been living the retirement dream, thanks to a few strategic stock plays.
Here's the interesting part: My grandfather never knew a thing about stocks. He didn't know how to value them, or when to buy and sell.
But he did know the power of income.
You see, as a child of the Great Depression he saw stocks differently than we do today. His generation didn't buy stocks for the possible capital appreciation.
Instead, they bought stocks based on the dividend yield – and the consistency of that dividend.
They had lived through uncertain times, so they only trusted investments that offered fairly certain income.
That's why now, as we find ourselves back in uncertain markets, you want to make sure your portfolio includes interest-bearing and dividend-yielding assets.
Passive dividend income arrives no matter what's happening in Greece, or how long U.S. Federal Reserve Chairman Ben Bernanke decides to hold rates at record lows. It comes as long as the company remains strong.
Which means my grandfather's strategy is worth copying.
My grandfather started with certificate of deposits (CDs) in the late 1970s and early 1980s. These were the high-interest days, so these CDs paid 16% to18% interest. He got that nice, passive "certain" income for as long as that party lasted.
Then once interest rates dropped and all his CDs matured, he looked for the next round of certain income. He had just retired from the telecom industry and believed AT&T Inc. (NYSE: T) was a good long-term play.
Best of all, AT&T paid a 6% dividend yield. So he wisely invested his CD income into AT&T stock and then sat back and waited.