Every schoolchild knows the fable of "The Tortoise and the Hare" - in their famous race, the tortoise kept on at a steady plod while the speedy hare got bored and took a nap. Eventually - surprise! - the tortoise crossed the finish line first, because "slow and steady wins the race."
That fable sums up the popular divide between "traders" and "investors," too. Would you rather get in and get out with the hope of quick profits... or buy and hold, trusting that your nest egg will grow bit by bit? (The tale is biased in the tortoise's favor, but you will find plenty of hares arguing for the other side.)
The good news is... with our "10-Minute Millionaire Solar System," you can have both.
Last week, we kicked off a new series here at 10-Minute Millionaire with this video - where we discuss a "solar system" with your nest egg at the center and other profit opportunities orbiting around the outside.
Today, we're going to crack that nest egg open just a bit and take a "peep" at the profitable goodies inside...
As you know, our 10-Minute Millionaire system is based on technical analysis - within the broader market narrative, we spot chart pullbacks to extreme support levels, which then allow us to frame the trade and book sizable profits. We're not nearly as concerned with the fundamentals of these stocks (the ins and outs of their financial statements).
In other words, we're traders... and proud of it.
But to build your nest egg, you have to be able to think like an investor, too.
The goodies in your nest egg will stay there long term, hopefully for years - quietly accumulating money in the background. That means you really do have to pick companies with good fundamentals - and ones that pay generous to ample dividends.
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When a stock pays a big dividend, I'm less dependent on the market action to make money. If I've done my homework, the company behind the stock will have proven to me that through thick and thin, it will be capable and willing to cut me dividend checks quarter after quarter and year after year.
That can do wonders toward a healthy and growing nest egg.
If the company comes through as expected, I can make money while I own the stock even if the market value doesn't necessarily move up as quickly or even just stays relatively stable. By piling up the dividend cash I can profit nicely if the dividends are ample and they keep coming.
And if the price of the stock remains attractive - I can reinvest in more and more shares, building up the overall value of the position.
The key is that with great dividends, I don't have to have to rely on bigger market price actions to make ample profits.
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This Year's Dividend Increase Bodes Well for the Future
Dividends aren't just attractive for investors and traders - they're increasingly attractive for companies as well. Dividends provide proof of shareholders getting more value from companies and companies' management. And a rising dividend makes a company's stock all the more compelling for investors and traders to take a look and to buy. And they also make for a good reason to continue to own good dividend stocks.
For all of these reasons, companies that are new to the public market or have been listed for decades see that good dividends make for a great base of investors who will buy and stay with their stock in their portfolios.
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And so far this year, dividends are a powerful force that companies are deploying. Through the end of February of this year alone, so far - out of the 500 companies in the S&P 500 stock market index - 20% have been increasing their dividends. These dividend hikes have been averaging gains of more than 14%, which is the biggest hike since 2014.
Armed with rising revenue in varied industries with the more robust economy and the big corporate income tax rate for domestic and international revenue, I expect that dividend payout amount may well continue to build upon this strong start for this year.
This is important, as dividend-paying investments are crucial for your own portfolio. You'll recall in my video discussion on March 2, I told you that while I'm always looking at various strategies to trade the market, I also have the core of my portfolio locked down in investments that I won't touch.
And inside my nest egg (and hopefully yours), there are plenty of solid dividend-paying stocks and other income investments that I can count on year in and year out. In the coming weeks and months, I'll be sharing more of these investment ideas with you.
A "Tortoise" That Delivers Impressive Returns
The proof of dividends can be found by looking at just the past trailing 10-year return on the S&P 500 index. If you look at the index from February 2008 through February 2018, the return was 103.87% as of this writing. But if you add in the dividends reinvested in the index, the return jumps up more than 45.45% better to 151.08%.
And with dividends on the ascent, the returns should be more impressive going forward for retirement nest egg portfolios. Dividend payments also offer a defense in a sideways or a near-term downturn in the market, as cash payouts buy patience with good reliable dividend-paying companies and their stocks.
So, do what I told you I do in the video - build up and watch and don't touch the nest egg part of your portfolio, and look for more to add to it going forward.
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The post The Power of Dividends for Your Nest Egg Portfolio appeared first on 10 Minute Millionaire.
About the Author
D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.