7 Reasons to Invest for Income -- Reason #2
Income Investments Have Lower Volatility
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For example, the price of bonds can and do go up and down, but normally only in response to changes in interest rates in the overall economy. These do change over time. But bonds display nowhere near the daily up and down price bounces of stocks.
Stocks that pay dividends are less risky than stocks that don't. Companies that pay dividends tend to be bigger, older and more established than those that don't. They've survived for years, so they're less likely to go out of business. They're still growing, but they're already too big to grow dramatically.
Therefore, in a bull market the market prices of dividend-paying stocks don't go up as high or as fast as the small, glamorous, "sexy" growth stocks of small companies with good stories.
However, in a bear market their stock prices also don't go down as far down as the small, now-in-desperate-financial-trouble stocks that need all their cash just to make their payroll.
This means that dividend-paying stocks are less risky than the market as a whole.
Next: Reason #3 -- Perfect for Tax-Deferred Accounts
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Before the subprime mortgage mess makes stock market goes down more . . . before the stock market goes up, making dividend paying stocks more expensive . . . before the rising cost of gas, gold and food -- and the sinking U.S. dollar -- put the world into a recession . . . before retiring baby boomers start selling off their growth stocks . . . before you need investment income just to eat!
7 Reasons to Invest for Income -- NOW More Than Ever
Rick Stooker
- The greatest secret to income investing (Einstein called it "The most powerful force in the universe")
- What -- historically -- gives stock market investors 1/2 of their total returns (from 1929-1954; 1966-1981; and 1999-mid-2008 it was the ONLY way to make money from the stock market!)
- How to avoid suffering from accounting fraud. Automatically keeps you from throwing you money away on future Enrons, Tycos, and WorldComs
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