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The power of a proven
stock investment plan
by Charles M. O'Melia
When you invest in the stock market for ever-increasing cash dividend income,
verses trying to make a buck in the stock market, your mind set will change.
There will no longer be a fear of losing money in the stock market. With the
right type of investment plan and investment choices all worries of losing money
in the stock market will disappear.
The mind set that will emerge when you adopt a proven income producing
investment plan in the stock market will create an air of worry-free concern
about the up and down turmoil of a volatile stock market.
Whether your investment portfolio is rising or falling won't make a difference.
Your income producing investment plan will prove to continually increase your
cash dividend income from all your stock market investments, on a weekly,
monthly and yearly basis.
The use of a proven investment plan will allay all fears about investing in the
stock market. Why? Because the proven investment plan is based on two very
simple and fundamental investment strategies - investing in only those
companies that have a historical record of raising their dividend every year,
and having the dividends from those companies rolled back into more shares
each quarter, until retirement.
By investing in only those companies that raise their dividend every year you
will become confident and assured of each stock market investment. And by having
the dividends of each company rolled back into more shares each quarter
you automatically dollar-cost average into the company's stock throughout
the years.
What happens when you invest with this mind set - investing for ever-increasing
cash dividend income through companies that raise their dividend every year,
rather than trying to make a buck in the stock market?
You begin investing in only those companies that have a proven record of
rewarding their shareholders every year. Every dividend rolled back into the
company's stock every quarter increases the amount of shares owned, and
therefore, every dividend from the company will be higher than the previous
dividend.
After 10 or 15 years, you'll find that the cash dividends begin to add up!
The cash dividend income will increase every quarter, no matter what the stock
price of the company is at any given time in the market place. As a matter of
fact, once you have owned the stock for 10 or 15 years, you'll be torn as
to whether you want the stock to go up or to go down, since a lower stock price
will allow your dividend reinvestment to purchase more shares, thereby
accelerating your cash dividend income.
The rising dividend every year will help off-set the risk of inflation. This
will be especially helpful when you retire and start having the dividends
sent home, rather than having the dividends rolled over into more shares.
During the retirement years, when the dividend is being sent home to help
ends-meet, the price of the stock doesn't matter. Your income increases every
year anyway, because every company owned has a program of raising their dividend
every year.
After retirement, if your account is worth $250,000 one year and due to a severe
drop in the stock market, the net value of your securities drops to $200,000,
the net worth of the securities at $200,000 would still generate a higher cash
dividend income. The net worth of your holdings means little, if the income
produced from your holdings is increasing every year, no matter what the net
worth.
That is the partial reasoning behind investing in only those companies that
raise their dividend every year. The other reasons to eliminate risk in
investing in the stock market. A company that has been raising their
dividend every year MUST be doing something right or the money wouldn't be there
to pay their shareholders ever- increasing cash dividends.
The lower the stock price goes, after your initial investment, the higher the
dividend yield of the stock. This is extremely powerful and beneficial for you
when you are still having the dividends reinvested. Reinvesting those dividends
at a lower stock price accelerates your cash dividend income.
And if you are in retirement and no longer investing in the stock, the lower
stock price does not affect your dividend income at all. The cash dividend
income will still increase every year due to the company's program of
raising their dividend every year.
As time goes on using this type of investment plan/approach you will discover
that by reinvesting those ever- increasing cash dividends, coupled with stock
appreciation is a very powerful wealth creating formula!
For more excerpts from the book 'The Stockopoly Plan' visit:
http://www.thestockopolyplan.com
About the author:
Charles M. O'Melia is an individual investor with almost 40 years of
experience and passion for the stock market. Author of The Stockopoly Plan,
published by American Book Publishing. |
