What Are The Benefits of Dividend Investing
Dividend investing is one very profitable strategy you can use to invest in the stock market. In fact here are 4 reasons why this strategy can work so well.
- Get Money Now
When you buy a few great dividend paying stocks you are able to get a monthly income without having to wait 30 years to see a profit. That is a great advantage over other long term methods, after all it is pretty hard to keep putting money away into investments which you will not see any profit from for 30 years, it can be much easier to invest in something you think will start paying you money today.
2. Stocks Don’t Have to Appreciate
Stocks do not have to go up in value in order to make a huge gain in the market. As long as it is paying out a consistent cash flow you are able to generate a monthly income even in a sideways market without having to learn stock market trading.
3. Stocks Can Go Up
While it is not absolutely necessary to get into a stock that is going to shoot up it is in your best interest. By checking the company’s fundamentals and long term growth potential you can get into a company that is likely to shoot up and help you make more money.
So by income investing you not only make money through dividends but you also make money by appreciation.
4. You can Make Extra Money by Selling Covered Calls
Ok let me add the last sentence, by income investing you can not only make money through dividends and appreciation you can make even more money through writing covered call.
This allows you to sell someone else the right to buy the stock from you at a certain price. If the stock does not make a big move up you are able to keep it and sell another call option against it next month. On the other hand if it does shoot up you will run the risk of having to sell it. In many cases selling covered calls can still be worth it.
These are just a few of the main advantages of dividend investing. The strategy can be extremely profitable strategy, but then again it might not be right for all people.
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