Investing Tips for Millennials - Buy and Hold Dividend-Paying Stocks
Savvy long-term investors buy and hold stocks that pay regular dividends. Dividends are real cash that you
can save, spend or reinvest to buy additional shares of a stock without laying out any new money. For example, suppose you own 500 shares of a stock that pays a twenty five cent dividend each quarter. Each quarter you would receive $125 so by the end of one year you would have received $500 just for owning the stock.
Another good investing practice is to select stocks that pay consistently rising dividends. Even small but regular increases add up over the years. For example, as the twenty five cent quarterly dividend grows to thirty cents, you would receive $600 in dividends for the year.
If you don't need the dividend payments as income, you can reinvest the dividends to buy additional shares. Over many years dividend reinvestment can significantly increase your total return because you are constantly increasing the number of shares that you own. See how dividend reinvestment grows your nest egg.
How to Own Dividend-Paying Stocks
The Dividend Aristocrats include over fifty stocks that have increased their annual dividends twenty five or more consecutive years. These are premier U.S. companies that have consistently rewarded investors with long-term gains.
In addition to dividend-paying stocks, dividend-oriented exchange-traded funds (ETFs) are a way to own dividend stocks. ETFs are bought and sold like stocks, but an ETFs hold many stocks so you get the benefit of diversification. See Dividend Aristocrats Exchange-Traded Funds (ETF) and Dividend Achievers Exchange-Traded Funds (ETFs).
Master limited partnerships (MLPs) are another way to own dividend stocks. See Master Limited Partnerships (MLPs) for a table of many MLPs.
Real Estate Investment Trusts (REITs) own residential, commercial and industrial real estate and pay monthly and quarterly dividends. See some Real Estate Investment Trusts (REITs).
Investing Tips for Millennials - Keep Investing Fees to a Minimum
Investing Tips for Millennials - Reinvest Dividends
Investing Tips for Millennials - Save and Invest Regularly
Investing Tips for Millennials - Simplify Investing - Own the S&P 500