August 19, 2008

It’s no secret that I believe a concentrated list of well-chosen dividend payers is the best way to secure healthy income and reap nice capital gains over time.

That’s especially true if you follow a long-term buy-and-hold strategy.

Why? Because you’ll pay only small brokerage commissions the few times you buy or sell, and you’ll avoid big tax bills or annual expenses the whole time you’re holding.

If you do your investing inside tax-sheltered accounts like IRAs, the strategy works even better!

However, maybe you’re not a big fan of watching stocks move up and down or making adjustments on a regular basis.

That’s okay.

I’m a big fan of keeping things simple, too. And in the investment world, few things are simpler than exchange traded funds (ETFs).

These vehicles — which function like mutual funds but trade like stocks — are an easy way to get a broad stake in a particular asset class with minimal effort or expense.

In general, ETFs don’t require lots of micromanagement … you can simply “set them and forget them.”

In fact, some investors take this to the extreme by building so-called “lazy portfolios.”

Here’s how it works:

Read the rest of this article and learn which Dividend Superstars portfolio companies made payments in July.

To your dividend investing success,

InvestingInDividends.com

Unfortunately, the current environment is forcing some firms to pare back their distributions, especially in the financial sector. Fannie Mae’s dismal second-quarter results last week — which included a $2.3 billion loss and a dividend cut from $0.35 to $0.05 — is just one example of the kind of news that’s coming over the wires.

In fact, according to data from Standard & Poor’s, the second quarter saw the greatest number of dividend cuts in 18 years. So yes, there are reasons to be worried about weak companies being forced to cut.

But there are also plenty of companies that continue to pay — and increase — their dividends.
Recent examples of dividend hikers include Cummins and CVS. And seven stocks in the Dividend Superstars portfolio made payments in July.

Larger companies, particularly those with longer histories of dividend payments, look far more likely to continue their streaks. These companies have strong balance sheets and have survived plenty of other market cycles.
Bottom line: There are still plenty of places to find solid, reliable yields … you just have to do a little legwork.

Read the rest of this article and learn which Dividend Superstars portfolio companies made payments in July.

To your dividend investing success,

InvestingInDividends.com

When companies like Pfizer, Philip Morris, and Colgate sell their products in foreign markets, they price them in euros, Japanese yen, Australian dollars or Brazilian reals. But when it comes time to tally those sales and bring the money home, they get translated back into U.S. dollars.

Result: A weaker greenback means these companies collect more dollars on every foreign sale. Moreover, this same phenomenon allows U.S. companies to charge less for their products in foreign markets and STILL get the same dollar amount in sales. That makes the companies more competitive on the world stage.

Please note that it’s not one particular industry that benefits from this phenomenon. Pharmaceutical firms … tobacco concerns … toothpaste makers … they all gain from a falling dollar as long as they’re selling a lot of goods overseas.

Even a U.S. engineering firm that did a project in London would benefit from a weaker dollar. Of course, it helps that the three companies mentioned today boast world famous, market-leading brands. After all, even during a recession (in the U.S. or a foreign country!) consumers will still take their medicine, smoke, and brush their teeth. That gives these firms steady demand around the world, no matter what.

Find out how other dividend stock companies bank big from a weak dollar.

To your investing success,

InvestingInDividends.com