Income Investing

One of the things I like best about dividends is that they are paid in cash and thus impossible to fake. With that said, however, dividends can be cut or eliminated altogether if a weak company gets into trouble. Dividend cuts may happen if earnings plummet, debt covenants kick in, acquisitions are made and any number of other reasons. If you’re an investor who relies on dividends to supplement your paycheck or retirement, then the bottom line that you’ll have… Read More

One of the things I like best about dividends is that they are paid in cash and thus impossible to fake. With that said, however, dividends can be cut or eliminated altogether if a weak company gets into trouble. Dividend cuts may happen if earnings plummet, debt covenants kick in, acquisitions are made and any number of other reasons. If you’re an investor who relies on dividends to supplement your paycheck or retirement, then the bottom line that you’ll have less income to cover life’s necessities.#-ad_banner-# The best way to avoid a dividend cut is to limit your investments to financially strong companies that manage their cash conservatively. A key measure for this is the dividend payout ratio, which is the percentage of earnings the company allocates to cover dividends. Lower payout creates a safe cushion for covering the dividend even if temporary setbacks depress the company’s earnings. The great news for income investors is that we are in the middle of… Read More

You know interest rates are low when your most conservative customers are looking to move out of the safety that certificate of deposits (CDs) provide and into dividend-paying stocks, which provide higher yields, but may not be completely risk-free. The past few years there has been a “buzz” surrounding dividend-paying stocks, and rightly so. Consider the average retiree who needs more income, for example. It’s possible to choose the negligible 1-2% yields Treasury bonds… Read More

You know interest rates are low when your most conservative customers are looking to move out of the safety that certificate of deposits (CDs) provide and into dividend-paying stocks, which provide higher yields, but may not be completely risk-free. The past few years there has been a “buzz” surrounding dividend-paying stocks, and rightly so. Consider the average retiree who needs more income, for example. It’s possible to choose the negligible 1-2% yields Treasury bonds or CDs are offering, but there’s a lot more assets that offer higher yields right now. In fact, StreetAuthority Co-Founder Paul Tracy has already gone on record saying that we’re headed for a “Dividend Decade” — a period where ALL of the market‘s returns in the next decade will come from dividends. He’s convinced that shares of companies that are… Read More

Four weeks ago, I told you about a trading strategy specifically designed to reduce exposure to market volatility, preserve capital and generate income. I know it sounded almost too good to be true, but those readers who acted on the specific trade in that… Read More