It's hard to think of the future when so much excitement can be had today. I understand and respect “living for the now” but am compelled to encourage all of you to SAVE some percentage of your earnings beyond 401K’s and Ira’s. In fact, those of you haven’t already, need to start a separate investment account with one of the online brokerage firms. Any of the major ones are acceptable.
As the market crumbles and the media exploits these events in the headline news, the opportunities to create lasting wealth, rewarding you with future income, grows exponentially! In the last three years the markets in general have sold off three times. Each time, those that bought at or near the lows were rewarded significantly. My message is simple. Don’t buy into all the hype. Examine the real facts about certain stocks and not the market as a whole. Below, I have outlined a conservative approach to income and capital gain and presented the actual results since March of 2009.
Stock Bought low 2009 Today’s price Dividend yield
Dow Chemical $7.00 $ 28.00 3.4%
Intel $13.00 $ 20.50 4.3%
Linn Energy $13.00 $ 38.00 7.3%
Kinder Morgan $42.00 $ 69.00 6.5%
Verizon $25.00 $ 35.00 5.6%
Annaly $11.80 $ 18.00 14.2%
Assuming we made equal investments in all these companies, we would have received an average dividend payout/year of 6.86%!! Wow, try to match that anywhere? Now, let’s add the 86% increase in the value of these equities, our capital gain, and we have a total return over three years that exceeds 100%!! Yes we doubled our money in three years! Sound good? Maybe we should all start taking a closer look at what’s real and what’s the headline news.
If you choose to do absolutely nothing, my love and understanding will always be with you. Hope your days ahead treat you well.
(Reminder: Check this blog's archives for other artcles.)
Steve M
Great advice. Thanks!
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