By
Brian Hunt, Editor in Chief, Stansberry & Associates
Friday, August 23, 2013
Now that stocks and real estate have soared over the past few years, a lot of bright people expect a big market decline to hit any day now.
It makes sense to expect a correction. The S&P 500 is up nearly 50% in the past few years.
But if that decline arrives, there's an exclusive group of investors who couldn't care less...
These are the few folks who have "graduated" into a higher class of investor.
Let me explain...
Few people belong to this exclusive group because most folks are obsessed with short-term gratification. They pore over tiny market movements, news releases, CNBC clips, and other things that are meaningless in the "big picture."
These people are always busy trying to get the market to do something for them... instead of using the greatest power in all of investing.
That power is TIME. And used properly, time causes extraordinary things to happen to your portfolio. Time allows you to generate huge amounts of income. Used properly, time makes it so you don't care about the moods of the stock market.
The investors who don't care about market corrections are the ones who have learned how to buy "World Dominating Dividend Growers" at good prices and hold them for years.
World Dominating Dividend Growers are the
world's biggest and best dividend-paying businesses. They are names you see every day... like
Johnson & Johnson and Coca-Cola. Investors who buy these stocks at cheap prices and hold them for years enjoy the phenomenon of wealth creation.
Here's how it works...
An investor who bought dividend-machine cigarette-maker Altria back in May 2009 at $17 per share is now earning more than a 10% yield on his purchase price.
Now... do you think that guy cares about a 10% or 20% stock-market correction?
Do you think he cares about another 5% decline in home prices?
No way.
He's comfortable knowing that no matter what the stock market does, folks are still going to smoke cigarettes tomorrow. He knows another Flash Crash could come around and he would still get that 10% yield on his shares. They could shut the market down for a year and he'd still get his money.
That's extraordinary peace of mind most investors will never enjoy... because they're obsessed with short-term gratification.
The obsession with short-term gratification causes people to "miss the boat" on the incredible income power of World Dominating Dividend Growers. Most World Dominating Dividend Growers don't pay out huge current yields. They pay current yields of around 3%-4%... and then "grow" their way to pay shareholders 10% and 20% yields.
These yields end up as the safest, largest income streams you'll find anywhere.
Here's how my colleague Dan Ferris explains it...
| Wal-Mart's yield isn't gigantic right now. But remember... it has raised its dividend every year for the last 37 years. Since 1976, Wal-Mart's dividend has grown at a rate of 25.67% per year. At that rate of dividend growth, you can hold the stock five years, and you'll find yourself collecting dividends totaling 8% per year over today's cost. Hold it another five years, and with that kind of dividend growth you'll get 25% per year over today's share price. |
|
If you're earning a 25% (and growing) yield on a stock, do you care if the share price falls 20%? Heck no!
Silver is down 8%? Oil is up $4 a barrel? Interest rates are up a quarter of a percent? This or that guru is predicting a stock-market decline? Big deal.
No matter what the day-to-day hype stories are, the "biggies" of the corporate world – companies like
Johnson & Johnson and Coca-Cola – will still be No. 1 in their industries.
They'll still have giant, insurmountable competitive advantages. They'll still have thick profit margins. They'll still generate huge cash flows. They'll still direct a portion of those cash flows to shareholders through ever-increasing dividends.
For most folks, short-term trading takes up too much time. It causes too much stress. It causes sleepless nights. It generates high fees. It drains mental energy. But if you own a
World Dominating Dividend Grower portfolio, you won't worry about much.
All you need is TIME.
Think of it like planting a money tree. It's small today, but over time, it will grow to be a worry-free bonanza.
Good investing,
Brian Hunt
Source:
https://www.stansberryresearch.com/dailywealth/2490/world-dominating-dividend-stocks