Using Dividend Stocks To Managing Risk

When you purchase individual stocks, risk is inherit. Sometimes bad things sometimes happen to good stocks such as the Chicago Tylenol murders of 1982. This shook Johnson & Johnson’s (JNJ), but eventually it prevailed. Sometimes it is difficult when a strong leader leaves a company and creates a void that just can’t be filled. Consider the performance of General Electric’s (GE) after Jack Welch retired and Microsoft’s (MSFT) after bill Gates began relinquishing his responsibilities. So how do you guard against these situations and disasters similar to what BP (BP) and their shareholders are currently facing?

It is a good idea to have a written mission statement for your income portfolio that includes your goals and what you will and will not do in the portfolio. It may sound silly to take the time to write this down, but it is very helpful when fear or greed tempts you from your predefined path.

Source: Dividends Value

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