Keys to Investing in Dividend Stocks

Dividends are considered the ones that enable investors perform well in both good and bad markets. Indeed, during hard times, such as the 1929 crash and the crisis of the 40s, 50s, and 60s, investors turned to dividend stocks due to the return dividends provided. The interest for dividend stocks is a result of a change in the investing environment. Conventional passive growth stock has betrayed investors. Between 2000 and 2009 investors were significantly affected. NASDAQ growth stock index generated losses of 44.5%.

There are three important issues that are true about investing: 1. Most investors are concerned with the safety of their capital and have a low tolerance for volatility. This may cause panic and may make them turn to bailouts when they should not do so. 2. Investors should have an investment method by means of which they can manage the stock-related risks at the same time they receive profits. This will definitely do away with panic and bailout. 3. Dividend stocks provide cash flow and inflation protection. Investors should be able to combine them to remain in a steady position, create returns and achieve their goals.

Source: Guru Focus

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