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Let’s face it: Ben Bernanke’s near-zero interest rate policies have been absolutely crushing conservative savers and investors.
At the same time, they have been sending pretty much all other asset classes higher and higher:
• The main gold ETF — GLD — is up 49 percent since the stock market bottomed in March 2009 …
• Junk bonds, as measured by a basic mutual fund like Vanguard’s VWEHX, have rocketed 41 percent over the same timeframe …
• And U.S. stocks themselves have been going gangbusters, gaining 98 percent since their lows of March 2009!
Over the last week, I’ve been having an ongoing conversation with many of you about all of this on my personal blog.
Some of you have been writing in about all the risks that are still out there — simmering inflation, the possibility of a renewed financial crisis, and geopolitical risks in the Middle East just to name a few.
And there’s no doubt that — despite the recent calm — there ARE still plenty of big risks out there.
Yet I don’t think it’s prudent to sit completely in cash while the rising tide carries stocks higher and higher, either …
Especially not when you’re literally getting paid nothing to sit things out!
So that brings up a very basic question:
How Can You Participate in Stocks
Without Losing Sleep at Night?
Is there a way to have your cake and eat it too? To get a stake in rising stocks without losing too much sleep at night?
I sure think so — using the very same strategy I’m using to help my own dad safely grow his $100,000 retirement account.
It will probably come as no surprise that dividend stocks are the pivotal part of this strategy. Why?
First, while many other investments are offering pitifully low yields, many blue chip dividend stocks are boasting annual dividends worth 4 percent, 5 percent, 6 percent or much more.
And unlike fixed-income yields, which never rise, dividend payments have the tendency to increase over time. That gives you built in inflation protection!
Second, dividend actions — positive moves like increases and resumed payments have been picking up from the depressed levels we saw over the last few years and I think that’s going to continue, especially because U.S. companies have record levels of cash right now.
Third, the extension of favorable tax rates on dividend payments only gives executives further incentives to continue paying out cash to shareholders and also means your payments are worth more after Uncle Sam takes his share.
Fourth, it’s been proven time and time again that dividend stocks hold up far better than non-dividend stocks during market downdrafts!
In Fact, a Well-Chosen List of Dividend Stocks
Can MAKE MONEY Even During Market Crashes!
On my blog last week, a poster named Joe asked me pointblank, “How have your picks fared over the past three years?”
Well, Joe, I’m proud to say that my proprietary approach to maximum income investing has proven so cautious and profitable, if you had followed every recommendation I’ve issued since I began publishing my newsletter in 2007 …
Not only would you have handily outperformed the S&P 500, you would have even made money during the most severe recession since the Great Depression!
There is absolutely no cherry-picking going on here. I’m counting:
- Our winners and our losers …
- Our open trades and our closed trades …
- And in times when the overall market was soaring and when it was sinking …
Through all that, my conservative, risk-averse approach to total return income left the S&P 500 in the dust!
In fact, since the first issue of my newsletter was published in 2007, my recommendations have outperformed the S&P 500 market average by a full 20 percentage points.
Not bad — especially when you consider the fact that I recommend only stable dividend-paying stocks and other income investments — never high-risk stocks.
If that doesn’t prove my point that you CAN invest in stocks with a high degree of safety, I don’t know what would!
Best wishes,
Nilus
