A STOCK MARKET INVESTMENT PLAN THAT NEVER LETS

A STOCK MARKET INVESTMENT PLAN THAT NEVER LETS
YOU DOWN
by: james marriott
the bulls and bears of the stock market are both
TEMPTING AND SCARY TO THE INVESTORS. SPECULATORS
are enchanted by the stock market's potential to
help them in making quick money with a big m.
WHILE THOSE WHO TREAD WITH CARE AND CAUTION,
often shy away for fear of losing. however, the
stock market is not all about speculative gains
OR BLACK TUESDAYS. IT IS A PLACE WHERE COMMITTED
companies look for raising money to fund their
activities. serious investors can actually
CREATE WEALTH NOT ONLY FOR THEMSELVES, BUT ALSO
for the companies and the nation. a wise way to
invest in the stock market is to empower your
SELF WITH INFORMATION. YOU HAVE TO KNOW AND
learn about the company you invest in, from past
records and future plans.

irrespective of what the wall street gurus
predict or what the economic indicators like dow
JONES AVERAGE SAY, A SIMPLE AND FOOLPROOF WAY OF
knowing that a company is doing well is to keep
a track of how much dividend income does it pay
TO ITS SHARE HOLDERS EVERY YEAR. IF THE DIVIDEND
rates have been rising steadily every year, you
know you have a safe bet. to benefit from the
FUTURE PROSPECTS OF SUCH COMPANIES, IT IS A GOOD
idea to rollback the returns into the company.
which means, instead of adding the dividends to
YOUR SAVINGS, YOU CAN INVEST THEM IN THE SHARES
of the same company. that way, you can ensure
that the dividends you receive are always higher
THAN WHAT YOU GOT LAST, WITH A LARGER NUMBER OF
shares getting added to your investment
portfolio every time.

with this kind of an assured investment plan in
place, investors with a gambling streak begin to
THINK BEYOND MAKING A QUICK GAIN. WHILE THOSE
who were afraid to take risks get wiser.

LET US FIND OUT WHY COMPANIES THAT GIVE
ever-increasing cash dividend income are a good
choice for investment:

your share holding goes up and so does your
dividend income.
YOUR INCOME BEGINS TO ESCALATE WITH YOUR OWNING
more shares every year and the dividend income
rising correspondingly.

your dividend income increases even if stock
prices don't.
YOU ARE NO MORE AT THE MERCY OF THE MARKET.
irrespective of what your shares are worth, you
keep earning additional cash dividends. in fact,
EVEN IF THE MARKET PRICE DIPS, YOU ARE STILL AT
an advantage, as that allows you to reinvest to
purchase more shares.

you are not hit by inflation.
with the dividend income rising every year, you
OFFSET THE EFFECTS OF A RISING INFLATION. THIS
particularly provides relief to people who have
retired and depend on a regular cash inflow to
HELP THEM MEET THEIR EXPENSES. AT THIS STAGE ONE
need not rollback the investment into further
shares, instead, the cash dividend can be used
AS A KIND OF REGULAR PENSION MONEY.

start young
THE INGENUITY BEHIND THIS INVESTMENT STRATEGY IS
that it protects you from the fluctuations that
generally occur in the market. a lower stock
MARKET RATE ONLY MEANS YOU BUY MORE TO INCREASE
your dividends more. it is advisable to start
this strategy early in life while you are still
WORKING, SO THAT YOUR WEALTH BUILDS UP GRADUALLY
and constantly over the years. and you are
assured of a regular income, as you grow older.

remember, the success of this proven investment
plan depends significantly on the track record
OF THE COMPANY YOU INVEST IN. IT SHOULD BE ONE
that declares a higher dividend at the end of
each financial period. a simple way to find that
OUT WOULD BE TO CALCULATE THE DIVIDEND YIELD.
you can do that by dividing the annual dividend
per share by the price per share. of course, no
INVESTMENT CAN BE TOTALLY FREE OF RISKS, NEITHER
is this one. keep an eye on the dividend yield,
and if that dips, it's a signal for you to opt
OUT OF THE INVESTMENT.

ABOUT THE AUTHOR:
james marriott is a finance writer with more
than 15 years of experience in writing financial
CONTENT, INCLUDING THOSE RELATED TO CREDIT
cards, mortgages, stocks, investments, and
funds. he has been with rncos, a premier
FINANCIAL WRITING SERVICES COMPANY, FOR 2 YEARS
as head of financial writing. he is also a
regular financial columnist with renowned
BUSINESS JOURNALS. FOR YOUR COMMENTS ON THE
article and further financial assistance, please
contact our staff writer at info@rncos.com

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