Suche
Mein Konto
The dividend formula: This is how investors benefit from dividend-paying stocks in the long term!
There are many successful strategies for being successful in the stock market. One of them, which promises investors stability and regular income, is investing in dividend-paying stocks - or dividend strategy for short. With this strategy, investors ideally benefit not only from possible price gains, but also from regular dividends. Ideally, they will also rise. The dividend formula, consisting of intelligent stock picking and a long-term perspective, can be the key to success. Finding Quality Stocks The first step in the dividend formula is selecting companies with a solid dividend history. Stable dividend payers are often characterized by sustainable earning power and a solid financial position...
The dividend formula: This is how investors benefit from dividend-paying stocks in the long term!
The search for quality stocks
The first step of the dividend formula is to select companies with a solid dividend history. Stable dividend payers are often characterized by sustainable earning power and a solid financial position. A thorough analysis of the company's balance sheet, profit and loss statement and cash flow development is essential. It is important to recognize balance sheet cosmetics and keep an eye on what is important. Blue-chip companies with a long history of consistent dividend payments can be good choices.
Don't put everything on one card
Another important aspect of the dividend formula is portfolio diversification. Broad diversification across different industries and regions reduces the risk of individual company developments. At the same time, a balanced portfolio can help offset potential losses in one area with gains in another. Even if the successful investor Warren Buffett seems to be taking a different approach with his strong focus on Apple, this is not recommended for normal investors.
Think long term
Things may look different when it comes to the long-term nature of the investment. Warren Buffett is known for his long-term holding period. He began investing in Coca-Cola as early as 1988. He still holds the position today.
The long-term perspective is at the heart of the dividend formula. Investors who rely on dividends should have patience, because the dividends of good companies only multiply over very long periods of time. Their true strength only becomes apparent after years and decades. By reinvesting the dividends received, investors can also benefit further due to the compound interest effect. The regular dividends only have to be reinvested in promising quality stocks - a simple system.
The dividend yield should not be the only criterion when selecting stocks. On the contrary: a high dividend yield has often proven to be a warning signal. A high dividend yield can indicate problems in the company and herald an impending dividend cut. A careful analysis of the fundamental key figures is therefore essential to ensure a sustainable dividend yield. The quality of management should also be included in the analysis. It could be the crucial variable because only a good captain can steer a ship through heavy seas.
conclusion
During times of economic uncertainty and volatile markets, the dividend formula can prove to be a robust approach. Regular dividend payments not only offer an additional source of income, they are also a sign of the company's stability and financial health. This is exactly where the dividend formula comes in: a combination of stock picking, long-term thinking and diversification.
Source: According to a report by www.aktienwelt360.de.
Read the source article at www.aktienwelt360.de