The Little Book of Big Dividends: A Safe Formula for Guaranteed Returns - Hardcover

Carlson, Charles B.

Hardcover

ISBN 10: 0470567996 ISBN 13: 9780470567999

Publisher: Wiley, 2010

Synopsis

Rare Book

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Everyone needs to invest, but where do you invest during bear markets?

The massive stock declines over the past year have eroded savings, but this doesn't mean you should stuff your money under a mattress. It needs to be put to work getting some return so that it will grow.

Smart investors will turn to high dividend paying stocks to get a stable and growing stream of income. Dividend investing-that provides an income beyond any gain in the share price-may be the investor's best weapon. Dividends are safe, largely reliable, and maybe at the their cheapest levels in many years. While the best paying dividend stocks of recent years, such as financials, took a huge beating in 2008, opportunities will abound in 2010 and beyond-if you know where to look.

In The Little Book of Big Dividends, dividend stock expert Chuck Carlson presents an action plan for dividend-hungry investors. You'll learn about the pitfalls, how to find the opportunities, and will learn how to construct a portfolio that generates big, safe dividends easily through the BSD (Big, Safe Dividends) formula. If you're a bit adventurous, Carlson has you covered, and will teach you how to find big, safe dividends in foreign stocks, preferred stocks, ETFs, real estate investment trusts, and more.

• Contains the simple tools, strategies, and recommendations for finding big, safe dividends
• Helps you put a complete portfolio together that pays dividends every month
• Show you the top dividend paying stocks with their dividend payment dates

It doesn't get any easier than this, and in these turbulent times, you can't afford to ignore the power of dividends. Read The Little Book of Big Dividends and gain a better perspective of how you can protect yourself for the future.

Tips for Successful Dividend Investing
Amazon-exclsuive content from author Charles B. Carlson

1. Dividends matter. Nearly half of the stock market’s long-term total return comes from dividends.

2. No free money. Stock prices adjust downward for dividend payments. Don’t let anyone tell you differently.

3. Bye-bye dividend. A company that isn’t making a profit is a company that isn’t going to be paying a dividend for long.

4. Buy before the ex. Want the dividend? Buy the stock before the ex-dividend date.

5. Too much of a “good” thing can kill you. If a stock yields more than 3 percentage points above its peers and more than five times the S&P 500 yield, just say no.

6. It pays to use this ratio. Payout ratio is the single more powerful tool for assessing the health of a company’s dividend. Ignore it at your own peril.

7. Don’t pick one without the other. Buy stocks that score well on dividend criteria and investment criteria. Remember: the best stocks to own are those with the best total-return potential.

8. All shapes and sizes welcome. When buying big, safe dividend stocks, make sure to include large, midsized, and small stocks. You’ll improve portfolio diversification.

9. No height requirement. Young investors can start building serious wealth via direct-purchase plans. All it takes is $50 to buy attractive dividend payers.

10. Hedge me if you can. Higher dividends are a great inflation hedge.

11. Stay in sync. Sync cash flows with bills by matching dividend-payment schedules with monthly expenses.

12. Have a good eye on the plate. Don’t be swinging at every stock with a super-high yield. Be selective, focusing on those with good BSD and Quadrix scores.

13. Discount shopping. Reinvesting dividends assures that you’ll buy stocks when they go on sale.

14. Age-old wisdom. Subtract your age from 110, and that is a benchmark for determining the appropriate percentage of stock in your portfolio.

Amazon Exclusive: Charles B. Carlson’s Recipe for Wealth

Now is a great time to be a dividend investor. Really. It’s an understatement to say that 2009 was a lousy year for dividends. In fact, according to Standard & Poor’s, it was the worst year ever. Dividend cuts resulted in lost shareholder income of more than $58 billion in 2009. More than 800 companies cut or omitted their dividend payments during the year, up from 606 in 2008 and more than seven times the number of dividend cuts and omissions in 2007. Coming on the heels of such dividend carnage, what I’m about to say may shock you, but I believe it to be true: Today may be the best time in nearly three decades to be a dividend investor.

Why do I think there are tremendous opportunities in dividend-paying stocks? Partly because of the massacre of the last few years. A stock’s yield is determined by two things—the dividend and the stock price. If a stock price declines, its yield increases (provided, of course, that the company continues to pay the dividend). When stocks were crushed in 2008 and early 2009, the huge price declines lifted dividend yields on quality stocks to levels that, in many cases, I have not seen since I started in this business in 1982. Because stocks fell so much in 2008 and early 2009, prices reached ridiculously low levels. Even with the market’s rally since March 2009, it is not uncommon to see stocks trading below prices they fetched a decade ago.

The bottom line is that dividend-paying stocks are as attractive today as they have been in nearly 30 years, especially when you compare dividend yields to the miniscule interest rates found on cash and other money-market instruments.

What is the best way for an investor to take advantage of these opportunities in dividend-paying stocks?

If you want the recipe for getting rich with dividend-paying stocks, here it is:

1) Find stocks with above-average appreciation potential and safe and growing dividends.
2) Buy them at attractive prices.
3) Reinvest the dividends.

It’s a recipe I’ve followed in my monthly newsletter on dividends and dividend reinvesting, DRIP Investor, which I’ve been writing for nearly two decades.

Partly because I believe the timing has never been better for dividend-paying stocks – and partly to dispel many of the myths about dividend investing I see espoused by so-called “experts” – I decided to write a book on dividend investing, The Little Book of Big Dividends.

My book is a blueprint for successful dividend investing. In the book, I walk you through the basics—what a dividend is (and isn’t); why, how, and when companies pay dividends; and why some companies pay big dividends while others pay no dividends at all. I also discuss the importance of size and safety of dividends when considering dividend-paying stocks, as well as the ability to buy attractive dividend-paying stocks directly via DRIPs and direct-purchase plans. I also provide you with a simple yet powerful formula for finding what I call “Big, Safe Dividends” (BSDs). My “BSD Formula” takes into account factors most critical to the safety and growth potential of a company’s dividend and can be used by any investor to find attractive dividend stocks.

Making market predictions is typically a fool’s errand. However, I’m pretty sure stocks won’t be as strong in 2010 as they were in 2009 nor as weak as they were in 2008. My guess is that you will see a more “grind-it-out” type market environment in 2010, one in which investors weigh risk as much as return and play more defense. In such an environment, dividend-paying stocks are especially attractive. However, you’ll need a guide to steer you to the best dividend investments and away from worst. Consider The Little Book of Big Dividends your personal financial “GPS,” pointing you to dividend riches in 2010 and beyond.

From the Inside Flap

Even with the recent stock market rebound, the massive stock declines over the past year have eroded savings. But this doesn’t mean you should stuff your money under a mattress. What you need to do is put your money to work and get the best returns possible. But how?

Smart investors will turn to high dividend-paying stocks to get a stable and growing stream of income. Dividend investing—which provides an income beyond any gain in the share price—may be your best weapon. Dividends are safe, largely reliable, and may be at their cheapest levels in many years. While the best paying dividend stocks of recent years, such as financials, took a huge beating in 2008, opportunities will abound in 2010 an beyond, if you know where to look.

In The Little Book of Big Dividends, dividend stock expert Chuck Carlson presents an action plan for dividend-hungry investors. You’ll learn how to avoid the pitfalls, find the opportunities, and construct a portfolio that generates big, safe dividends easily through the BSD (Big, Safe Dividends) formula. If you’re a bit adventurous, Carlson has you covered and will teach you how to find big, safe dividends in foreign stocks, preferred stocks, ETFs, real estate investment trusts, and more. Filled with in-depth insights and practical advice, this reliable resource:

• Contains the simple tools, strategies, and recommendations for finding big, safe dividends
• Helps you put a complete portfolio together that pays dividends every month
• Shows you the top dividend paying stocks with their dividend payment dates
• And much more

When it comes to investing, the approach outlined within these pages can’t be beat, and in these turbulent times, you can’t afford to ignore the power of dividends. Read The Little Book of Big Dividends and gain a better perspective of how you can protect yourself for the future and profit.

Edition details

• Publisher: Wiley
• Publication date: 2010
• ISBN 10: 0470567996
• ISBN 13: 9780470567999
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 208