Tips and advice for personal finance from the Dolans. This video focus' on how to make bigger profits with your money with less risks.
Hi everybody. I’m glad you joined me. You say well, you look awfully in formal kind. Yes I have my goal for long, why, because I have a very informal discussion with you and a quick one. Because we’ve been getting—in a lot of the videos we do, in fact we cordially invite you to email us on the kinds of videos you want to see because this Dolans.com, this family, your joining our family is to help you make your life better, you and your family and your love ones, your life better. One thing we’ve getting a lot on radio and from our speeches across the country. People are saying, “Yeah I’m conservative you know but I don’t want to take under risk.” But I sure could do a little better in my portfolio and I’m going to say these are maybe older people but that’s okay. I want to talk to both older and younger investors. How can I increase the overall return in my portfolio, which is a combination of capital gains and income and let’s say dividends, combination of both?” You know, I can risk precious medal and I can do gold that I could do whatever securities or any kind of securitized investment and I’ve got the chance to make a lot of money—well yeah. And maybe for a very small part of my portfolio, maybe I’ll try that, maybe I’ll be much more speculative if I can afford to lose some of it, a small amount. But hey, give me, talk to me about something that really use the best of both world—dividend-paying stocks. Yeah, dividend-paying stocks—stocks in good companies that are appreciated and valuable for the longer term, number one. And they pay good dividends over the years, because dividend stocks tend to be less volatile when you say, why is that? Simply because dividends are generally—they pay in the form of a cash, but not always, investors are generally more willing to hang onto. I’m trying to get the best word, more willing to hang onto dividend-paying stocks of good companies now, during bear markets. And because people sort of hang on to them because they like the dividends and they like the capital gains, a possibility, they tend to go down less in a bear market unbalanced, now I’m talking historically. Now admittedly, they don’t get crazy in a bull market, almost of the market were coming back again. It doesn’t necessarily will go back as a high flying growth stock going back in a bull market. So generally less vulnerable but I like that. That we’re talking about another video about investing during a vulnerable market and I did that mentioned dividends. Number two, favorable tax treatment. In May of 2003, the taxable change were most dividend-payments are tax for the maximum 15% instead of ordinary income that could be a lot higher and that depending in the particular bracket so that’s kind of interesting. That means you get more current income depending on your tax bracket. You make get as much as current income from a dividend-paying stock as you may, may be from a CD. The CD rates have come over a little in the last few months. It’s also has a nice dividend-payments too, so, favorable tax treatment, another plus. You know what I was really like, I really like about dividends stocks, dividend-paying stocks again in good companies, is that if you take the dividends in stock, you know fractional shares is like dollar cost averaging without your like even if you don’t have to worry about it. In fact there are many companies—Carlson wrote a book, Charles Carlson wrote a book dividend reinvestment plans, whether dividend are reinvested in stock and shares of the stock. One excellent way to lower volatility with the good company paying a good dividend or a stock dividend is the your dollar cost the averaging. I like that, if I made the right decision in the stock in the first place. And last but not the least you say, “Well yeah, okay, I can get some additional income in my portfolio maybe a little capital gain and hold on.” Often that’s S&P data shows that nicely paying dividend stocks have average a little over a half of percent, about I think 6/10 of percent increase in stock price this particular year, in contrast to a loss of 5% on other companies who’s not paying dividends. So in many cases, that many cases high performing dividend, high paying dividend stocks are tied to high paying dividends of stocks that are solid are outperforming even some of the same stocks and same category that don’t pay as good as dividend. So they all perform a lot of stocks, let's volatile in a down market, not as great assumingly in a bull market, admittedly. Favorable tax treatment, dollar cost averaging when you invest in shares when you get shares of dividends or when you get a cash dividend invested in fractional shares. So there are three or four or five good reason why you should consider high dividend stocks even if you’re not a senior citizen, where income is important. So the bottom-line is this especially during a volatile market, take a look at good companies. They’re having a good track record of dividend paying and they’ll probably pay off in the long run, both in income along the way and in capital gain possibility is also. It’s kind of a best of both worlds if it’s a good company—high dividend paying solid stocks. Well worth considering being part of your portfolio. We’ll talk more again.