- 1). DETERMINE WHAT PERCENTAGE OF YOUR PORTFOLIO SHOULD BE IN FIXED INCOME: Depending on your age and risk tolerance, you should determine what percentage of your portfolio you want to allocate to dividend investing. To avoid tax consequences, use this strategy in retirement accounts.
- 2). FIND DIVIDEND PAYING STOCKS: If you already use a broker, that person should have access to many lists containing dividend paying stocks. Otherwise there are web sites and blogs devoted to this topic including: www.dividend.com and www.dividendgrowthinvestor.com
- 3). RESEARCH DIVIDEND YIELDS FOR SAFETY: For safety, look for stocks that have a history of paying dividends over at least two decades. The key would be to choose companies that are increasing their yields. The highest yields are often unsustainable.
- 4). BUY BEFORE EX-DIVIDEND DATE: The most advantageous time to be a holder of record, or to purchase a dividend paying stock is before the ex-dividend date. That way you are entitled to the immediate benefits of a dividend.
SHARE
