Dividend investing delivers safe stocks that spin off cash and have historically beat the market.
Bill Turnbull is the living definition of the phrase “long-term investor.” The 89-year-old former bank manager has been saving money for more than 40 years — starting in the late 1960s, when his kids were young and his mortgage was new. Turnbull's investment style has evolved over the years, but since the '90s he has focused almost exclusively on blue-chip stocks that pay juicy dividends. He particularly likes Canadian banks, but each of the 20 to 30 stocks in his portfolio has some sort of regular cash payout. So far, that strategy that has served him well.
When he started investing in stocks in the early '90s, his portfolio was worth $100,000 — today, despite the market crash in late 2008, it's worth more than $650,000.
If you're interested in building a retirement portfolio like that, you may want to try Turnbull's approach. Given the extreme volatility in the markets over the past few years, many like the idea of investing in solid, reputable companies that make enough cash every year to pay a good chunk of it out directly to shareholders. Even better, historical data show that over long periods of time, stocks that pay high dividends — especially those which regularly increase their dividends — soundly beat the market. If you invest in such stocks along with the right mix of bonds, you'll get what many investment advisers say is the perfect retirement portfolio. Not only is it easy to set up and maintain, it's crash resistant, dependable, and once you're retired, it will provide a steady stream of income for years. (more)
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