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While the Market Runs Away, Dividends Will Stay

April 23, 2009

By Bryan Perry, Editor, Cash Machine

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Bryan Perry

Bryan Perry

Bryan Perry has more than two decades of experience inside Wall Street and is editor of Cash Machine, a newsletter advisory service focused on strategic high-income investing.

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It's every long-term investor's dream to put money to work in an investment and then sit back and just watch the money grow. No worries, no concerns — just easy compounding profits.

And in a time when so many people have lost their shirts as a result of the global financial crisis, I think almost all investors are sharing this dream.

But it's only a dream. Right?

Not exactly.

The combination of high profits and low risk doesn't have to be just something that investors wish for. By investing in stocks offering juicy dividends as large as 20%, investors can accumulate 15% per year wealth growth at one-tenth the risk of growth stock investing.

I know many investors are hesitating when they encounter a security that pays a double-digit dividend yield, especially considering that the global financial system is bursting at the seams. Any dividend above 5% is getting tossed aside by investors who are fearful that it's all too good to be true.

The Safest Place for Investors to Be In This Market

But based on my Cash Machine research, these investments paying nice dividends are the best place for investors to be for a reliable stream of income.

Why? Because even though market volatility will wreak havoc with day-to-day valuations, if the business and underlying assets that generate income are fundamentally sound, then you can have confidence that the cash flow from your dividend-paying stocks won't be radically interrupted during uncertain times.

You also need to consider that we're in a world where capital gains are hard to come by. There's no guarantee when we'll see a full recovery in the U.S. economy and stock markets.

And that's why it's important to have a high-yielding income strategy right now.

Why Steady Income-Generating Investments Are the Name of the Game