"The deepest sin against the human mind is to believe things
Why are high-yield portfolios dismissed as inferior to their
growth counterparts by so many investors?
The lure of high-returns seems to always trump the steady
growth of blue-chip
in the mainstream media.
Could it be that investors are taught that increasing dividend
yields mean lower portfolio returns? Or that dividend payments
mean that management believes the company is finished growing?
Both couldn't be further from the truth.
Look no further than the oft-mentioned "Dogs of the Dow" to
disprove the ill-informed opinion towards high-yield investing.
The Dogs of the Dow is a simple, yet highly effective investment
strategy that buys and holds equal dollar amounts of the 10
highest yielding dividend stocks in the
Dow Jones Industrial Average (
. Investors buy into the high-yielding dividend stocks at the
beginning of each year. They then adjust holdings annually to
include the 10 highest yielding stocks in the Dow.
Simple right? But more important than the strategy's
simplicity are the overall returns.
Over the last 25 years, the Dogs of the Dow have compounded at an
annual rate of 18.0%. And this outperforms the Dow and the
majority of money managers by a healthy margin.
So, what does 18% compounded annually mean to investors?
A $10,000 Dogs of the Dow portfolio would be increased to over
$625,000 over 25 years. Meanwhile the average index fund would
have grown to around $330,000 over the same time frame.
But if the Dogs of the Dow strategy wasn't enough to make you
believe in high-yield portfolios, just look towards famous
Wharton finance scholar Jeremy Siegel's study on the subject.
The noted finance professor found that over the past 45 years,
the highest yielding 20% of S&P 500 stocks
"produced an annualized return of over 14.3% versus an
annualized return of 11.2% for the S&P 500 index, which
resulted in three times the wealth accumulation of the
As you can from the evidence, investing in dividend stocks is
one of the top investment strategies over the long-term.
Don't let the misconceptions and market myths deter you from
getting into the action.
Dividend investing isn't a get-rich-quick strategy. It's a great
way to build wealth over the long term to secure a steady cash
flow for your retirement years.
How to Boost Returns Further Without Taking on Any
I have recently taken the Dogs of the Dow approach and
"super-sized" it using a safe and reliable income strategy known
as covered calls.
Back in late April I purchased one of the Dogs of the Dow
stalwarts - Intel (Nasdaq: INTC) - in the
High Yield Trader
portfolio. Four months later I have already surpassed the 4%
dividend by selling calls against the stock. And I fully expect
to triple the dividend over the next 8 months.
Just think what the returns on the Dogs of the Dow strategy
would be if you added another 8-12% annually and compounded that
return over the next 20 years.
These are the types of strategies income investors need to
use. Simple, reliable and more importantly, historically proven
to outperform the market over the long-term.
If you'd like to learn how to apply these strategies to your
portfolio and earn even more income, I invite you to join me and
Ian Wyatt for a live teleconference this Thursday, August 22
This live event is called,
"60-Second Dividends: Instant Income from Blue-Chip
And over the course of this investing seminar, we'll be taking
your questions and discussing how you can use this strategy right
away and earn 2x, 3x, and 4x the income on stocks you already
click here to reserve your seat for the