Dividend Compounding

Parent Strategy

One of the cornerstones of long-term investment strategies, Dividend Compound will add significant profits to your investment portfolio over time. As it focuses on businesses that compound wealth over time, dividend growth stocks have shareholder friendly managements. The investment classes of stocks, mutual funds and exchange-traded funds pay dividends. In addition, dividend growth investors look for above-average dividend yields. The higher the dividend yield, the better.

  • When investing in high dividend securities, take time to analyze and ensure that the dividend is consistent and likely to be paid going forward
  • Also look for companies that have consistently increased their dividend over time
  • Want Funds Available for Distribution (FAD) to be higher than the actual dividend
  • Securities that pay "too good to be true" dividends above market norms often soon reduce their dividends