Dividend investing does not take all the risk out of investing, but should the share price of a certain stock drop, the investor still has the dividend coming from the stock. To some traders dividend investing may appear to be a boring strategy, however for those who prefer to invest and not just trade, it is exciting to see the dividends add up in their account. Some dividend stocks may seem to move sideways, with very little price fluctuation, but with every dividend payment, an investor’s cost basis for the security goes down by the amount of the dividend. Over time, a stable performing dividend stock could pay for itself through the dividend revenue produced.
Dividend investing is not a get rich plan, nor is it entirely failsafe, but it is a strategy that when implemented properly can help an investor increase his bottom line over the long term.
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